The federal government shut down is looming. I don’t like to point fingers (Hi Mr. Ryan, and hello there too, Mr. Boehner) so I won’t.
Instead, I’ll offer a very serious plan to solve the Budget crisis. A plan that goes much further than Rep. Ryan’s budget plan, or the Cracked Teapot Party Republicans (yes, I trademarked that term but feel free to use it liberally anyway) original demand for $100 BILLION of tax cuts when they ran for Congress.
So let’s begin, shall we?
First, l agree to all your tax cuts as one means to solve our deficit problem. A problem by the way that is oh so much more important than jobs or unemployment or providing essential government services like social security, medicare, medicaid, environmental protection, safe food to eat, scientific research, regulation of criminal organization Big Banks, preventing security fraud, helping more Americans go to college, hurricane forecasts and benefits for our veterans, to name but a few. I understand that eliminating all these things are of vital importance to Cracked Teapot Party Republicans. So serious that they will shut down the government rather than give up on their cause.
However, I suggest we raise the ante a bit. After all $60 BILLION, $70 BILLION even $100 BILLION of spending cuts is not going to solve the problem. The trouble is that those cuts alone will do nothing to eliminate the budget deficit. Indeed, I have it on serious authority that Rep. Ryan’s plan, if enacted will actually increase the deficit..
An analysis by the Congressional Budget Office (CBO) found on Tuesday that the long-term budget plan unveiled that day by Rep. Paul Ryan (R-Wisc.), chairman of the House Budget Committee, would increase the deficit relative to the GDP in the first 10 years, then would reduce it significantly after that. Much of that savings, though, will be because the poor and elderly will paying more for medical costs because of sharp reductions to Medicare and Medicaid benefits. […]
In addition, the CBO, which In an analysis released Tuesday, found that reduced payments to states for Medicaid would result in higher costs and less coverage for those dependent on the program.
While Ryan’s plan would realize spending cuts in its first 10 years, some of those cuts would be outpaced by tax cuts that are also part of the plan. So, in 2022, projections based on the current law show that public debt would reach 67% of GDP; under the proposed budget, debt would instead reach 70%. […]
“Federal payments for Medicaid under the proposal would be substantially smaller than currently projected amounts,” according to the analysis. “States would have additional flexibility to design and manage their Medicaid programs, and they might achieve greater efficiencies in the delivery of care than under current law. Even with additional flexibility, however, the large projected reduction in payments would probably require states to decrease payments to Medicaid providers, reduce eligibility for Medicaid, provide less extensive coverage to beneficiaries, or pay more themselves than would be the case under current law.”
I know, I know, many people do not consider the Congressional Budget Office (CBO) folks serious people because they don’t appear on Fox News/Opinion Shows or other cable news/opinion shows frequently (or in some cases every day) like Mike Huckabee, Sarah Palin, Michelle Bachmann, Juan Williams, and all the other usual suspects, but for the moment let’s pretend that the CBO includes has a few serious people working for it.
Alas, spending cuts alone are not going to solve the deficit problem. Heck, even one of your own has suggested that the Cracked Teapot Party spending cuts might not be such a hot idea:
In a letter released Thursday, Sen. Scott Brown called Republican efforts to cut government spending “irresponsible” and urged party leaders to get over their ideology and find an agreement on a final resolution to the government through the fiscal year. […]
“[R]ather than reaching a workable, bi-partisan solution to responsibly address our staggering deficit, we are repeatedly given a false choice between CR proposals that either don’t go far enough to reduce federal spending and proposals that set the wrong priorities that would disproportionately affect low-income families and seniors, while doing little to address critical, long-term issues,” Brown wrote. […]
“Reducing and eliminating needless spending and programs are appropriate, but a wholesale reduction in spending, without considering economic, cultural, and social impacts is simply irresponsible. We must also be mindful that many of the proposed spending reductions would disproportionately affect the neediest among us, including housing and heating assistance,” Brown said. “Likewise, some of the proposed cuts would be economically counterproductive, negatively impacting our ability to innovate and invest in research and development.”
Even Goldman Sachs Economists (and we know they are the “Gold Standard”) say your budget cuts would hurt our economy’s economic growth.
In a research note, economists at the Wall Street bank estimate that the House GOP’s spending bill — which would cut $61 billion between March and Sept. 30 — could reduce economic growth by 1.5 percentage points to 2 percentage points in the second and third quarters.
Your spending cuts alone are not going to solve the deficit problem. Of course, we could cut military spending (and I don’t mean Veteran benefits) significantly by withdrawing our troops from Iraq and Afghanistan (saving $171 BILLION in 2011) and cutting down on the rampant waste and fraud in defense contracting.
The GAO report raised a case in point: Last year alone [Diarist Note: this refers to 2008] , the DOD’s portfolio of weapons programs went $295 billion over original cost estimates. What’s more, the programs were running, on average, 21 months behind schedule. And when they were completed, they provided less than they promised.
