Most, if not all, of these plans are DOA. Political feasibility is the issue. Since the Dems lost their stranglehold on the government they had the past two years, radical change is probably not in the cards. Obama had the chance to remake the USG – the Dems could have rammed through a lot if they wished. For some reason they didn’t do much more than ObamaCare.
So we get to muddle through for awhile in divided government – whichI am thankful for…
Of course, “strangle-hold” is very convenient if you want to give the impression, as buffy has since before Obama was elected, that the GOP has no power, that everything from the moment Obama was sworn in is the Democrats fault. If the GOP filibusters, well, its Obama’s fault. If Obama tries to pass legislation written to attract GOP votes and the word goes out from GOP central that Obama’s failure is more important than good legislation, that’s Obama’s fault. If one Senator decides to hold up a treaty that moves in the direction that responsible people on both sides of the isle say is the right one, that’s Obama’s fault.
“Strangle-hold” is so wonderfully imprecise that it can cover all kinds of notions. The GOP has done an enormous amount to obstruct legislation, and buffy is standing on the sidelines applauding. Check the record. What I have described here is buffy’s view.
Party makeup of the 111th congress. ———–Total Seats –Dems -Repubs –Indipendents Senate——–100 ——–57 —–41 ———–2 House —— 435 ——-256 —178 ———– 1
Dunno, KH, but that looks like a strangle hold. if you can write legislation to pick off just one Republican Senator. Seems more likely that the Dem majorites were squandered by writing bad legislation. Note to ABers: Looks like few here actually want to discuss the deficit issue, but prefer to continue the bickering. Today, 1:36:53 PM – Flag – Like – Reply – Delete – Edit – Moderate
Whather that rumor is true or not we do know that there are myriad efforts at the state and local levels to cope with deficits by reducing governmental costs. Those efforts are frequently spear headed by calls for furloughing municipal empolyees, freezing municipal employee pay, and laying off municipal employees. These efforts are generally suggested to be implemented across the various departments of those state and local governments. Freezing federal civil service pay for two years is but one more example of balancing the budget on the backs of the employees. These efforts to reduce government spending are usually presented as preferable to increasing the taxes of the citizens of each government entity. In what way is a reduction in employee earnings not a form of tax increase; one that is limited to those employees? In effect such pay decreases for municipal employees, civil servants, is tantamount to a tax bight, but a tax that is limited to only a specific segment of the citizen population. And that is not a particularly wealthy segment of the citizen population.
If there is some funtion being carried out by a government that is not a worth while activiy that is benefitial to the citizens of that government then it should be eliminated along with its cost. That doesn’t sound like most governmental activities. To the extent that any government’s activities are benefitial to its citizens the costs of those activities are necessary and well spent. So again the question comes up as to why the employees of governments are asked to bear the brunt of efforts to cut costs and avoid an increase in taxes. If an empl;oyee is furloughed without pay his/her earnings have been reduced in no less a manner than if my taxes had been raised. The same is true for a prolonged wage freeze and it is especially true and onerous in the case of lay offs.
Once again you prove that Bush Jr was a much more competant executive than his replacement. Bush managed to get his agenda through, mostly with overwelmingly bi-partisan support, with far less majorities and after 2006 minorities than anything Obama faces. Even after 2006 Dems overwelmingly supported Bush’s surge and war effort repeatedly with their votes. Even after being elected to end the war, instead they supported Bush (and still mostly follow Bush’s foriegn policy).
Nice to see you’ve joined the reality based viewpoints demonstrating that you voted for someone so inexperienced and now proven incompetant for President. How’s Gitmo or DADT going for you?
Stanglehold (as CoRev points out) is a perfect example of what Obama and the Dems had. To bad they couldn’t propose popular legislation during that time – luckily we missed cap and trade and other measures design to reduce individual liberty.
If they are such great, indespensible employees they should have no problem finding jobs in the private sector. Every Dem I’ve ever hearrd has praised these outstanding employee’s over and over. So they should be fine. If they don’t like the pay freeze they are plenty of options for such hardworking outstanding employees. Heck I bet companies are already salivating at the oppurtunity to hire disgruntled TSA agents.
Its a free country, if they don’t like the pay and benefits go elsewhere or start your own business.
However, there will be the “tried and true incentives” and early “retirements” which will mostly be taken by the folks who can find work outside the womb of civil service.
In the end, the US civil service (like state and local counterparts) is ever more useless and more prone to honest services fraud, which used to be the domain of support contractors.
Used to find civilians who knew too much about very narrow subject, now there is no one that knows anything and less concern for public good and more politics.
