Post by ShivaTD on Oct 11, 2013 15:59:19 GMT
Paul Ryan is still the head of the powerful House Budget Committee that is key to the budget issues for the US Government. As the Chairman the responsibility fell to Ryan to work with both the Democrats and Republicans to reach a budget compromise after the President released his 2014 Budget Proposal early this year. For about seven months Ryan failed to address a bi-partisan budget solution for the 2014 Federal Budget and has remained silent on the issue until this week.
On Tuesday Ryan finally broke his silence on the budget issues with an opinion piece in the Wall Street Journal. In it he addressed some hopes, some facts and some fantasies so we really need to look at what he said to sort out which is which.
First of all the House Budget Committee has never proposes any budget that would pay down the national debt since Ryan has been the Chairmen. In fact most of the House Budget legislation has contained roughly the same deficits for the next fiscal year that the Senate Democrats have proposed and any future deficit reductions were based upon mythical numbers.
Next is the fact that to even eliminate or reduce the deficits needs all spending, not just entitlements, has to be reviewed. The elephant in the living room remains the DOD budget when it comes to general expenditures of government and a "common-sense" approach would require reductions in the DOD budget that he fails to mention.
Yes, we need to address the tax codes. Currently workers that represent 90% of Americans are generally overtaxed while investors that represent the top 1% are under-taxed. We need to shift more of the tax burden to those that can actually afford to pay the tax.
This is false. President Obama has been willing to address the issue of both the debt ceiling and the deficits in the creation of the 2014 budget. In the meantime though he's stated repeatedly that we need a temporary "Continuous Resolution" (CR) to fund the federal government and a limited "Debt Ceiling" increase to allow for the negotiations on a 2014 Budget to go forward. The 2014 Budget needs to address the issues of deficits and debt reduction and not the CR or a limited increases in the national debt. The President and the Democrats in Congress have repeatedly stated they are willing to address both the deficits and national debt in negotiating a final 2014 Budget (that should have been accomplished by Sept 30th).
This is true but unfortunately the Republican controlled House Budget Committee didn't limit the budget legislation to compromises between Democrats and Republicans overall. In many cases the budget was completely unacceptable to the Democrats because Republicans failed to negotiate in good faith with the Democrats. The federal budget must be a grand compromise and not a single issue budget.
Yes, this is true but Paul Ryan leaves out a few facts. Social Security was a "pay as you go" welfare program prior to 1985 and it is correct that under President Reagan the retirement age was increased for some as well as the FICA/Payroll/Self-Employment taxes so that a surplus was created that eventually grew to over $3.5 trillion. This "over-taxation" was to ensure that those paying into the Social Security Trust fund would NOT have their benefits reduced in the future. Today Republicans are making proposals that would reduce benefits in the future for retirees while the current benefits are already dismal.
Social Security only provides an average benefit of $15,000/yr which is barely above the official poverty level and a large percentage of Social Security retirees have to file for additional "welfare" assistance because they don't have enough income to live on. About 30% of those collecting Social Security actually fall below the poverty level. Does it really make sense to cut Social Security benefits which only results in more retirees having to file for other welfare benefits? In truth we should actually raise Social Security benefits at the bottom end to reduce the need for additional welfare assistance.
Next is a simply fact that I've only recently come to understand. While people are "living longer" their bodies are still wearing out at the same age. If we take a laborer they're body still wears out by their 60's and they are physically unable to do the work that they could do when they were younger. Raising the retirement ages is not really a viable solution because the people really can't work more years before retirement because physically they're breaking down. The increase in life expectancy relates to very old age and not to when a person can reasonably be expected to work.
There are three possible solutions to Social Security but one is not based upon common-sense.
1) We could reduce benefits by reducing COLA and increasing retirement age but as a dismal welfare program this simply creates more poverty requiring more welfare assistance and requires workers to work beyond the reasonable age for retirement. This is not a common-sense solution.
