Posts Tagged 'deficit commission'

What is the Fiscal Commission Co-Chairs’ Plan About?

What is the Fiscal Commission Co-Chairs’ Plan About?

Starting in less than a year (Oct. 1, 2011) when unemployment is supposedly back to normal, the Simpson-Bowles plan reduces projected deficits through 2020 by nearly $4 Trillion.  Spending cuts are twice revenue increases. (Extending all Bush tax cuts over same period would do the same deficit reduction.)    Not bailing out banks would have reduced deficit $1.5 trillion.   Discretionary spending under Congress’ control accounts for only 10% of deficit.  This will throttle any chances of lowering unemployment.  Most of deficit is caused by the recession, which the Co-Chairs’ plan will make worse, causing worse deficits.

Here are some of the pieces of the Co-Chairs’ plan:

Permanently Shrinks All Government Services by capping federal revenues at 21 pct of the GDP. The sum of Health, Education, Housing, Jobs Programs, Infrastructure Rebuilding, Social Security, and even military spending could never exceed 21% of GDP. This is less than spending from 1980-2008, when no baby boomers were starting Social Security and Medicare.

No repealing of Bush Tax Cuts for the Rich, no tax on stock or bond transactions, no eliminating the cap on Social Security Payroll taxes, no end of wars.  Instead,

Tax cuts for corporations and the rich; Tax increases for the middle class and the poor. Corporate tax rate is reduced from 35% to 26%.   The Individual rate for the richest is reduced from 10% to 8%.  There is a permanent extension of corporate tax credits for research.   There is a reduction or elimination of Mortgage Interest Deduction (while the housing market is still in disaster), and elimination of deductions for State and Local Taxes paid, contributions to your private retirement account, for charitable contributions,  and elimination of the Child Tax Credit.   Students must pay loans while still in school,   There’s a 15 cent/gallon gas tax, As Krugman says, “”(it) clearly represents a major transfer of income upward, from the middle class to a small minority of wealthy Americans.”

Social Security: Raises Retirement Age, Reduce benefits for middle-income recipients, Reduce Cost-of-Living Raises,  Moves Social Security from a universal plan toward a welfare plan:

  • Payroll tax cap raised to increase covered workers from 86% to 90% of workers by 2050! Even then, the rich don’t pay!

  • Cut benefits of middle-income earners: Half of Social Security recipients, who had earned above ($34,500), would be considered “high-income earners” and would be have their benefits cut from 17-36% depending on income, for example a 25% cut for people who had earned $43,000.

  • Raise Retirement Age: For full benefits, retirement age is raised from 67 to 69, an average 13% benefit cut; that discriminates against poor, who start working earlier and die earlier. To get partial benefits, retirement age is raised from 62 to 64, meaning two more years of poverty for seniors whose bodies are worn out or who can’t find jobs.

  • Reduce Cost-of-Living Raises: Raises would be based on new “chained CPI” inflation formula, .3% lower than now,  based on our alleged ability to switch to cheaper alternatives for goods and services that get priced beyond our means. What about, healthcare, which rose 4.2% last year while the regular CPI rose 1% .  By 2030, the COLA cuts would be a benefit cuts between 5-20% depending on income.
  • Means Testing, moving toward a welfare model of Social Security: Instead of raising the payroll tax cap so the rich pay the same as us on all their income, the Co-Chairs’ plan raises the payroll tax rate on the small portion of their income that’s taxed.  This undermines widespread support for the current, universal insurance model that has withstood 75 years of attacks.
  • Deficit Commission admits Social Security doesn’t increase deficit, so “savings” aren’t counted toward deficit reduction.  “Cuts are being made for Social Security’s own good.”

Medicare: Accelerate and intensify the cuts to Medicare that are in Obama Health Plan. (Increases in Medicare and Medicaid costs, are of course, the real drivers of increased future government expenses, and  single-payer, improved, expanded Medicare for All, is the only solution.  The Obama Plan greatly increases healthcare costs, and shifts the cost onto working families, particularly on Medicare.)