“other measures design to reduce individual liberty.” Errrr? In the case of don’t ask don’t tell (DADT) you mean the Obama cannot “reduce the individual liberty” to impose one community’s gay baiting fears of the last generation on good men and women who might service and might not go lock step with the radical religionists’ cabal in the DoD…………..
You probably think the war between the states was fought because the abolitionists were taking “measures design[ed] to reduce individual liberty” to own other men.
CoRev – “Note to ABers: Looks like few here actually want to discuss the deficit issue, but prefer to continue the bickering.”
Quite correct. It’s the very reason that AB is not as good a blog as could be the case. Too many of the well read and well informed participants have left. There is now a lack of intellectual inquisitiveness present coupled with general laziness.
How can a reasonable discussion regarding deficit control be conducted when the focus of each of the “commissions” noted is so heavily weighted on reforming Social Security though Social Security is not a factor in the budget deficit. Only the Schakowsky plan makes a clear statement to that effect. Bowles-Simpson acknowledges that point, but then goes on to devote 20% of its proposal to the reform of Social Security. If the discussion starts off with a set of lies where is it expected to go to from there?
Bowles-Simpson “Chairmen’s Mark” draft plan “Reform Social Security for its own sake, not for deficit reduction.” The proposal uses both reform and strengthen to describe its plan for Social Security. It goes on to devote ten out of fifty proposal pages to the effort though the implication is that the reform is not an effort at deficit reduction. Galston-MacGuineas plan: “Changing demographics and growing health care costs create the major long-term fiscal challenge in this country—as well as in many others. Over the next couple of decades, as the baby boomers retire, the number of elderly Americans will soar both in absolute numbers and as a share of the total population; this trend will continue as life expectancy continues to rise.”
Peterson-Pew Commission plan: “Fiscal exposures would include future promises for Social Security and Medicare benefits, explicit liabilities and other contractual obligations, and military and civilian pensions. They would be estimated from the annual financial statements of the U.S. government.”
Schakowsky plan: “Social Security has nothing to do with the deficit. Addressing the Social Security issue as part of the deficit question is like attacking Iraq to retaliate for the 9/11 attacks – there is simply no relationship between the two and attempting to conflate them does a grave disservice to America’s seniors.”
Rivlin-Domenici plan: “Strengthen Social Security
In order to guarantee that Social Security can pay benefits for the next 75 years and beyond:” And goes on to provide a six point plan to accompl;ish that goal. Just like the Greenspan Commission did in 1983. From Wikipedia: “
Under the 1983 amendments to Social Security, signed into law by President Ronald Reagan, a previously-enacted increase in the payroll tax rate was accelerated, additional employees were added to the system, the full-benefit retirement age was slowly increased, and up to one-half of the value of the Social Security benefit was made potentially taxable income.” Every thing old is new again.
spencer – “All these budget reduction plans are great theories. But which ones have the potential of being politically feasible? Once we get an answer to that it would be interesting and worthwhile to discuss that answer. Other wise it seems to be just a waste of time to discuss all this political posturing.”
That’s like saying, “Let’s discuss the legislation after it has been passed.”
That isn’t the approach that was undertaken on the various healthcare proposals.
Here’s more fiscal situation analysis and review of plans:
The Right Target: Stabilize the Federal Debt Long-Term Budget Outlook Is Bleak; Requires Major Changes to Programs, Revenues, and Health Care CBPP January 12, 2010 http://www.cbpp.org/cms/index.cfm?fa=view&id=3049
Bowles-Simpson Budget Plan: A Useful Start, But Changes Needed — Lacks an Appropriate Balance Between Program Cuts and Revenue Increases CBPP November 16, 2010 http://www.cbpp.org/cms/index.cfm?fa=view&id=3325
“All SSA cashflow shortfalls impact deficit spending requirements absent other budget measures to bring the fiscal year budgets back into the black for each fiscal year going forward.” CoRev
As noted, start with a lie, or maybe just a half truth, and you have only lies and half truths to answer to. Are you afraid to make mention of the Trust Fund that supplements those shortfalls. That’s the same Trust Fund that FICA excess payments have been building over the past thirty years for the express purpose of supplementing FICA deductions now and going forward. Is the debt represented by the Trust Fund any less legitimate than the debt represented by any other Treasury Notes. Yes, there is a deficit result of the annual budget and there is a mounting debt accrued by years of deficit spending on wars of adventure and inappropriate tax breaks for the wealthiest Americans and corporations. Social Security is a holder of Treasury debt, no different than is any other holder of such debt. That doesn’t make Social Security responsible for the deficit any more than your purchase of government bonds makes you responsible for that deficit.
[Copied from an unrelated thread as identified below]
Posted by Rdan:
Then take the assumptions in the NYT to task along the same lines. Some obvious choices were left out.