2) We could dramatically increase revenue by removing the cap on Social Security taxes as well as imposing those taxes on all income regardless of whether it's earned or unearned income. This does not create any additional tax burden on 90% of Americans that earn less than the current cap and does impose taxation on those that can actually afford to pay more in taxes. It would allow current retirement ages and would provide sufficient revenues to retain or even increase Social Security benefits in the future. This could be called a "common-sense" solution by some because the problem with Social Security as a welfare program isn't a "spending" problem but instead it's a "revenue" problem.
3) We could "privatize" Social Security but that requires roughly a 40-45 year transition period and would also require about $40 trillion in new Social Security revenue to fund the transition. On the plus side is that in the end it would be less expensive than paying for Social Security with taxes forever that is estimated to cost about $75 trillion by 2085. There is a net savings of at least $35 trillion over roughly the next 70 years, it eliminates the most expensive welfare program we have, and it builds the personal wealth of 90% of Americans which will provide them with a retirement income that will not require "welfare" assistance. This solution is a forward thinking common-sense solution but few in Congress think beyond the next election.
A limited proposal related to US energy reserves but it fails upon review. If we were dealing with "supply and demand" in the United States for oil and natural gas then it makes sense but we're not. US oil and natural gas dealers are exporting our oil and natural gas where it enters the international markets and they buying it back at inflated prices making a profit on both transactions. OPEC (predominately Saudi Arabia) still controls international oil prices and is involved in "price fixing" that would be illegal under US anti-trust laws. The oil dealers are circumventing the US anti-trust laws so that they can profit from OPEC's price fixing. Without fixing the US anti-trust laws to prohibit this artificial inflation of our "energy" prices that benefit the energy traders the US doesn't benefit from increasing our own production.
We also need to address the environmental issues. Today we're using "fracking" to extract oil that was unobtainable previously. The problem is we're mixing very toxic chemicals in the fracking fluid that can contaminate our underground water supply. The destruction of the aquifer with toxic chemicals is completely unacceptable and the "fracking" mixture needs to be made safe so that this cannot happen.
Off-base here. What we need to do with our tax codes is to reduce the tax burden on low and middle income workers and transfer more of that tax burden to those with much higher incomes that can afford the taxation. Predominately this relates to wealthy investors that have less than 1/2 of the tax burden relative to income when compared to 90% of Americans that are working for a living.
For example, how many know that a working family with a net income of $75,000 is in the 15% income tax bracket and also generates 15.3% in FICA/Payroll/Self-employment taxes for a tax burden of about 30%. An investor with the identical net income of $75,000 has a 0% income tax rate and pays no FICA/Payroll/Self-Employment taxes. The worker has a 30% tax burden on income while the investor has a 0% tax burden on income. Republicans like Paul Ryan call that "fair" but I don't.
Yes we do but this is an issue for the 2014 Budget negotiations and should not be linked to a Continuous Resolution to fund government or to a limited increase in the national debt ceiling that will allow the time to negotiate the 2014 Budget.
We do need to address assistance to those in need and generally speaking that needs to be increased and not diminished. Far to many times people fall just outside of the "criteria" established but are actually in need. I've heard of people in the past that were forced into quitting their jobs just so Medicaid would provide vital health services and that's downright stupid.
Once again though this needs to be addressed in the 2014 Budget negotiations that should have been going on since President Obama submitted his budget request to Congress and where Republicans and Democrats in the House Budget Committee need to reach a compromise that is acceptable to both. In the meantime we need a CR exclusively to fund current government operations and a limited increase in the national debt ceiling to prevent the default of our government on Oct 17th.
online.wsj.com/article/SB10001424052702303442004579123943669167898.html
On Tuesday Ryan finally broke his silence on the budget issues with an opinion piece in the Wall Street Journal. In it he addressed some hopes, some facts and some fantasies so we really need to look at what he said to sort out which is which.
We have an opportunity here to pay down the national debt and jump-start the economy, if we start talking, and talking specifics, now. To break the deadlock, both sides should agree to common-sense reforms of the country's entitlement programs and tax code.
First of all the House Budget Committee has never proposes any budget that would pay down the national debt since Ryan has been the Chairmen. In fact most of the House Budget legislation has contained roughly the same deficits for the next fiscal year that the Senate Democrats have proposed and any future deficit reductions were based upon mythical numbers.
