Gun related issues aside this week has been largely about learning a new term, at least for non-wonks. President Obama is taking a lot of heat for, in the words of some Democratic analysts, willingness to cut Social Security benefits. there is some honest disagreement on whether or not that is truly the case. What he has offered to do is connect future increases in Social Security benefits to ‘chained CPI‘.
Making such a change also means paying out less in Social Security benefits over time — something liberal Democrats can’t stomach. Imagine, for example, a person born in 1935 who retired to full benefits at age 65 in 2000. People in that position had an average initial monthly benefit of $1,435, or $17,220 a year, according to the Social Security Administration. Under the cost-of-living-adjustment formula and 2012 inflation, that benefit would be up to $1,986 a month in 2013, or $23,832 a year. But if payouts were adjusted using chained CPI, the sum would be around $1,880 a month, or $22,560 a year — a cut of more than 5 percent and more as the years go by.
As for taxes, the nonpartisan Tax Policy Center has calculated that most Americans would pay a little more than $100 more per year. Families making between $30,000 and $40,000 a year would see the biggest increases — almost six times that faced by millionaires — but that’s because upper-income Americans are already in the top bracket and not being pushed into higher marginal rates because of changing bracket thresholds.
All told, chained CPI would lead to a larger across-the-board cut in Social Security benefits and a 0.19 percent income surtax, according to experts.
This makes for an odd situation since some of the more respected Democratic leaning wonks like the economists at American Progress and at the CBPP do not think chained CPI is bad if implemented correctly. That said Robert Kuttner, a very good economics analysts thinks chained CPI is a bad deal and does not hold back, Social Security and the Obama Cave-In. CBPP might be correct and then only if Congress incorporates this very precise language – a good piece here on all the tiny pieces that would have to work together to make a deal invlving the CPI to be less painful to those who can least afford it – The progressive case for the chained CPI . Knowing Republicans they are not likely to agree to anything that will benefit low to average income seniors, you know, because they have no “skin” in the game. So that makes two hurdles. The most important aspect of it is that a deal that includes chained CPi just isn’t necessary. I suspect, given Obama’s history of having a deep affinity for reaching out, that he has offered this part of the deal so that Republicans can save face. Boehner is particular can say see, we got some cuts in those gov’mint hand-outs to all those lazy leeching seniors. 8 Deficit Reducers That Are More Ethical—And More Effective—Than the ‘Chained CPI’
Independent estimates say that the “chained CPI” will slash Social Security benefits by $122 billion over the next ten years. Here are eight solutions that will save more money—and really will reduce the deficit—without compromising either our ethics or our sense of fairness:
1. Close multiple loopholes in the capital gains law: $174.2 billion. (1.42x)
Lawmakers could save nearly one and a half times as much money as they’ll get from stripping seniors, the disabled, veterans, and children of their benefits—1.42 times as much, to be precise—by closing capital gains loopholes.
They include the “carried interest” loophole, which taxes hedge fund managers’ service fees at the low “investors’” rate; the ‘blended rate,’ which taxes some quick derivatives trades as if they were long-term investments; the ability to ‘gift’ capital gains to avoid taxation; a dodge for bartering capital gains; and the ability to ‘defer’ gains to future years.
Conservatives, including Mitt Romney during his campaign, claimed they would raise revenues by closing loopholes in the tax code. here is another chance to embarrass them. They will not agree to cuts to the capital gains nanny state. These are people who make money off the work of others. If they were all kidnapped by Martians tomorrow we’d all be better off.
2. Refuse to compromise on the President’s $250,000 figure for increased taxation: $183 billion ( these figures are new revenue) (1.5x)
[ ]…3. Reduce the budget for US overseas military bases by 20 percent: $200 billion. (1.6x)
The United States maintains 702 military ‘installations’ in 63 foreign countries (it has 4,471 bases altogether), according to the Defense Department’s annual budget statement.
4. Allow the government to negotiate with drug companies: $220 billion. (1.8x)
Current law specifically forbids the government from using its negotiating power to obtain lower rates for Medicare prescriptions—even though much of the research behind the drugs involved was performed at government expense.