Calling the hardwork done by some of the Bears as quibbles is disengenious at best, and debating issues that are being fought with massive amounts of political monies and advertising is a lesson in futility. I agree with spencer and buffpilot that it will be wasted energy to date…these issues are framed in ways that are important but bypass the economic realities and caveats.
if I remember correctly, some of the first mention in the healthcare debate was caught by a Bear, the MLR formulas, and still is discounted after a serious of amount of energy was spent following the ins and outs of that debate.
Dan – Monday, November 29, 2010, 4:12:29 PM – “I also encourage voters to look at who is pushing the non-deficit social security issue instead of the medicare problem.”
You continue to make this absurd claim. It sounds like you’re repeating the standard talking point echoed by others. Regardless, your claim is false. Negative SSA OASDI cashflow balances do, in fact, impact the General Fund and its fiscal year deficits. Try not confusing the FY budget deficits with the U.S. national debt as they are two different things. The Fiscal Commission charter provides specific guidance as to the Commission’s duties. You might read it in order to understand what their taskings were.
Dan – Monday, November 29, 2010, 4:23:01 PM – “Then take the assumptions in the NYT to task along the same lines. Some obvious choices were left out.”
Yeah, some choices were left out. But this blog hasn’t had a main post about the NYTimes Budget Puzzle. Why bitch about something you haven’t bothered to discuss?
Dan – “Calling the hardwork done by some of the Bears as quibbles is disengenious at best, and debating issues that are being fought with massive amounts of political monies and advertising is a lesson in futility. I agree with spencer and buffpilot that it will be wasted energy to date…these issues are framed in ways that are important but bypass the economic realities and caveats.”
You need to stick with the facts. Here is what I actually stated:
“We have witnessed plenty of lopsided complaining at AB regarding two of the fiscal year deficit and national debt reduction plans. The limited focus thus far misses the bigger picture as there are more than two plans on the table and budget considerations go well beyond one or two issues. All of the plans deserve a thorough review and side-by-side comparison.”
None of the main posts have dealt with the proposals as individual packages. The two proposals that have been discussed briefly fail to acknowledge that the authors of the proposals stated that their efforts have to be considered as a package for implementation. Apparently, you didn’t read the proposals. Picking apart a few pieces isn’t the same thing as performing a thorough analysis.
You’re apparently on the lazy bandwagon, waiting for legislation to be passed prior to discussing it. And you’re sadly out to lunch if you think that the proposals are all bypassing economic realities. The proposals, however different, are focused on fiscal sustainability and we are not on that path.
What I stated is the truth. Don’t try to pretend otherwise.
The combined SSA OASDI trust funds represent a financial liability that must be repaid. It’s a liability like any other liability that the U.S. Government is obligated to repay.
As the U.S. Government provides redemptions to the SSA combined OASDI trust funds, the General Fund will be impacted just as it will be when Federal publicly held debt interest payment obligations are paid. Absent major changes in the federal budget, the needs of the SSA OASDI programs will result in increased deficit spending. Period.
The Fiscal Commission was specifically tasked with identifying improvements for both the medium-term and long-term fiscal situations in which the U.S. Government finds itself.
Those who want to play a little game and say that the repayment obligations for any mandatory programs’ funding or publicly held debt interest obligations don’t impact fiscal year budgets are not playing with a full deck.
What matters is the projected fiscal situation with the fiscal year budgets, both in the medium-term and long-term. That’s the issue facing the Fiscal Commission, the President, and the Congresses.
The simple fact is that the operations of the U.S. Government will be fully supported by deficit financing no later than 2025 or 2027 other than revenues available to support mandatory programs and publicly held debt interest payment obligations; that fiscal situation is not sustainable.
“Those who want to play a little game and say that the repayment obligations for any mandatory programs’ funding or publicly held debt interest obligations don’t impact fiscal year budgets are not playing with a full deck.” MG
I don’t disagree with that statement, but the issue is how the impact on the budget is to be dealt with. The Trust Fund Treasuries are a debt to the Social Security program and its current and future beneficiaries. What then? Is that debt to be retired without repayment? If so why not retire without repayment the debt represented by all other Treasury Notes? China, Japan, Korea, etcv along with the welathiest of our own citizens hold such Treasury Notes. Is the debt owed to them any more significant than that owed to all the Social Security program participants? That’s the question. Try to formulate an honest answer that doesn’t hold one group of bond holders sacrosanct at the expense of others.
It is an interesting problem. The U.S. Government has to honor all of its debt obligations, including mandatory programs’ trust fund reimbursements. Otherwise, serious credit financing problems will occur and likely derail the economy and perhaps many other economies of the world.
