The following is an analysis of the Deficit Commission's Report Draft with commentary. In advance, I must tell you that it is a bit lengthy, but I do hope it is nevertheless worthy of your perusal, folks.
Basically, here is the Deficit Commission’s Preamble:
Throughout our history, Americans have always been willing to sacrifice to make our nation stronger over the long haul. That’s the promise of America: to give our children and grandchildren a better life.
American families have spent the past 2 years making tough choices in their own lives. They expect us to do the same. The American people are counting on us to put politics aside, pull together not pull apart, and agree on a plan to live within our means and make America strong for the long haul. A sensible, real plan requires shared sacrifice –and Washington should lead the way and tighten its belt.
The Commission also does not want to "Disrupt a Fragile Economic Recovery, so they advice the following:
Start gradually; begin cuts in FY 2012.
Protect the truly disadvantaged
Focus benefits on those who need them.
Ensure an affordable and sustainable safety net.
My Comments: If they really want to "focus benefits on those who need them," then the Commission should have proposed some type of "means testing" formula. Just doing that would make Social Security solvent forever, and perhaps benefits could actually be increased if means testing were adopted. Also, who determines exactly what "an affordable and sustainable safety net" is. Furthermore, who exactly are the "truly disadvantaged?" Additionally, none of this so-called deficit reduction stuff starts until FY 2012, except Tort Reform which starts in 2011? Just how convenient and how popular will that be to the Republicans who have been clamoring for Tort Reform since the late 1800's?
The Commission wants us to "Cut Spending We Simply Can’t Afford, Wherever We Find It," by:
Ending redundant, antiquated, ineffective spending.
Cutting ALL excess spending – defense spending, domestic discretionary spending, entitlement spending, & spending in the tax code.
Keeping America safe, while rethinking our 21st century global role.
Bringing spending down to 22% and eventually 21% of GDP.
My Comments: There is nothing wrong with rethinking our 21st century global role and cutting the over-bloated Defense Budget. We now spend on defense more than the amount of all the richest 12 nations in the world put together. Also, ending redundant, antiquated, ineffective spending is always a worthy goal; however, where are the specifics?
The Commission also wants us to "Demand Productivity and Effectiveness" by:
Using fiscal restraint to promote savings through reforms and efficiencies that force government to produce better results.
Setting a goal of 3% annual productivity growth in public sector.
My Comments: I’m sure everybody is for those two worthy goals. I sure am.
IMPORTANTLY, it wants us to "Reform and Simplify the Tax Code" by:
Broadening base, lowering rates, and bringing down the deficit.
Making America the best place to start and run a business and create jobs.
Capping revenue at or below 21% of GDP.
My Comments: Friends, whenever you hear a politician talk about broadening the tax base, that ultimately means that the middle class is going to pay more while the wealthy will pay less. Indeed, that’s the definition of a "Regressive Tax System." In actuality, the Deficit Commission's recommendations have little to do about decreasing the deficit. Rather, it’s about giving the wealthy in America more tax breaks for decades to come.
Of course, the Commission also wants us to "Keep America Sound Over the Long Run" by:
Ensuring Social Security’s soundness and solvency.
Reducing the long-term growth of health care costs.
Reducing the debt burden as a share of GDP.
My Comments: Folks, Social Security could also be fixed by simply raising the maximum income levels which would be subject to the Social Security tax - and not by a huge amount. Very importantly, please remember that Social Security is fully solvent until 2037 and is 78% solvent thereafter forever. Indeed, this is just another Republican scare tactic in the likes of TARP.
The Commission "plan makes five basic recommendations:"
- Enacting tough discretionary spending caps and providing $200 billion in illustrative domestic and defense savings in 2015.
- Passing tax reform that dramatically reduces rates, simplifies the code, broadens the base, and reduces the deficit.
- Addressing the "Doc Fix" not through deficit spending but through savings from payment reforms, cost-sharing, and malpractice reform, and long-term measures to control health care cost growth.
- Achieving mandatory savings from farm subsidies, military and civil service retirement.
- Ensuring Social Security solvency for the next 75 years while reducing poverty among seniors.