  • Federal health spending is supposed to be cut one-third by 2040, but no plan given.
  • The “Cadillac Insurance Tax” (a tax on insurance plans without ruinous deductibles or co-pays) would apply to less adequate insurance plans also.
  • Cuts in healthcare for veterans: “Modernize the Tricare health system” to increase premiums and co-pays for healthcare for vets.
  • It speeds up Obama Plan’s cuts to Medicare Advantage plans and charity hospitals that will serve the 23 million remaining uninsured, including all undocumented immigrants.
  • It strengthens the Independent Payment Advisory Board beyond its already-sweeping powers to cut Medicare payments to hospitals, doctors, equipment suppliers etc
  • It pushes Malpractice Reform, “tort reform,” to limit the ability of people to sue for damages in cases of medical malpractice.
  • Federal payments for Medicaid (Medi-Cal in Calif.) would be a fixed amount per year, no matter how much care was needed by poor patients in that state, making states cut their programs.  Old or sick Medicaid patients needing long-term care would have to pay more of costs.

Shortlink to this post:  http://wp.me/p3xLR-qf

Alternative Deficit-Reduction Plan: Death Spiral for Medicare and Its Patients

Bipartisan Policy Center (Domenici, Rivlin) Propose Their Deficit-Reduction Plan:
Privatize Medicare, Tax Employers’ Healthcare, Tax cuts for  Corporations and the Rich, and No Payments to Social Security Trust Fund for 2011.

Rivlin and Domenici propose a deficit-reduction plan that would privatize Medicare, cut its benefits, and further weaken Medicare’s financial basis.  Under their “premium support” plan, Medicare would no longer directly pay for seniors’ healthcare.  Instead, Medicare recipients will be issued voucher checks, and they will have to shop for their own health care, either traditional Medicare or a private health plan. The premiums of the private plans will go down because they can market themselves to healthy people at gyms, marathons etc. The premiums of traditional Medicare will go up because traditional Medicare must continue to accept sicker, more expensive patients.  Moreover, the voucher checks would not grow with the rate of medical inflation, but would be tied to the GDP plus 1%, so Medicare patients would pay increasingly out-of-pocket.  Over time, increasing numbers of seniors and people with disabilities would drop traditional Medicare because of its higher premiums, leaving traditional Medicare with the sickest, who could not survive the private plans’ managed care. As traditional Medicare’s patient base drops, its finances would become more precarious.  It is a death spiral for both Medicare and its patients.

Kaiser Health News, November 17, 2010

New Deficit Report Recommends Seniors Pay More For Medicare
http://www.kaiserhealthnews.org/Stories/2010/November/16/bipartisan-policy-center-medicare.aspx

Offering the latest tough-love strategy to reduce the nation’s debt, a panel of high-profile Republicans and Democrats on Wednesday recommended that Medicare beneficiaries pick up far more of their health care costs and the government substantially curb the amount both Medicare and Medicaid programs can grow in future years.

The panel, led by former Republican Sen. Pete Domenici of New Mexico and Alice Rivlin, the budget director under President Bill Clinton, also calls for a national debt-reduction sales tax of 6.5 percent, as well as changes in Social Security and income tax rates.

The debt reduction task force was created by the Bipartisan Policy Center, established by former congressional leaders of both parties. Its recommendations come a week after the chairmen of President Barack Obama’s commission on controlling the national debt proposed increasing the age at which people qualify for Social Security to 68 by 2050.

Document: Restoring America’s Future

Backers of the latest plan said they hoped it would spur a reluctant public and elected leaders to grapple with painful choices needed to get the country’s spending under control. But others warned the political prospects of the plan seemed doubtful — particularly for some of the more far-reaching ideas, such as limiting the amount the government would spend on Medicare beneficiaries.

Right now, premiums account for 25 percent of the cost of Part B, or the physician component of the program, with the government paying the balance. The task force would increase beneficiaries’ share to 35 percent.

In addition, starting in 2018, traditional Medicare would be turned into a “premium support” program that would limit the rate of increase of federal spending per beneficiary to one percent above the growth rate of the economy. Under such a plan, beneficiaries likely would pay more to stay in traditional fee-for-service Medicare though they could save money by getting coverage though private health plans that would compete against each other for business.

“I think the premium support is a feasible way of controlling costs,” Rivlin said Wednesday at a press briefing.