The most viable approach to handling the SSA trust funds is to adopt a plan similar to the NW Plan and restore positive cashflow for those two mandatory programs. Not excess positive cashflow, mind you, but slightly positive. Granted, that doesn’t resolve the problem with the SSA trust funds which would then continue to grow, earning more interest.
We would be having a slightly different conversation had all of the excess cashflow into the SSA trust funds (and other trust funds) been authorized to be put in open market publicly held U.S. Government debt. Perhaps the government wouldn’t have run up such large fiscal year deficits or approved the latest two rounds of tax cuts.
I don’t know the best answer for resolving the problem of the the growing SSA combined trust funds. It’s easy to say, as an example, that a payroll tax holiday would be a possible answer whether accomplished now or in the future. But that approach comes with its costs to fiscal year budgets for each year that such effort would be undertaken.
I am not in favor of refusing to honor the debt obligations sitting in the SSA trust funds. But a balancing act is needed to keep the fiscal year budgets afloat.
My biggest concern, as shared previously is this problem: The simple fact is that the operations of the U.S. Government will be fully supported by deficit financing no later than 2025 or 2027 other than revenues available to support mandatory programs and publicly held debt interest payment obligations; that fiscal situation is not sustainable.
I have tried to sort out the best way to handle the various trusts funds (SSA and others), but my ideas aren’t prime time thus far. Wish I was smarter.
Buff, It has nothing to do with the quality of the individual employee’s work or that of the group as a whole. It has only to do with whether the work being performed is necessary to the function of government as its citizens have requiired. The supervisory pwesonnel have the responsibililty of assuring the quality of the work force. If someone is doing the job they are assigned to do and if that job is a necessary function of the organization, then why is that employee expected to work for less in order to reduce other citizens’ taxes. The first step in a budget analysis is to determine what functions need to be performed. The second step is to determine how to pay the cost of the performance.
It’s a cheap shot for a retired military man to suggest that if some group of workers doesn’t like having to accept lower pay so that the rest of us can escape the rising cost of government. If Obama wants workers to “share the sacrifice” he needs to ask that of all citizens not just federal employees
The only difficulty in meeting the debt obligations of the government is the reluctance of our representatives to ask all of its beneficiat]ries to bear the burden of the cost. I’m not referring to the Social Security beneficiaries, but instead to the beneficiaries of our government’s economic policies. The Bush tax cuts and the de-regulation of the finance industry have caused a significant skew to occur in the distribution of wealth in this country. As ye reap so shall ye sow? A bit of a reversal of the concept, but just as legitimate. Those who benefit the most owe the greatest share. Tax the wealthy as is required because that is where the ability to pay resides. Stop the reliance on exploited labor is the second, and the longer term, step to take in restoring the tax base. There is no secret to a healthier economy for the country, but it doesn’t suit our wealthiest citizens regardless of the largess that they enjoy as a result of government policy.
We’re not operating a closed economy, so the impact of U.S. trade policy should also be on the table.
The goods-producing sector of the economy has been significantly impacted during this decade. The U.S. has lost over 40,000 production plants since 2001. Manufacturing employment declined by over 3.8 million between 2000 and 2008, and is presently down another 1.7 million. Similarly, the service-providing sector of the economy has been impacted, though to a lesser extent. As an example, information technology employment declined by 646,000 during the same period, and is presently down another 269,000.
Add in one of three economic development multipliers for the 5.5 million lost manufacturing jobs and related plant closures and we’re talking about collective community job losses on the order of 11 million, 16.5 million, or 22 million related to the manufacturing industry since 2000. Take your pick. Now, the R&D facilities are being relocated abroad along with higher technology production and a broader range of services not dependent on geographic presence needs. The floodgates are still down.
If we’re not going to address this problem, then we will continue down the path of reduced employment opportunities and, most likely, reduced tax revenues in comparison to what could have been provided. The service sector is not covering the gap for employment or tax revenue offset.
MG, this thread could get interesting IF the ABers actually want to have a meaningful discussion.
All these budget reduction plans are great theories.
But which ones have the potential of being politically feasible?
Once we get an answer to that it would be interesting and worthwhile to discuss that answer.
Other wise it seems to be just a waste of time to discuss all this political posturing.
Spencer – right on the money.
Most, if not all, of these plans are DOA. Political feasibility is the issue. Since the Dems lost their stranglehold on the government they had the past two years, radical change is probably not in the cards. Obama had the chance to remake the USG – the Dems could have rammed through a lot if they wished. For some reason they didn’t do much more than ObamaCare.
So we get to muddle through for awhile in divided government – whichI am thankful for…
Islam will change
Rumor out that Obama is freezing federal civil service pay for 2 years any more on that??