My Comments: This plan does not start until 2015. So where is the emergency they keep telling us about? Note also they use the words, "broadens the base." Again, the tax base is the middle class. However, they do tell us that their brand of tax reform will "dramatically reduce rates." For sure, there is some measure of honesty in that. However, what they do not tell us is that the real big winners of their tax reform plan (heist) are the wealthiest Americans.
Their plan is to "achieve nearly $4 trillion in deficit reduction through 2020: with 50+ specific ways to cut outdated programs and strengthen competitiveness by making Washington cut and invest, not borrow and spend," by:
Reducing the deficit to 2.2% of GDP by 2015, exceeding President’s goal of primary balance (about 3% of GDP).
Reducing tax rates, abolishing the AMT, and cutting backdoor spending in the tax code.
Capping revenue at or below 21% of GDP and getting spending down to 22% and eventually to 21%.
Stabilizing debt by 2014 and reducing debt to 60% of GDP by 2024 and 40% by 2037.
Ensuring lasting Social Security solvency, preventing projected 22% cuts in 2037, reducing elderly poverty, and distributing the burden fairly.
Its GOAL is: "Nearly $4 Trillion in Deficit Reduction (in billions of dollars)." Supposedly it "Reduces Deficit to Sustainable Levels by 2015," and "Balances the Budget by 2037."
My Comments: This plan of the Commission is incredibly weak in terms of actually reducing the debt. Just think about this: they want to achieve $4 trillion in deficit reduction over 10 years; that’s just 400 billion a year, and most of the savings are in the out years. Its plan is also to reach a balanced budget by 2037. Folks, 2037 is 27 years down the road; so why is it taking so long to reach a balanced budget. Remember, they’re not talking about paying down the Public Debt at all. The answer is that this Deficit Plan is really a disguised Tax Cut Plan tailor-made for the uber-rich. You know, in less than eight years Bill Clinton not only balanced the budget, but he also began to markedly pay down the Public Debt.
Here is the Commission's How To: Roll "discretionary spending back to FY2010 levels for FY2012," and require "1% cut in discretionary budget authority every year from FY2013 though 2015" by:
Discretionary Budget Authority (BA) indexed to inflation from FY 2015 through FY2020
Discretionary spending would be $204 billion (16%) below the President’s budget and $127 billion (10%) below the CBO baseline in 2015
My Comments: Saving $205 billion in 5 years; well, that’s just a little over 40 billion a year. Heck, if we just do not extend the tax cuts for the super rich, we’d save $70 billion a year, almost twice as much as that which the Deficit Commission calls for under its alleged austerity program.
Here are the Commission recommendations on how to apply the Spending Caps:
Cap applied equally with firewall separating defense and non-defense (or security and non-security), and no borrowing across categories through 2015. New Congress will renegotiate firewalls beyond 2015.
60-vote point of order to enforce caps in Senate; separate non-amendable vote on point of order to enforce cap in House; sequester applied if caps are exceeded.
Budget for disaster funds; tougher limits, transparency for emergencies.
Tighter definition and rules for Overseas Contingency Operations funding (outside cap) (Under GW Bush, this is where the Iraqi and Afghanistan Wars were funded, entirely OFF BUDGET.)
Move Transportation Trust Fund spending to mandatory, limit transportation spending to existing revenue collections and prohibit general fund bailouts of transportation trust funds. (The Lock Box Solution)
Establish bipartisan Cut-and-Invest Committee to de-authorize outdated, low-priority and inefficient programs and recommend high priority long-term investments.
Change to biennial budgeting.