However, last I heard you guys weren’t too keen on that idea, even though a government panel that included both Military officers and other civilian experts on cost cutting and fraud and waste prevention suggested this is something we ought to be doing. But hey, we all support the Military Industrial Complex the troops, so no expense can be spared there, I suppose (except for treatment for physical and mental disorders caused by numerous deployments, naturally.
Therefore, despite my many misgivings about your proposed spending cuts, I’m willing to accept them, provided you accept my idea to decrease the Federal Deficit even more with a simple an effective idea that, in the past actually led to a significant reduction on the Federal Government’s deficit and budget problems.
So here is my proposal. I suggest we raise the ante a bit.
And by a bit I mean a lot.
You see, I propose we give you all the spending cuts you want so long as you also agree to RAISE TAXES to increase revenues by an amount equal to your proposed SPENDING CUTS. You see, last year, before many of you became members of Congress, the Bush tax cuts were extended and other tax cuts were made in order to extend unemployment benefits for one year. Because of that fact, the government lost roughly $858 BILLION of revenue over the next ten years, or roughly $85.8 BILLION per year.
So I suggest that for every dollar of spending cuts we increase taxes by an amount that will raise revenues by the same amount. Dollar for dollar. Double the fun.
And I’m willing to increase my taxes by the same percentage that people who earn on average roughly twenty times what I earn have their taxes raised. By way of example if we raise taxes 4.5% on my income, than we should raise the tax rate on the top 1% by 4.5% also. No exceptions, no deductions. A straight 4.5% tax increase across the board for everyone who is currently required to pay taxes under the law.
Can you imagine how much deficit reduction we would get out of that? I can. Just allowing the Bush tax cuts to expire would have led to a reduction of the Federal Deficit by $3.9 Trillion over ten years!. That’s (let me get my calculator out) 390 BILLION per year for the next 10 years!
Even if we added in an adjustment for rising inflation pushing more people to have to pay the Alternative Minimum Tax (AMT for fiscal geeks), the tax revenues the government would have increased by $300 Billion per year!
That sort of dwarfs your Cracked Tea Party spending cuts proposal by a factor of five. I’m talking about some serious deficit deduction not some phony, misleading deficit non-reduction. In fact, to match your spending cuts we only have to raise taxes 1/5th of the amount that allowing the Bush tax cuts to expire last year would have done.
Of course, Rep. Ryan’s deficit reduction plan calls for increased tax cuts for the wealthiest Americans (and lost revenue) of 4.2 BILLION over the next ten years.
Ryan, a Wisconsin Republican, released his budget outline on April 5, and he set out just two parameters for the revenue side of the budget: The top individual and corporate tax rates should drop to 25 percent from 35 percent, and the government should collect about the same amount of money over the next decade as it would if Congress extended all of the income tax cuts expiring at the end of 2012. That’s $4.2 trillion less than the government would collect if Congress didn’t extend expiring tax breaks.
That’s a lot of benefits for rich people and corporations and none for anyone else. So Rep. Ryan has other plans to make up for all that lost revenue going to the One-Percenters and his good buddies in Corporate America.
For example, he would eliminate the home mortgage deduction (not a good thing for people who pay a significant amount their income each year for the mortgage on their homes), he would eliminate deductions for charitable gifts (not very good for charities some of whom actually help real people) and he would eliminate employer deductions for providing health insurance for their employees.
I think you can imagine what would be the result on middle class (upper and lower) families if all those deductions were eliminated. For one, what employer in their profit driven mind would agree to offer health insurance benefits to their employees without a tax deduction?
I don’t think that’s a serious plan, do you? I like my plan better. Much more serious. More deficit reduction. A lot more actually.
Sure it could be tweaked. Maybe we could raise taxes only the top 1% and eliminate corporate tax loopholes for the largest corporations. Just enough so those corporations that currently pay no US taxes (like General Electric) actually have to pay federal taxes for the privilege of making so many billions of dollars in profits off consumers in the American market. And then we wouldn’t need all those spending cuts at all to reduce the deficit!
You know, that sounds even more fair than my original plan! Don’t you agree? Yes, just forget my original plan. Let’s go with Plan No. 2. After all, that’s what the Republicans always do and it seems to work for them.
I think my plan looks better and more serious all the time!
In any event, I think if Republicans are serious about achieving real deficit reduction (such as happened during the eight years of the Clinton administration) Republicans must accept my plan. Otherwise, they don’t look very serious about deficit reduction, which as we all know is their SINGLE BIGGEST PRIORITY as their leaders have told us so many times (but only since Obama was elected).
Because, hey, I’m dead serious about my plan. And frankly, Republicans, your “plan” makes you look as serious as zombies in a bad B-Horror Movie from the Fifties.
Just saying …