A little something from the White House on that. White House has proposed a pay freeze, but it needs Congressional action.
Of course, “strangle-hold” is very convenient if you want to give the impression, as buffy has since before Obama was elected, that the GOP has no power, that everything from the moment Obama was sworn in is the Democrats fault. If the GOP filibusters, well, its Obama’s fault. If Obama tries to pass legislation written to attract GOP votes and the word goes out from GOP central that Obama’s failure is more important than good legislation, that’s Obama’s fault. If one Senator decides to hold up a treaty that moves in the direction that responsible people on both sides of the isle say is the right one, that’s Obama’s fault.
“Strangle-hold” is so wonderfully imprecise that it can cover all kinds of notions. The GOP has done an enormous amount to obstruct legislation, and buffy is standing on the sidelines applauding. Check the record. What I have described here is buffy’s view.
Party makeup of the 111th congress.
———–Total Seats –Dems -Repubs –Indipendents
Senate——–100 ——–57 —–41 ———–2
House —— 435 ——-256 —178 ———– 1
Dunno, KH, but that looks like a strangle hold. if you can write legislation to pick off just one Republican Senator. Seems more likely that the Dem majorites were squandered by writing bad legislation.
Note to ABers: Looks like few here actually want to discuss the deficit issue, but prefer to continue the bickering.
Today, 1:36:53 PM – Flag – Like – Reply – Delete – Edit – Moderate
Whather that rumor is true or not we do know that there are myriad efforts at the state and local levels to cope with deficits by reducing governmental costs. Those efforts are frequently spear headed by calls for furloughing municipal empolyees, freezing municipal employee pay, and laying off municipal employees. These efforts are generally suggested to be implemented across the various departments of those state and local governments. Freezing federal civil service pay for two years is but one more example of balancing the budget on the backs of the employees. These efforts to reduce government spending are usually presented as preferable to increasing the taxes of the citizens of each government entity. In what way is a reduction in employee earnings not a form of tax increase; one that is limited to those employees? In effect such pay decreases for municipal employees, civil servants, is tantamount to a tax bight, but a tax that is limited to only a specific segment of the citizen population. And that is not a particularly wealthy segment of the citizen population.
If there is some funtion being carried out by a government that is not a worth while activiy that is benefitial to the citizens of that government then it should be eliminated along with its cost. That doesn’t sound like most governmental activities. To the extent that any government’s activities are benefitial to its citizens the costs of those activities are necessary and well spent. So again the question comes up as to why the employees of governments are asked to bear the brunt of efforts to cut costs and avoid an increase in taxes. If an empl;oyee is furloughed without pay his/her earnings have been reduced in no less a manner than if my taxes had been raised. The same is true for a prolonged wage freeze and it is especially true and onerous in the case of lay offs.
Kharris,
Once again you prove that Bush Jr was a much more competant executive than his replacement. Bush managed to get his agenda through, mostly with overwelmingly bi-partisan support, with far less majorities and after 2006 minorities than anything Obama faces. Even after 2006 Dems overwelmingly supported Bush’s surge and war effort repeatedly with their votes. Even after being elected to end the war, instead they supported Bush (and still mostly follow Bush’s foriegn policy).
Nice to see you’ve joined the reality based viewpoints demonstrating that you voted for someone so inexperienced and now proven incompetant for President. How’s Gitmo or DADT going for you?
Stanglehold (as CoRev points out) is a perfect example of what Obama and the Dems had. To bad they couldn’t propose popular legislation during that time – luckily we missed cap and trade and other measures design to reduce individual liberty.
Glad you coming around!
Islam will change
Jack,
If they are such great, indespensible employees they should have no problem finding jobs in the private sector. Every Dem I’ve ever hearrd has praised these outstanding employee’s over and over. So they should be fine. If they don’t like the pay freeze they are plenty of options for such hardworking outstanding employees. Heck I bet companies are already salivating at the oppurtunity to hire disgruntled TSA agents.
Its a free country, if they don’t like the pay and benefits go elsewhere or start your own business.
Islam will change
I need to in part agree with buff.
However, there will be the “tried and true incentives” and early “retirements” which will mostly be taken by the folks who can find work outside the womb of civil service.
In the end, the US civil service (like state and local counterparts) is ever more useless and more prone to honest services fraud, which used to be the domain of support contractors.
Used to find civilians who knew too much about very narrow subject, now there is no one that knows anything and less concern for public good and more politics.
Almost ready to pull my trigger, buff.
ilsm will not change
buffy,
“other measures design to reduce individual liberty.” Errrr?
In the case of don’t ask don’t tell (DADT) you mean the Obama cannot “reduce the individual liberty” to impose one community’s gay baiting fears of the last generation on good men and women who might service and might not go lock step with the radical religionists’ cabal in the DoD…………..