Next is the fact that to even eliminate or reduce the deficits needs all spending, not just entitlements, has to be reviewed. The elephant in the living room remains the DOD budget when it comes to general expenditures of government and a "common-sense" approach would require reductions in the DOD budget that he fails to mention.
Yes, we need to address the tax codes. Currently workers that represent 90% of Americans are generally overtaxed while investors that represent the top 1% are under-taxed. We need to shift more of the tax burden to those that can actually afford to pay the tax.
First, let's clear something up. The president says he "will not negotiate" on the debt ceiling. He claims that such negotiations would be unprecedented. But many presidents have negotiated on the debt ceiling—including him. In 1985, Ronald Reagan signed a debt-ceiling deal with congressional Democrats that set deficit caps.
This is false. President Obama has been willing to address the issue of both the debt ceiling and the deficits in the creation of the 2014 budget. In the meantime though he's stated repeatedly that we need a temporary "Continuous Resolution" (CR) to fund the federal government and a limited "Debt Ceiling" increase to allow for the negotiations on a 2014 Budget to go forward. The 2014 Budget needs to address the issues of deficits and debt reduction and not the CR or a limited increases in the national debt. The President and the Democrats in Congress have repeatedly stated they are willing to address both the deficits and national debt in negotiating a final 2014 Budget (that should have been accomplished by Sept 30th).
So the president has negotiated before, and he can do so now. In 2011, Oregon's Democratic Sen. Ron Wyden and I offered ideas to reform Medicare. We had different perspectives, but we also had mutual trust. Neither of us had to betray his principles; all we had to do was put prudence ahead of pride.
This is true but unfortunately the Republican controlled House Budget Committee didn't limit the budget legislation to compromises between Democrats and Republicans overall. In many cases the budget was completely unacceptable to the Democrats because Republicans failed to negotiate in good faith with the Democrats. The federal budget must be a grand compromise and not a single issue budget.
In 1982, Social Security's trustees warned Congress that the program would go bankrupt within a year. If it had, seniors would have seen an immediate cut in their benefits. Instead, Congress passed a package of reforms—the most important of which was an increase in the retirement age. Because Congress phased in this reform over time, there were no budget savings in the first five years. But through 2012, the savings were $100 billion. In the next 75 years, Social Security's actuaries expect that these reforms will save $4.6 trillion.
Yes, this is true but Paul Ryan leaves out a few facts. Social Security was a "pay as you go" welfare program prior to 1985 and it is correct that under President Reagan the retirement age was increased for some as well as the FICA/Payroll/Self-Employment taxes so that a surplus was created that eventually grew to over $3.5 trillion. This "over-taxation" was to ensure that those paying into the Social Security Trust fund would NOT have their benefits reduced in the future. Today Republicans are making proposals that would reduce benefits in the future for retirees while the current benefits are already dismal.
Social Security only provides an average benefit of $15,000/yr which is barely above the official poverty level and a large percentage of Social Security retirees have to file for additional "welfare" assistance because they don't have enough income to live on. About 30% of those collecting Social Security actually fall below the poverty level. Does it really make sense to cut Social Security benefits which only results in more retirees having to file for other welfare benefits? In truth we should actually raise Social Security benefits at the bottom end to reduce the need for additional welfare assistance.
Next is a simply fact that I've only recently come to understand. While people are "living longer" their bodies are still wearing out at the same age. If we take a laborer they're body still wears out by their 60's and they are physically unable to do the work that they could do when they were younger. Raising the retirement ages is not really a viable solution because the people really can't work more years before retirement because physically they're breaking down. The increase in life expectancy relates to very old age and not to when a person can reasonably be expected to work.
There are three possible solutions to Social Security but one is not based upon common-sense.
1) We could reduce benefits by reducing COLA and increasing retirement age but as a dismal welfare program this simply creates more poverty requiring more welfare assistance and requires workers to work beyond the reasonable age for retirement. This is not a common-sense solution.