But this approach has never drawn much political support over the years. “It’s hard to see either party embracing a full blown premium support plan,” said Henry Aaron, a Brookings Institution expert who helped develop the idea in the mid-1990s. “The Democrats would be largely against it because of cuts in benefits and not enough Republicans would have a stomach for it. It would mean big benefit cuts and a substantial increase in out of pockets costs.”

AARP Executive Vice President John Rother said his group would oppose premium support. Of the overall task force report, he said it “raises lots of questions because of how it shifts more costs to individuals.”

The task force also recommends slowing the growth rate of Medicaid, the joint state-federal program for the poor and disabled.  But the report did not provide any specifics other than saying the state and federal government should explore changing the way they split paying the cost of Medicaid.

In addition, the task force proposes phasing out by 2028 the tax exclusion on employer-provided health care benefits. The group also would eliminate the so-called Cadillac tax on high-cost plans, a provision of the new health law that takes effect in 2018. Taxing employee health benefits would generate about $10 trillion in savings by 2040, more than any other revenue generator, according to the report.

Labor unions have opposed eliminating the tax exemption on health benefits out of concern it would lead employers to provide stingier benefits, said Paul Ginsberg, president of the nonprofit Center for Studying Health System Change and a consultant to the task force.

Michael Cannon, a health policy expert at the libertarian Cato Institute, said the premium support change to Medicare would have greater ramifications than the ideas offered last week by the chairmen of Obama’s commission. Their report recommended increasing cost-sharing for Medicare beneficiaries, but didn’t specify an amount, and changing the way doctors and hospitals are paid to encourage more efficient care.

“You can fiddle with the price control formulas as much as you want, but the people whose incomes are determined by those formulas are probably going to carry the day,” Cannon said. He said the plan’s short-term political prospects were few.

Other recommendations:

* On Social Security, raise the amount of wages subject to payroll taxes – now $106,800 — so that 90 percent would be covered, and “slightly” reduce the growth in benefits for the top 25 percent of beneficiaries.

* Establish only two income tax rates, 15 percent and 27 percent; end deductions for mortgage interest and charitable contributions, replacing them with 15 percent refundable credits, and lower the top corporate tax rate from 35 percent to 27 percent.

But the task force also veered sharply in the direction of reviving the economy and creating jobs with a recommendation for a payroll “tax holiday” in 2011 that would excuse employers and workers from paying the 12.4 percent tax into the Social Security Trust Fund.

Taking these and other steps, by 2020 federal spending would be reduced from a projected 26 percent of GDP to 23 percent, and the federal debt would be brought down below 60 percent of GDP, the task force said.

Projected Health Care Savings By 2040

* $10 trillion: phasing out the tax exemption on employer-provided health benefits.

* $7 trillion: impact of premium support plan.

* $3 trillion: changing the way states and the federal government split the costs of Medicaid.

* $644 billion: new soda tax.

* $300 billion: medical malpractice reforms such as caps on damages.

* $123 billion: increasing Medicare premium costs for beneficiaries.

Source: Debt Reduction Task Force of the Bipartisan Policy Center

 

short link to this post:  http://wp.me/p3xLR-q6

Protest Pete Peterson Social Security Wrecking Crew in San Francisco

Pete Peterson Vulture

Pete Peterson’s Social Security and Medicare Wrecking Crew
is coming to San Francisco Thursday, Sept. 23 at 5 PM.
Let’s Give Them the Welcome They Deserve!

Thursday, September 23, 5 PM
595 Market St. (at 2nd St., Montgomery BART, see map)
More information: call CARA at 510-663-4086, or M. Lyon at 415-215-7575

Please join us for a rally outside the Commonwealth Club at 5 PM.  Bring signs and banners.  Those able to purchase a ticket to the presentation and go inside, please do so. The reception is at 5:30 PM, the program starts at 6 PM.

The Peter G. Peterson Foundation and the Concord Coalition, right-wing think tanks that have railed against Social Security, Medicare, and Medicaid for years, are beginning a national “Fiscal Solutions Tour” to push their story.  “After our financial and policy wizards have whisked away the temporary problems of unemployment, deflation, and war, there will be new, deep fiscal problems that will threaten America’s economy and even its national security. To solve these problems, seniors, people with disabilities, and the poor must give up Social Security, Medicare, and Medicaid.”  Lies! These are the country’s most successful, popular, and life-sustaining social programs. We’ve already paid into them.  They are not failing. We will not give them up!