You probably think the war between the states was fought because the abolitionists were taking “measures design[ed] to reduce individual liberty” to own other men.
Property rights and all.
ilsm will not change
CoRev – “Note to ABers: Looks like few here actually want to discuss the deficit issue, but prefer to continue the bickering.”
Quite correct. It’s the very reason that AB is not as good a blog as could be the case. Too many of the well read and well informed participants have left. There is now a lack of intellectual inquisitiveness present coupled with general laziness.
How can a reasonable discussion regarding deficit control be conducted when the focus of each of the “commissions” noted is so heavily weighted on reforming Social Security though Social Security is not a factor in the budget deficit. Only the Schakowsky plan makes a clear statement to that effect. Bowles-Simpson acknowledges that point, but then goes on to devote 20% of its proposal to the reform of Social Security. If the discussion starts off with a set of lies where is it expected to go to from there?
Bowles-Simpson “Chairmen’s Mark” draft plan
“Reform Social Security for its own sake, not for deficit reduction.” The proposal uses both reform and strengthen to describe its plan for Social Security. It goes on to devote ten out of fifty proposal pages to the effort though the implication is that the reform is not an effort at deficit reduction.
Galston-MacGuineas plan:
“Changing demographics and growing health care costs create the major long-term fiscal challenge in this country—as well as in many others. Over the next couple of decades, as the baby boomers retire, the number of elderly Americans will soar both in absolute numbers and as a share of the total population; this trend will continue as life expectancy continues to rise.”
Peterson-Pew Commission plan:
“Fiscal exposures would include future promises for Social Security and Medicare benefits, explicit liabilities and other contractual obligations, and military and civilian pensions. They would be estimated from the annual financial statements of the U.S. government.”
Schakowsky plan:
“Social Security has nothing to do with the deficit. Addressing the Social Security issue as part of the deficit question is like attacking Iraq to retaliate for the 9/11 attacks – there is simply no relationship between the two and attempting to conflate them does a grave disservice to America’s seniors.”
Rivlin-Domenici plan:
“Strengthen Social Security
In order to guarantee that Social Security can pay benefits for the next 75 years and beyond:” And goes on to provide a six point plan to accompl;ish that goal. Just like the Greenspan Commission did in 1983. From Wikipedia: “
Under the 1983 amendments to Social Security, signed into law by President Ronald Reagan, a previously-enacted increase in the payroll tax rate was accelerated, additional employees were added to the system, the full-benefit retirement age was slowly increased, and up to one-half of the value of the Social Security benefit was made potentially taxable income.” Every thing old is new again.
spencer – “All these budget reduction plans are great theories. But which ones have the potential of being politically feasible? Once we get an answer to that it would be interesting and worthwhile to discuss that answer. Other wise it seems to be just a waste of time to discuss all this political posturing.”
That’s like saying, “Let’s discuss the legislation after it has been passed.”
That isn’t the approach that was undertaken on the various healthcare proposals.
I forget to add this plan:
The Roadmap Plan
by U.S. Representative Paul Ryan
http://www.roadmap.republicans.budget.house.gov/Plan/
—–
Here’s more fiscal situation analysis and review of plans:
The Right Target: Stabilize the Federal Debt
Long-Term Budget Outlook Is Bleak; Requires Major Changes to Programs, Revenues, and Health Care
CBPP
January 12, 2010
http://www.cbpp.org/cms/index.cfm?fa=view&id=3049
Bowles-Simpson Budget Plan: A Useful Start, But Changes Needed —
Lacks an Appropriate Balance Between Program Cuts and Revenue Increases
CBPP
November 16, 2010
http://www.cbpp.org/cms/index.cfm?fa=view&id=3325
Peterson-Pew Budget Plan: Ineffective At Best, Harmful At Worst
CBPP
November 18, 2010
http://www.cbpp.org/cms/index.cfm?fa=view&id=3330
—–
Defense analysis:
How the Various Plans Compare
The Defense Budget and the Deficit
By Winslow T. Wheeler
November 26 – 28, 2010
http://www.counterpunch.org/wheeler11262010.html
“All SSA cashflow shortfalls impact deficit spending requirements absent other budget measures to bring the fiscal year budgets back into the black for each fiscal year going forward.” CoRev
As noted, start with a lie, or maybe just a half truth, and you have only lies and half truths to answer to. Are you afraid to make mention of the Trust Fund that supplements those shortfalls. That’s the same Trust Fund that FICA excess payments have been building over the past thirty years for the express purpose of supplementing FICA deductions now and going forward. Is the debt represented by the Trust Fund any less legitimate than the debt represented by any other Treasury Notes. Yes, there is a deficit result of the annual budget and there is a mounting debt accrued by years of deficit spending on wars of adventure and inappropriate tax breaks for the wealthiest Americans and corporations. Social Security is a holder of Treasury debt, no different than is any other holder of such debt. That doesn’t make Social Security responsible for the deficit any more than your purchase of government bonds makes you responsible for that deficit.
[Copied from an unrelated thread as identified below]
Posted by Rdan:
Then take the assumptions in the NYT to task along the same lines. Some obvious choices were left out.
Calling the hardwork done by some of the Bears as quibbles is disengenious at best, and debating issues that are being fought with massive amounts of political monies and advertising is a lesson in futility. I agree with spencer and buffpilot that it will be wasted energy to date…these issues are framed in ways that are important but bypass the economic realities and caveats.
if I remember correctly, some of the first mention in the healthcare debate was caught by a Bear, the MLR formulas, and still is discounted after a serious of amount of energy was spent following the ins and outs of that debate.
Monday, November 29, 2010, 4:23:01 PM
http://www.angrybearblog.com/2010/11/proposed-bet-for-professors-bryan.html#comments
Dan – Monday, November 29, 2010, 4:12:29 PM – “I also encourage voters to look at who is pushing the non-deficit social security issue instead of the medicare problem.”
You continue to make this absurd claim. It sounds like you’re repeating the standard talking point echoed by others. Regardless, your claim is false. Negative SSA OASDI cashflow balances do, in fact, impact the General Fund and its fiscal year deficits. Try not confusing the FY budget deficits with the U.S. national debt as they are two different things. The Fiscal Commission charter provides specific guidance as to the Commission’s duties. You might read it in order to understand what their taskings were.
Dan – Monday, November 29, 2010, 4:23:01 PM – “Then take the assumptions in the NYT to task along the same lines. Some obvious choices were left out.”
Yeah, some choices were left out. But this blog hasn’t had a main post about the NYTimes Budget Puzzle. Why bitch about something you haven’t bothered to discuss?
Dan – “Calling the hardwork done by some of the Bears as quibbles is disengenious at best, and debating issues that are being fought with massive amounts of political monies and advertising is a lesson in futility. I agree with spencer and buffpilot that it will be wasted energy to date…these issues are framed in ways that are important but bypass the economic realities and caveats.”
You need to stick with the facts. Here is what I actually stated:
“We have witnessed plenty of lopsided complaining at AB regarding two of the fiscal year deficit and national debt reduction plans. The limited focus thus far misses the bigger picture as there are more than two plans on the table and budget considerations go well beyond one or two issues. All of the plans deserve a thorough review and side-by-side comparison.”
None of the main posts have dealt with the proposals as individual packages. The two proposals that have been discussed briefly fail to acknowledge that the authors of the proposals stated that their efforts have to be considered as a package for implementation. Apparently, you didn’t read the proposals. Picking apart a few pieces isn’t the same thing as performing a thorough analysis.
You’re apparently on the lazy bandwagon, waiting for legislation to be passed prior to discussing it. And you’re sadly out to lunch if you think that the proposals are all bypassing economic realities. The proposals, however different, are focused on fiscal sustainability and we are not on that path.
Jack,
What I stated is the truth. Don’t try to pretend otherwise.
The combined SSA OASDI trust funds represent a financial liability that must be repaid. It’s a liability like any other liability that the U.S. Government is obligated to repay.
As the U.S. Government provides redemptions to the SSA combined OASDI trust funds, the General Fund will be impacted just as it will be when Federal publicly held debt interest payment obligations are paid. Absent major changes in the federal budget, the needs of the SSA OASDI programs will result in increased deficit spending. Period.
The Fiscal Commission was specifically tasked with identifying improvements for both the medium-term and long-term fiscal situations in which the U.S. Government finds itself.
Those who want to play a little game and say that the repayment obligations for any mandatory programs’ funding or publicly held debt interest obligations don’t impact fiscal year budgets are not playing with a full deck.
What matters is the projected fiscal situation with the fiscal year budgets, both in the medium-term and long-term. That’s the issue facing the Fiscal Commission, the President, and the Congresses.