2) We could dramatically increase revenue by removing the cap on Social Security taxes as well as imposing those taxes on all income regardless of whether it's earned or unearned income. This does not create any additional tax burden on 90% of Americans that earn less than the current cap and does impose taxation on those that can actually afford to pay more in taxes. It would allow current retirement ages and would provide sufficient revenues to retain or even increase Social Security benefits in the future. This could be called a "common-sense" solution by some because the problem with Social Security as a welfare program isn't a "spending" problem but instead it's a "revenue" problem.
3) We could "privatize" Social Security but that requires roughly a 40-45 year transition period and would also require about $40 trillion in new Social Security revenue to fund the transition. On the plus side is that in the end it would be less expensive than paying for Social Security with taxes forever that is estimated to cost about $75 trillion by 2085. There is a net savings of at least $35 trillion over roughly the next 70 years, it eliminates the most expensive welfare program we have, and it builds the personal wealth of 90% of Americans which will provide them with a retirement income that will not require "welfare" assistance. This solution is a forward thinking common-sense solution but few in Congress think beyond the next election.
We should also enact pro-growth reforms that put people back to work—like opening up America's vast energy reserves to development.
A limited proposal related to US energy reserves but it fails upon review. If we were dealing with "supply and demand" in the United States for oil and natural gas then it makes sense but we're not. US oil and natural gas dealers are exporting our oil and natural gas where it enters the international markets and they buying it back at inflated prices making a profit on both transactions. OPEC (predominately Saudi Arabia) still controls international oil prices and is involved in "price fixing" that would be illegal under US anti-trust laws. The oil dealers are circumventing the US anti-trust laws so that they can profit from OPEC's price fixing. Without fixing the US anti-trust laws to prohibit this artificial inflation of our "energy" prices that benefit the energy traders the US doesn't benefit from increasing our own production.
We also need to address the environmental issues. Today we're using "fracking" to extract oil that was unobtainable previously. The problem is we're mixing very toxic chemicals in the fracking fluid that can contaminate our underground water supply. The destruction of the aquifer with toxic chemicals is completely unacceptable and the "fracking" mixture needs to be made safe so that this cannot happen.
Rep. Dave Camp (R., Mich.) and Sen. Max Baucus (D., Mont.) have been working for more than a year now on a bipartisan plan to reform the tax code. They agree on the fundamental principles: Broaden the base, lower the rates and simplify the code.
Off-base here. What we need to do with our tax codes is to reduce the tax burden on low and middle income workers and transfer more of that tax burden to those with much higher incomes that can afford the taxation. Predominately this relates to wealthy investors that have less than 1/2 of the tax burden relative to income when compared to 90% of Americans that are working for a living.
For example, how many know that a working family with a net income of $75,000 is in the 15% income tax bracket and also generates 15.3% in FICA/Payroll/Self-employment taxes for a tax burden of about 30%. An investor with the identical net income of $75,000 has a 0% income tax rate and pays no FICA/Payroll/Self-Employment taxes. The worker has a 30% tax burden on income while the investor has a 0% tax burden on income. Republicans like Paul Ryan call that "fair" but I don't.
This isn't a grand bargain. For that, we need a complete rethinking of government's approach to helping the most vulnerable, and a complete rethinking of government's approach to health care. But right now, we need to find common ground. We need to open the federal government. We need to pay our bills today—and make sure we can pay our bills tomorrow. So let's negotiate an agreement to make modest reforms to entitlement programs and the tax code.
Yes we do but this is an issue for the 2014 Budget negotiations and should not be linked to a Continuous Resolution to fund government or to a limited increase in the national debt ceiling that will allow the time to negotiate the 2014 Budget.
We do need to address assistance to those in need and generally speaking that needs to be increased and not diminished. Far to many times people fall just outside of the "criteria" established but are actually in need. I've heard of people in the past that were forced into quitting their jobs just so Medicaid would provide vital health services and that's downright stupid.
Once again though this needs to be addressed in the 2014 Budget negotiations that should have been going on since President Obama submitted his budget request to Congress and where Republicans and Democrats in the House Budget Committee need to reach a compromise that is acceptable to both. In the meantime we need a CR exclusively to fund current government operations and a limited increase in the national debt ceiling to prevent the default of our government on Oct 17th.
online.wsj.com/article/SB10001424052702303442004579123943669167898.html