Peterson tried to stampede us into demanding these cuts last June, with “America Speaks,”  nineteen razzle-dazzle Town Hall meetings held simultaneously across the country, and inter-connected by closed-circuit TV.  It completely backfired. Though participants were given slanted background materials and slanted choices, they rejected cuts to social programs, endorsed higher taxes on the rich, demanded single-payer healthcare, and demanded huge military cuts.

Peterson’s “Fiscal Solutions Tour” is another try at pushing the same message under more controlled surroundings.  Let’s give him the same message: Hands Off Social Security, Medicare, and Medicaid!

Speakers: Robert Bixby, executive director of the Concord Coalition; David M. Walker, president and CEO of the Peter G. Peterson Foundation; Isabel Sawhill, senior fellow in economic studies, Brookings Institution; Michael Boskin, senior fellow at the Hoover Institution and Stanford economics professor; and Tom Campbell, former congressman (moderator).

Admission: $12 for Club members, $20 for nonmembers and $7 for students. For tickets, go to commonwealthclub.org or call (415) 597-6705.

See the Sept 17 SF Chronicle piece promoting this event.

Please forward this message.

shortlink to this posting:  http://wp.me/p3xLR-pD

Reduce Debt? Cut Oil Wars, not Social Security!

Social Security Works, June 1, 2010

Save Social Security

President Obama May Cut Social Security Benefits, Report Says

Helen Thomas, Hearst White House columnist

WASHINGTON — Say it isn’t so, Mr. President. You surely are not going to make a deal with Republicans to cut Social Security benefits, are you?

Here’s word from The Nation Magazine: “The President intends to offer Social Security as a sacrificial lamb to entice conservative deficit hawks into a grand bipartisan compromise in which Democrats agree to cut Social Security benefits while Republicans accede to significant tax increases to reduce government red ink.”

The grand compromise would form the crux of the recommendations by the new 18-member National Commission on Fiscal Responsibility that was set up to find ways to reduce the federal budget deficit. Commission co-chairs are former Sen. Alan Simpson, R-Wyo., and Erskine Bowles, a former chief of staff in the Clinton White House.

The panel’s recommendations are scheduled to be announced in December, safely after the November elections. A recommendation requires a minimum of 14 votes among the commissioners. If Obama agrees to ask Congress to cut Social Security benefits, it would amount to a sellout by a president of the same Democratic Party that embraced Franklin D. Roosevelt, the father of Social Security, back in 1935.

Social Security is not a charity. It is a trust fund created by contributions paid by workers and their employers, designed to assure a future livelihood, first for the elderly, then orphans, then the disabled. It’s a retirement savings plan — not a handout.

Alan Greenspan, the former chairman of the Federal Reserve Board, headed a Social Security Commission in 1982 under the Reagan administration that recommended a modest increase in taxes which resolved worries that the New Deal program might go broke.

If Obama is worried about the federal budget deficit, he shouldn’t turn to Social Security. The solution to the deficit is staring him right in the face: Obama should cut our human and money losses by getting out of the impossible — and costly — wars in Afghanistan and Iraq.

Of course, we do have plans to leave Iraq this summer — if leaving 50,000 occupation troops there is really leaving. Why are we doing that? This was the war of choice — not of necessity — that former President George W. Bush got us into, based on wrong information. Our continuing occupation of Iraq merely compounds our tragic mistake of invading in the first place.

Somehow I doubt that the Simpson-Bowles deficit commission will have the courage to tell the president about a very cool way to cut federal spending: Get American troops out of wars where we have no business.

Get real, Mr. President, cutting Social Security would be a break of trust with the American people. Millions of Americans cannot live without their Social Security stipends. So don’t tamper with those monthly checks.

Social Security is so deeply rooted in our society that the American people protested loudly when Bush came up with a half-baked plan to privatize Social Security. Fortunately, American voters saw to it that his Wall Street boondoggle went nowhere.

shortlink to this post:  http://wp.me/p3xLR-oc


Archives

Categories

RSS Gray Panthers in the News

  • An error has occurred; the feed is probably down. Try again later.

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 590 other followers


%d bloggers like this: