Looked at as a whole, the Budget Commission Report is just another way to protect the wealthy and their assets, without appearing to do so.
What I found remarkable in that report is the insistence that, to fix the budget deficit, Social Security and Medicare must take a substantial hit. This is irrational. Both are solvent well into the future, and when the current income starts being inadequate to cover current benefits, the simple fix is to raise the FICA cut-off or eliminate it entirely -- and/or start paying off the loans the SSA made to the General Fund when FICA income vastly exceeded benefit payouts.
My take on this is that the push to lower benefits and raise the retirement age is a ploy to make sure neither of those simple fixes is implemented. Taking off the FICA cap would, of course, raise taxes on the wealthy, who now stop paying into FICA at some point just over $100,000. Not politically acceptable, in some circles.
And reducing the amount that the combined benefits pay-out now requires going forward will thereby reduce the amount of that loaned FICA money the General Fund has to pay back at a given point in time. It's a double whammy on this side of the equation as well -- insist that China devalue its currency to make it easier for us to pay back what we owe them, and then, on the domestic front, reduce the SSA benefits, thereby in essence devaluing those loans/bonds as well.
For accounting purposes, Medicare and Social Security have been, and should remain, self-contained.
But, to my mind, so should two other key parts of the budget equation -- akin to gasoline taxes going to maintain the roads.
Here's my proposal.
1. Domestic programs other than SS and Medicare (which have their own designated funding sources) should be paid out of taxes assessed on those folks who benefit from those programs -- the middle class and below, say those making $250,000 or less a year. Education, housing, EPA, agriculture, small business, grants for road construction, alternative energy, etc.
2. The military/Pentagon/foreign war portion of the budget (now eating up 54 percent of the annual budget) should be paid for entirely by the upper classes -- those making $250,000 or more. Or maybe the cut-off should be a million dollars, whatever it works out to be, depending on the budget for those items.
So what happens in this scenario? The rich stop bitching about unemployment benefits, because it's not their nickel. But suddenly, they start caring about war and peace, because the lower the military budget, the less they pay in taxes. Since so many of those folks are the direct beneficiaries of the military industrial complex, of the wars waged for oil, for minerals, for safe passage, etc., it makes sense that they should pay their own way. That only seems fair. But paying for bribes to Taliban warlords, or inflated wages at Halliburton, suddenly get some serious attention. That debate could get very interesting very quickly.
I suggested in my last campaign, as the Democratic nominee in 2006 against Maine's Republican Senator Olympia Snowe, that if the rich were billed the cost of the wars in Iraq and Afghanistan, the conflicts would end in a week or two. I now think it would take a month or two. But if nothing else, discussing this kind of budget set-up would sure change the conversation in Washington.