6. Enact Rep. Jan Schakowsky’s ‘Fairness in Taxation Act’ for very high earners: $872.5 billion. (7.15x)
7. Eliminate corporate tax loopholes: $1.24 trillion (10x)
8. Create a financial transactions tax for high-volume Wall Street trading: $1.8 trillion (14.75x)
And here’s our grand prize winner: A financial transaction tax like the one they’ve imposed in the United Kingdom. The UK tax rate is tiny—0.25 percent of each transaction, levied on both parties—but the overall impact is substantial.
Not only would this tax bring in substantial revenue, it would also discourage the massive volume of ultra-high-speed computer-driven transactions that have turned the stock market into both an imperceptible ‘black box’ and a real-time mega-casino operating in nanoseconds.
This new sources of revenue would be painless. Billionaires will not stop investing. No millionaires will be suddenly forced to go dumpster diving. America will not rot in the bowels of Marxist hell. But millions of Americans who have worked hard all their lives and deserve a decent standard of living will not have to sacrifice anymore than they do already. Democrats should fight for the above and wait until January, House Republicans Again Show Why We Need to Wait Until January for a Deal. As usual the very serious people are acting like mindless zombie clowns.
When it comes to economic issues conservatives call upon some clown like Arthur Laffer. When the focus is on issues related to gun violence they turn to a clown named John Lott. Why is the discredited John Lott used as an authoritative source on gun violence?
After Mass Shooting In Aurora, Lott Denied The Fact That America Has The Highest Rate Of Gun Deaths In The Civilized World. Appearing on CNN in the wake of the mass shooting at a movie theater in Aurora, CO, Lott rejected host Piers Morgan’s assertion that “America has the worst incidents of gun murders of any of what they call the civilized world.” Lott told Morgan that “factually, it’s not true.” In reality, a 2003 Harvard School of Public Health study revealed that the firearm homicide rate in the United States is 19.5 times higher than the average rate found in other high-income nations. [CNN, Piers Morgan Tonight, 7/24/12, via Media Matters]
If he cannot, or more likely, will not, get such a basic fact correct, that says a lot about the rest of his “research”. And remember conservatives are not freaking out over some proposal to ban guns – though that myth has been on conservative web sites for years. Most of the proposals are about sensible restrictions on certain types of guns and the size of ammo magazines.
A conservative web site called P.J. Tatler is outraged, Disgraceful: Obama Invokes Newtown Massacre to Pressure Republicans to Go Along with His Tax Hikes
During his press conference today, called to announce his new gun control task force, President Obama invoked the Newtown massacre to apply pressure on congressional Republicans in the fiscal cliff standoff.
OBAMA: If this past week has done anything it should give us some perspective. I-I-I-If there’s one thing we should have, after this week, it should be a sense of perspective about what’s important. And I would like to think that members of that caucus would say to themselves “You know what, I disagree with the president on some things. We wish the other guy had won. We’re gonna fight him on a whole range of issues over the next four years. We think his philosophy is all screwed up. But right now, what the country needs is for us to compromise, get a deficit reduction deal in place, make sure middle class taxes don’t go up, make sure that we’re laying the foundations for growth, give certainty to businesses large and small, not put ourselves through some sort of self-inflicted crisis every six months, allow ourselves time to focus on things like preventing the tragedy in Newtown from happening again, focus on issues like energy and immigration reform, all the things that will make a determination as to whether our country grows over the next four years, ten years, 20 years, and if we could just pull back from the immediate political battles, if ya peel off the partisan war paint, then we should be able to get something done.”
I think, I think the Speaker would like to get that done. But an environment needs to be created not just among House Republicans but among Senate Republicans that says the campaign is over and let’s see if we can do what’s right for the country, at least for the next month! And then, we can re-engage in all the other battles that they’ll wanna fight.
This has to be one of the lowest moments of a very low presidency
Republicans really seem to think a 3% tax tax increase on the wealthiest people in the U.S. is the end of the world. Now they are outraged that the president should use a genuine tragedy to draw parallels about what should invoke outrage. Oh yea, this is truly a low point said the wackos who lied and over four thousand Americans died. Too bad we can’t tax false outrage, Republican bombast alone could balance the budget in months.