The simple fact is that the operations of the U.S. Government will be fully supported by deficit financing no later than 2025 or 2027 other than revenues available to support mandatory programs and publicly held debt interest payment obligations; that fiscal situation is not sustainable.
ilsm,
Good Luck – you’ll need it…
“Those who want to play a little game and say that the repayment obligations for any mandatory programs’ funding or publicly held debt interest obligations don’t impact fiscal year budgets are not playing with a full deck.” MG
I don’t disagree with that statement, but the issue is how the impact on the budget is to be dealt with. The Trust Fund Treasuries are a debt to the Social Security program and its current and future beneficiaries. What then? Is that debt to be retired without repayment? If so why not retire without repayment the debt represented by all other Treasury Notes? China, Japan, Korea, etcv along with the welathiest of our own citizens hold such Treasury Notes. Is the debt owed to them any more significant than that owed to all the Social Security program participants? That’s the question. Try to formulate an honest answer that doesn’t hold one group of bond holders sacrosanct at the expense of others.
Jack,
It is an interesting problem. The U.S. Government has to honor all of its debt obligations, including mandatory programs’ trust fund reimbursements. Otherwise, serious credit financing problems will occur and likely derail the economy and perhaps many other economies of the world.
The most viable approach to handling the SSA trust funds is to adopt a plan similar to the NW Plan and restore positive cashflow for those two mandatory programs. Not excess positive cashflow, mind you, but slightly positive. Granted, that doesn’t resolve the problem with the SSA trust funds which would then continue to grow, earning more interest.
We would be having a slightly different conversation had all of the excess cashflow into the SSA trust funds (and other trust funds) been authorized to be put in open market publicly held U.S. Government debt. Perhaps the government wouldn’t have run up such large fiscal year deficits or approved the latest two rounds of tax cuts.
I don’t know the best answer for resolving the problem of the the growing SSA combined trust funds. It’s easy to say, as an example, that a payroll tax holiday would be a possible answer whether accomplished now or in the future. But that approach comes with its costs to fiscal year budgets for each year that such effort would be undertaken.
I am not in favor of refusing to honor the debt obligations sitting in the SSA trust funds. But a balancing act is needed to keep the fiscal year budgets afloat.
My biggest concern, as shared previously is this problem: The simple fact is that the operations of the U.S. Government will be fully supported by deficit financing no later than 2025 or 2027 other than revenues available to support mandatory programs and publicly held debt interest payment obligations; that fiscal situation is not sustainable.
I have tried to sort out the best way to handle the various trusts funds (SSA and others), but my ideas aren’t prime time thus far. Wish I was smarter.
Buff,
It has nothing to do with the quality of the individual employee’s work or that of the group as a whole. It has only to do with whether the work being performed is necessary to the function of government as its citizens have requiired. The supervisory pwesonnel have the responsibililty of assuring the quality of the work force. If someone is doing the job they are assigned to do and if that job is a necessary function of the organization, then why is that employee expected to work for less in order to reduce other citizens’ taxes. The first step in a budget analysis is to determine what functions need to be performed. The second step is to determine how to pay the cost of the performance.
It’s a cheap shot for a retired military man to suggest that if some group of workers doesn’t like having to accept lower pay so that the rest of us can escape the rising cost of government. If Obama wants workers to “share the sacrifice” he needs to ask that of all citizens not just federal employees
The only difficulty in meeting the debt obligations of the government is the reluctance of our representatives to ask all of its beneficiat]ries to bear the burden of the cost. I’m not referring to the Social Security beneficiaries, but instead to the beneficiaries of our government’s economic policies. The Bush tax cuts and the de-regulation of the finance industry have caused a significant skew to occur in the distribution of wealth in this country. As ye reap so shall ye sow? A bit of a reversal of the concept, but just as legitimate. Those who benefit the most owe the greatest share. Tax the wealthy as is required because that is where the ability to pay resides. Stop the reliance on exploited labor is the second, and the longer term, step to take in restoring the tax base. There is no secret to a healthier economy for the country, but it doesn’t suit our wealthiest citizens regardless of the largess that they enjoy as a result of government policy.
Jack,
We’re not operating a closed economy, so the impact of U.S. trade policy should also be on the table.
The goods-producing sector of the economy has been significantly impacted during this decade. The U.S. has lost over 40,000 production plants since 2001. Manufacturing employment declined by over 3.8 million between 2000 and 2008, and is presently down another 1.7 million. Similarly, the service-providing sector of the economy has been impacted, though to a lesser extent. As an example, information technology employment declined by 646,000 during the same period, and is presently down another 269,000.
Add in one of three economic development multipliers for the 5.5 million lost manufacturing jobs and related plant closures and we’re talking about collective community job losses on the order of 11 million, 16.5 million, or 22 million related to the manufacturing industry since 2000. Take your pick. Now, the R&D facilities are being relocated abroad along with higher technology production and a broader range of services not dependent on geographic presence needs. The floodgates are still down.
If we’re not going to address this problem, then we will continue down the path of reduced employment opportunities and, most likely, reduced tax revenues in comparison to what could have been provided. The service sector is not covering the gap for employment or tax revenue offset.