My Commentary: By far, this is the most DANGEROUS proposal made by the Commission. Incredibly, they want is to establish in stone a requirement that any future changes to their approved plan would need 60 votes in the Senate in order to do so (likewise, in the House of Representatives as well). Folks, this is the same number of votes now required by the Cloture Rule in the Senate in order to shut down the threat of a filibuster. Right now, only a majority vote by the Senate is needed to make budget changes. Gosh, when do you think true Democrats will have 60 Senate votes for anything ever again? Therefore, once they sucker America into accepting their sleight of hand plan, we’ll probably be locked into it forever and a day. Note also that they are suggesting a lock box for the Transportation Trust Fund (which is the only infrastructure program called for under its plan). However, they simply do not propose one (a lock box) for the Social Security Trust Fund. How conveniently selective they are; since they know they’ll need "a fat cash fund" available in the future for the very rich fat cats to pilfer, and the Social Security Trust Fund fits that scenario perfectly, just like it has for generations now. Remember, right now, the Social Security Trust Fund is entirely cashless; only Treasury Department paper promises now sit inside the Social Security Trust Fund.
The Commission wants "$100+ billion in potential Defense savings" via:
$100+ billion in potential Domestic savings
Cuts in spending $200 billion below the 2015 levels in the President’s Budget
My Comments: Wow, a whole $200 billion in five years; that works out to $40 billion a year. In comparison, please note also how much they want to save from the Defense Budget over the same period of time.
It also calls for "$100B in Illustrative Defense Cuts" by the following methods:
DEFENSE DISCRETIONARY BUDGET 2015(Savings are in billion $ amounts)
Applying the overhead savings Secretary Gates has promised to deficit
reductions
28
Freezing federal salaries, bonuses, and other compensation at the Department Defense for three years
5.3
Freezing noncombat military pay at 2011 levels for 3 years
9.2
Double Secretary Gates’ cuts to defense contracting
5.4
Reducing procurement by 15 percent
20
Reduce overseas bases by one-third
8.5
Modernizing Tricare, Defense health
6
Replacing military personnel performing commercial activities with civilians
5.4
Reducing spending on Research, Development, Test & Evaluation by 10 percent
7
Reducing spending on base support
2
Reducing spending on facilities maintenance
1.4
Consolidating the Department of Defense’s retail activities
0.8
Integrating children of military personnel into local schools in the United States
1.1
My Comments: Note the 3 year pay freeze. The soldiers are really going to love that one. However, it does call for reducing overseas bases by a third. I say that eliminating only a third of the overseas bases is simply not enough. When they talk about modernizing Tricare, they’re talking about cutting medical benefits for soldiers and veterans. Gosh, the Republicans love to send our soldiers off to war; however, they hate like hell to support them as war veterans. Finally, cutting just $100 billion a year from the over-bloated Defense Budget is just not enough. Additionally, the 3 year year pay freeze also apllies to federal workers. I guess that's one way to chop down the federal work force more than a bit.
It also calls for "$100B in Illustrative Domestic Cuts" by the following methods:
DISCRETIONARY BUDGET (Savings are in billion $ amounts)
2015 _________
Reduce Congressional & White House budgets by 15%
0.8
Freeze federal salaries, bonuses, and other compensation at non-Defense agencies for three years
15.1
Cut the federal workforce by 10% (2-for-3 replacement rate)
13.2
Eliminate 250,000 non-defense service and staff augmentee contractors
18.4
Reduce unnecessary printing costs
0.4
Create a Cut-and-Invest Committee charged with trimming waste and targeting investment
11
Terminate low-priority Corps construction projects
1
Slow the growth of foreign aid
4.6
Eliminate a number of programs administered by the Rural Utility Service formerly REA)
0.5
Eliminate all earmarks
16
Eliminate funding for commercial spaceflight
1.2
Sell excess federal property
1
26 other options of $2 billion or less
17
(Numbers are FC staff estimates, based on CBO and other available estimates DISCRETIONARY BUDGET 2015)
My Comments: Note the Federal Hiring Moratorium: for every three workers who leave federal employment, only two are replaced. Also, just eliminating 250,000 non-defense service contractors is just not enough. Remember, right now we are paying 800,000 service contractors just as anti-terrorist experts.
Here are the Commissions Goals and Methods of Tax Cutting:
Lowering Rates
Simplifying the Code
Broadening the Base
Cutting Spending in the Tax Code (Tax Expenditures)
Improving Compliance (Tax Gap) (My Comment: Catching the tax cheats)
Making America the Best Place in the World to Start and Grow a Business
Reducing the deficit (My Comment: Last and Leastmost)
My Comment: Of course, since the Deficit Commission is really the Tax Cutting Commission for the very wealthy, it mentions reducing the deficit last.(Didn't Krugman have something to say about that?)
Indeed, the Commission does set forth a few Tax Cutting Options:
Option 1: The Zero Plan which would:
Consolidate the tax code into three individual rates and one corporate rate
Eliminate the AMT, Pease, and PEP
Eliminate all $1.1 trillion of tax expenditures
Dedicate a portion of savings to deficit reduction and apply the rest to reduce all marginal tax rates
Add back in any desired tax expenditures, and pay for them by increasing one or all of the rates from their zero-expenditure low
My Comments: Note that only a "portion of the savings" is used for actual deficit reduction. The rest is used to lower taxes more - and per capita mainly for the rich. Of course, that’s no surprise.
Here is its "COMPREHENSIVE TAX REFORM" Chart of: Option 1: The Zero Plan
They include Bottom Rate, Middle Rate, Top Rate, Corp. Rate in that order.
Current Rates for 2010-------------------------10% 15% 25% 28% 33% 35% 35%
Scheduled Rates for 2011----------------------15% 28% 31% 36% 39.6% 35%
Eliminate all Tax Expenditures* ---------------8% 14% 23% 26%
Keep Child Tax Credit + EITC* ----------------9% 15% 24% 26%
Keep Child Tax Credit + EITC; Reform Mortgage, Health, and
Retirement Benefits at 80% of Current Level and Switch to
Territorial System*-------------------------------12% 20% 27% 27%
Keep Child Tax Credit, EITC, and Current Mortgage, Health & Retirement Benefits & Switch to Territorial System*--------------------------------------------13% 21% 28% 28%
*Note: All options set aside $80 billion for deficit reduction and treat capital gains and dividends as ordinary income. Rate are based on very rough static estimates. No behavioral effects are assumed. Magnitude of tax expenditures estimated broadly. (The bolding here is my emphasis, as it is elsewhere.)
My Comments: At least capital gains and interest will be treated as ordinary income. That certainly is a big plus. However, note also that the huge reductions in that tax rates for the upper class and for corporations proposed by the Deficit Commission (which somehow morphed itself into the Tax Cut For the Very Wealthy Commission).
Here is Option 2: the Wyden-Gregg Style Reform. It calls for the following:
Individual Tax Reform
Repealing AMT, PEP, and Pease
Establishing 3 rates –15%, 25% and 35%
Tripling the standard deduction to $30,000 ($15,000 for individuals)
Repealing state & local tax deduction, cafeteria plans, and miscellaneous itemized deductions
Limiting mortgage deduction to exclude 2nd residences, home equity loans, and mortgages over $500,000
Limiting charitable deduction with floor at 2% of AGI
Capping income tax exclusion for employer-provided healthcare at the amount of the actuarial value of FEHBP standard option
Modifying and repealing several other tax expenditures
Dedicating a portion of savings to deficit reduction
Option 2: Wyden-Gregg Style Reform also calls for the following:
Corporate tax reform
Reducing corporate tax rate to 26%
Permanently extending the research credit
Eliminating and modifying several business tax expenditures, including:
Domestic production deduction
Adopting LIFO method of accounting
Energy tax preferences for the oil and gas industry
Changing Depreciation rules
Adopting International tax reform including a territorial system
My Comments: If we are going to have to eat this dung no matter what, this would surely be the preferred plan. However, note the corporate tax is also reduced to 26% here as well. However, the tax rate for millionaires and billionaires would be capped at a maximum of 35%. The plan also calls for the elimination, repealing or modifying of certain taxes. My question is what ones will be eliminated, repealed, or modified and by how much, and is that to be decided after we get roped in?
