Sunday, November 14, 2010

Tough Love from the Debt Commission

Neal has a point. I've seen a lot of moaning about these recommendations from all over the political spectrum. Nancy Pelosi has said "This proposal is simply unacceptable" (of course!), and various right-wingers have denounced it as well. As a whole, it seems to me as sensible as a dictionary. Below I've listed a selection of their recommendations, all taken from here.

My favorite, other than taking the Office of Safe and Drug-Free Schools out behind the barn and killing it with an ax (that stuff is no dam bizniz of the feds anyhoo), is slashing our overseas military presence by one third. Why on Earth should the American taxpayer be providing a large portion of the national defense of big, strong, grown-up countries like Germany, South Korea, and Japan? Can't they tie their own shoes and wipe their own butts by now? Sheesh.

Unless we do something like what's on this list, we will soon be living illustrations of Maggie Thatcher's great aphorism, "The problem with socialism is sooner or later you run out of other people's money."

Social Security cuts:

  • Index the retirement age to longevity -- i.e., increase the retirement age to qualify for Social Security -- to age 69 by 2075.
  • Index Social Security yearly increases to a lower inflation rate, which will generally mean lower cost of living increases and less money per average recipient.
  • "Increase progressivity of benefit formula" -- i.e., reduce benefits by 2050 for middle, and, especially, higher earners, relative to current benefits.

Tax reform:

  • The co-chairs suggest capping both government expenditures and revenue at 21% of GDP eventually.
  • They suggest reducing the tax brackets to three personal brackets and one corporate rate while eliminated all credits and deductions. Without any credits or deductions (including the EITC and mortgage interest deductions), the 3 tax rates would be 8, 14 and 23 percent.
  • Eliminate the mortgage interest deduction.
  • All their proposals limit Congress to collecting taxes on income made within the United States, reducing or eliminating taxes on American expats and revenues companies earn abroad.
  • They also suggest raising the federal gas tax by 15 cents per gallon.

Medicaid/Medicare cuts

  • Force more low-income individuals into Medicaid managed care.
  • Increase Medicaid co-pays.
  • Accelerate already-planned cuts to Medicare Advantage and home health care programs.
  • Create a cap for Medicaid/Medicare growth that would force Congress and the President to increase premiums or co-pays or raise the Medicare eligibility age (among other options) if the system encounters cost overruns over the course of 5 years.

Discretionary spending cuts

  • Eliminate all earmarks.
  • Eliminate the Office of Safe and Drug-Free Schools.
  • Freeze federal worker wage increases through 2014; eliminate 200,000 federal jobs by 2020; and eliminate 250,000 federal non-defense contractor jobs by 2015.
  • Require the Smithsonian museums to start charging entrance fees and raise fees at the national parks.
  • Eliminate funding to the Corporation for Public Broadcasting.
  • Reduce farm subsidies by $3 billion per year.
  • Merge the Department of Commerce and the Small Business Administration and cut its budget by 10 percent.
  • Cut the State Department's overseas budget by 10 percent by 2015; reduce the proposed foreign aid budget by 10 percent in 2015; and cut voluntary contributions to the United Nations by 10 percent in 2015.
  • Eliminate the Overseas Private Investment Corporation, which provides subsidized financing and political risk insurance for U.S. companies' investments abroad.
  • Cut $900 million in fossil fuel research funds.
  • Force airlines to increase their contributions to airline security costs and allow them to increase per-ticket security fees.

Defense spending cuts:

  • Double the number of defense contractor positions scheduled for elimination from 10 percent of current staff augmentees to 20 percent.
  • Reduce procurement by 15 percent, or $20 billion.
  • Cancel or reduce various military vehicle or weapon programs now in development.
  • Reduce military forces in Europe and Asia by one-third.
  • Send all military children based in the U.S. to local schools.

The report also recommends tort reform as a way to reduce Medicare and Medicaid expenditure


Max said...

Many of these measures are incredibly overdue. I hope that at least some of them go through (excepting the tax increases, of course.)

There's hope for the country yet if it will do these things. All we need is to keep the wheels on for a couple more decades so that there's a civilization left for better ideas to permeate into.

pappy d said...

It's well-intended, but will it even cover the interest?

Let's not forget that more veterans are surviving their combat injuries & that's a long-term liability. Just who will replace the private contractors abroad if not government employees?

Lester Hunt said...

So ... we're doomed?

pappy d said...

Well, doomed to inflation or to pay all this money back to the banks.