Option 3: The Tax Reform Trigger Plan (the Haircut Option) which calls for the following:
Calling on Finance and Ways & Means Committees and Treasury to develop and enact comprehensive tax reform by end of 2012
Putting in place across-the-board "haircut" for itemized deductions, employer health exclusion, and general business credits that would take effect in 2013 if reform is not yet enacted
The Haircut would limit proportion of deductions and exclusions individuals could take to around 85%* in 2015. Similarly, corporations would only take some proportion of their general business credits
Requiring the haircut to increase over time until tax reform is enacted
(*This is a very rough estimate of the haircut necessary to reduce the deficit by $80 billion in Other Revenues)
Gradually increasing the gas tax to fund transportation spending
Raising gas tax gradually by 15¢ beginning in 2013
Dedicating funds toward fully funding the transportation trust funds and therefore eliminating the need for further general fund bailouts
Chaining CPI: Because the current index overstates inflation, making technical correction to adopt chained CPI government-wide, including the tax code
My Comments: This is the Do Nothing Contingency Option, aka the Haircut Mandate, and it is self-explanatory. However, please note the 15 cent gas tax that begins in 2013. My question is: who do you think shoulders the huge burden of this gas tax, the middle class or the well-do-do?
Here is the Commission’s Plan for Reducing Health Care Costs:
For the Medium Term: Fully offset the cost of the "Doc Fix" by asking doctors and other health providers, lawyers, and individuals to take responsibility for slowing health care cost growth. Offsets include:
Pay doctors and other providers less, improve efficiency, and reward quality by speeding up payment reforms and increasing drug rebates
Pay lawyers less and reduce the increasing cost of defensive medicine by adopting comprehensive tort reform
Expand cost-sharing in Medicare to promote informed consumer health choices and spending
Expand successful cost containment demonstrations
Strengthen IPAB
Recommend additional health savings (illustrative examples to follow)
Long Term: Contain growth in total federal health spending to GDP+1% after 2020 by establishing a process to regularly evaluate cost growth, and take additional steps as needed if projected savings do not materialize
My Comments: Note how medical malpractice reform has been expanded to "comprehensive tort reform." Did they think no one would notice this particular bait and switch? They mention cost-sharing, so get ready for some big deductibles, folks.
Here is its Additional plan "For Reducing Health Care Costs":
Set global target for total federal health expenditures after 2020 (Medicare, Medicaid, CHIP, exchange subsidies, employer health exclusion), and review costs every 2 years. Keep growth to GDP+1%.
If costs have grown faster than targets (on average of previous 5 years), require the President to submit and Congress to consider reforms to lower spending, such as:
Increase premiums (or further increase cost-sharing)
Overhaul the fee-for-service system
Develop a premium support system for Medicare
Add a robust public option and/or all-payer system in the exchange
Further expand authority of IPAB
My Comments: I really love this one. They mention adding a robust public option and/or all-payer system in the exchange; however, that does not occur until 2020, ten years from now. Give me a break! Do you think that will ever happen? You know, if there were offering that right now, it might be something else, my friends. Other than that, raising premiums or requiring more cost sharing is their only recommendation.
Here are the MANDATORY BUDGET DRAFT PROPOSALS:
A. Mandatory Savings via Chained CPI
Shift to chained CPI for all indexed programs
Current measures of inflation overestimate increases in cost of living by failing to account for "substitution bias"
Adopting a more accurate measure of inflation would achieve savings government-wide
My Comments: Note how they want to tie everything to the CPI (the Consumer Price Index) and not inflation; but only for expenditures and not government receipts. How predictable they are. This effectively means that Social Security Cola’s will go down in the future, pushing many Social Security recipients below the poverty line.
B. Agriculture
Reduce farm subsidies by $3 billion per year by reducing direct payments and other subsidies, Conservation Security Program funding, and funding for the Market Access Program
My Comments: There goes conservation, folks. Also, why is there so little in reductions of farm subsidies here?
C. Military and Civil Service Retirement
Use highest 5 years to calculate civil service pensions
Ask federal workers to contribute ½ the cost (not 1/14th)
Reform COLA payments for civilian & military early retirees
Reform military retirement system to vest after 10 years (not 20); defer collection until age 60
My Comments: This is major, because many military retirees are in their early forties when they retire, not at age 60 as this change proposes. Also, under this plan, Federal workers are going to have their retirement deductions increased 7 fold. Good luck with all of that, Commissioners.
D. Universal Services Fund
Reduce spending from Universal Services Fund
E. Student Loans
Eliminate in-school interest subsidies for student loans
My Comments: This is also major. It proposes that while students are in school they will be required to pay interest on all student loans. That's right, while they attend classes. You know, the goal of Republicans has always been to make education difficult for masses, in the hope that they will remain stupid and vote likewise. For sure, this will certainly help them to fulfill that particular goal.
F. Other Mandatory Savings Options
End payments to states and tribes for abandoned mines.
Extend FCC’s authority to auction radio spectrum licenses.
Restructure Power Marketing Administration to charge market-based rates.
Require Tennessee Valley Authority to impose transmission surcharge on electricity sales.
Require IRS to deposit fees for its services in Treasury as miscellaneous receipts.
Index all fixed-dollar user fees to inflation.
Fund program integrity efforts for Medicare, Medicaid, the IRS, and other programs with significant improper payments.
My Comments: Get ready folks, the cost of electricity is going way up in many parts of America. Note also that fee increases are not indexed to the CPI; but rather to INFLATION - again, how convenient.
Here is the OUT-CLAUSE: Allow Congress and the President to waive the requirements during years with low economic growth, unanticipated military conflict, or major disaster.
Here is how the Commission wants to Strengthen Social Security
A. Goals:
Strengthen Social Security for the long haul by returning the system to sustainable solvency.
Prevent the 22% across the board benefit cut projected to occur in 2037.
Reduce elderly poverty by putting into place a new, effective special minimum benefit.
Enable system to continue to provide for a secure retirement as the population grows older and Americans live longer.
Reform Social Security for its own sake, not for deficit reduction.
My Comments: Okay, let’s reduce elderly poverty by instituting a special minimum benefit. I’m sure we’re all for that. But pray tell us: just how much is that minimum benefit going to be, and will it be 2050 before the elderly poor see it?
B. Reduce Elderly PovertyAdd new protections for the most vulnerable:
Add a new special minimum benefit to keep full-career minimum wage workers above the poverty threshold.
Wage-index the minimum benefit to make sure it is effective both now and in the future.
Provide a benefit boost to older retirees most at risk of outliving other retirement resources.
C. Ensure Long-Term Social Security Solvency by increasing progressivity of benefit formula
Gradually move to a more progressive benefit formula by creating a new bend point at the 50th percentile and reducing upper replacement factors slowly over time, phased in by 2050
My Comments: All this is to be phased in by the year 2050. Isn’t that a bit too far down the road, folks?
D. Index retirement age to increases in longevity
This option is projected to increase the age by one month every two years after it reaches 67 under current law, meaning the normal retirement age would reach 68 in about 2050 and 69 in about 2075
Hardship exemption for those unable to work beyond 62
Switch to a more accurate measure of inflation (chained CPI) for calculating COLAs
Include newly hired state and local workers in Social Security after 2020
My Comments: These provisions are not bad at all. They do provide for a hardship exemption concerning age retirement for those unable to work beyond 62. Furthermore, it is not until the year 2075 that the Social Security retirement age becomes 68. Friends, how can anyone say what is fair 65 years from now? Indeed, they could have made the retirement age 100 in the year 2075, since the proposal is so illusory.
E. Broaden the Payroll Tax Base
Gradually increase the taxable maximum to capture 90 percent of wages by 2050
Under current law, the taxable maximum is pegged to growth in average wages. In 2009, the taxable maximum captured almost 86 percent of earnings, but it will fall to 82.5 percent by the end of the decade.
Phasing into a higher taxable maximum slowly will prevent large marginal changes and will prevent rapid buildup of the trust fund.
My Comments: Yeah, they want to increase the maximum income amount from which the Social Security Tax would apply – but not right away – and their goal of 90% is set for a long time down the road, by the year 2050. Folks, they could do this right now and save Social Security forever, and the increase would not be substantial at all. Once again, they are protecting the more well-to-do amongst us. For sure, a much fairer way would be to Means Test Social Security benefits as well as Medicare benefits. Did you know that the biggest tax for the middle class is not the Income Tax. Unquestionably, it is the Social Security tax.
F. Promote Smart Retirement Decisions to Allow greater flexibility in how benefits are claimed
Give retirees the choice of collecting half their benefits early and the other half at a later age to minimize impact of actuarial reduction and support phased retirement options.
My Comments: That’s right, get everyone to retire early for a piddling pension.
G. Direct SSA to design a way to provide for the early retirement needs of workers in physical labor jobs
Require SSA to have accommodation in place before longevity indexation begins and set aside funds to pay for new policy.
H. Improve information on retirement choices
Develop an education campaign to encourage greater personal savings, delayed retirement, and phased retirement.
Better inform beneficiaries of the costs and benefits of collecting benefits early.
My Comments: Information is power, so I can’t fault this proposal so long as the information is both truthful and understood by all.
I. Alternative Social Security Options
Increase benefits for low-income widows
J. Reduce the balance by 0.06% of payroll
Cap spousal benefit at one-half of average worker’s benefit
K. Improves solvency by 0.08% of payroll
Reinstate college benefits for child survivors
L. Reduce balance by 0.07% of payroll
Tax cafeteria plans in same manner as 401(k) plans
M. Improve solvency by 0.22% of payroll
Uncap the Disability Insurance (DI) portion of FICA taxes (1.8%)
N. Improve solvency by 0.34% of payroll
Fully or partially tax employer-sponsored health insurance
My Comments: You know, if we tax employer-sponsored health insurance too much, many in the middle class simply won’t have the money to keep their insurance, or their employers will no longer offer it to them. You know, it’s always been a Republican goal to create a system where employers no longer pay, or help to pay, for their employee’s health insurance. Perhaps they will accomplish their goal now?
O. Solvency impact dependent on design
Convert delayed retirement credit into one-time bonus
My Comments: The "take the cash now option" is just crazy. I fear many uneducated poor people will take the one-time bonus, spend it fast, and then have nothing left to support them for the rest of their lives. Do you remember a commercial that includes this Pied Piper rhetoric?: "It’s my money!! And I want it now!!!"
P. No solvency impact
Include automatic stabilizer with future benefit and/or revenue changes
My Concluding Comments: It is immensely difficult to compare tax rates without hard CBO numbers concerning projected tax revenues under each plan in relation to the tax revenue numbers generated under our current tax code. Perhaps they will be given to us soon.
However, let me say this: It is stated within the Cat Food Commission's Preamble that American families have spent the past 2 years making tough choices in their own lives. What do they mean: "the past two years." The middle class in America has steadily lost purchasing power since that cold January day more than thirty years ago when Ronald Reagan was sworn into office. Also, give me a break with that "shared sacrifice" stuff. Under this plan, the wealthy – as usual – will benefit hugely by the hard monetary sacrifices of the middle class; and it is certainly not the other way around. Indeed, "the more things change, the more they remain the same."
Folks, the proposals above do set forth some deficit reducing measures; however, they are both small and incidental. Indeed, the Deficit Commission's Draft proposals (our TARP II now) are in fact poorly disguised TAX REDUCTION PROPOSALS in the main, which primarily benefit corporations and the super rich, and which will surely choke off the life breath of the middle class for generations to come. Make no mistake about that. Furthermore, once we are roped in, it will take Super-majorities in Congress to change these lethal tax reduction consequences.
Finally, let me say that the "red herring" underlying all of the Commission's proposals is the so-called need to immediately fix the "sacred trust" known as Social Security. Again, the Social Security Trust Fund is entirely solvent until the year 2037; and thereafter, it is 78% solvent forever. Therefore, a bit of tweaking (like Means Testing) would easily fix it forever. Friends, we have simply been ripped off big time, because every single penny of payroll taxes collected for inclusion into the Social Security Trust Fund since 2001 has been siphoned away to pay for the Bush Tax cuts for millionaires and billionaires. So when the hell are we going to stop this terrible inequity and also prevent like inequities from ever happening to us again?
The actual Deficit Commission's Report can be found here: http://www.fiscalcommission.gov/... It is a relatively fast read.