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— OP-ED by Kate Marshall, NV State Treasurer
State governments have to match their revenues to their expenditures. Here in Nevada, bringing the budget in line required state legislators to make decisions regarding both increases in revenues and decreases in spending, choices that were all the more difficult because Nevada’s economy has been in a deep recession.
The federal government, however, has not had to make these choices. A decade ago, the Bush administration pushed for big tax cuts without making deep cuts in expenditures, even while fighting two wars. These tax cuts turned record budget surpluses into dramatic deficits, which became even larger due to the national recession. These cuts also created a tax structure that was particularly unfair for the middle class.
The Bush tax cuts set a rate of 15 percent for capital gains, so income earned from labor is now taxed at a higher rate for most taxpayers. Add in other tax credits and deductions, plus the fact that most federal payroll taxes are capped once you earn more than $106,800, and it is no surprise that many millionaires and billionaires have a lower tax rate than people who work for a living.
Last week, Senate Republicans blocked a change to this rule, but we can’t give up.
This piece of legislation was meant to even the playing field and have everyone pay their fair share. Simply put: “If you make more than $1 million a year, you should pay at least the same percentage of taxes on your income as middle class families do.” The move to block this legislation was very telling of where the real priorities of the GOP lie.
According to a recent report by the Congressional Research Service, about 25 percent of families earning more than a million dollars per year pay federal taxes at a lower rate than some middle-income taxpayers. This is predominantly due to the special treatment of investment income and the reduced impact of payroll taxes on high earners. Closing these loopholes would raise approximately $160 billion under current law.
Warren Buffett supports it, as do many other successful Americans. They know that if people like Buffett keep getting a tax break they don’t really need and that the country can’t afford, it either adds to the deficit or someone else is going to have to pay for it. That someone else is likely the middle class.
If we want to start reducing the deficit, we need to start dealing with the decline in real per-capita federal revenues, and we should do this fairly. As President Obama has said, “This is simple math. The Buffett Rule is one step among many we need to keep investing in prosperity for all Americans without increasing the deficit.”
Congress is going to have to make a lot of difficult decisions in the coming year, decisions like those our state Legislature has made in recent years. They will need to look at both sides of the ledger if they are going to put this country on a financially sustainable path, particularly since we cannot create jobs and grow our economy if we gut our public infrastructure investment. Passing the Buffett Rule to close this tax loophole is a small step, but it’s a small step in the right direction.
Version 2 of Representative Ryan’s “Path to Prosperity” (in reality, a path to Poverty for many), is due out today. Believing that the attacks against last year’s Path have failed, they’ve decided to double-down and go after the prize of privatization of Medicare and Social Security in this year’s budget as well. In his op-ed about the impending release of his budget, Rep. Ryan stated
“Like last year, our budget delivers real spending discipline. It does this not through indiscriminate cuts that endanger our military, but by ending the epidemic of crony politics and government overreach that has weakened confidence in the nation’s institutions and its economy. And it strengthens the safety net by returning power to the states, which are in the best position to tailor assistance to their specific populations.
Our budget’s Medicare reforms make no changes for those in or near retirement. For those who will retire a decade from now, our plan provides guaranteed coverage options financed by a premium-support payment. And this year, our budget adds even more choices for seniors, including a traditional fee-for-service Medicare option.
We also introduce a competitive-bidding process to determine the growth of government’s financial contribution to Medicare. Forcing health plans to compete against each other is the best way to achieve high-quality coverage at the lowest cost, and implementing these reforms in Medicare can have the effect of lowering health-care costs for everyone. This is the key to increasing access and affordability while preventing government debt from threatening the health security of seniors and the economic security of all Americans.”
Ryan’s new version of the “Plan” is purported to include a Ryan-Wyden “bipartisan plan” to strengthen medicare and expand health care choices for all. That’s pure bull-puckey if you ask me. They may be wrapping it up in prettier packaging, but it’s still a plan to privatize Medicare by gifting it to the Insurance industry and providing vouchers to seniors that will have ever-declining values. Now if you ask me … that promotes health care rationing as aging seniors would no longer be able to afford effective health care.
The “Plan” continues to promote no changes for those in or near retirement. Americans currently over the age of 55 would see no changes to the structure of their benefits, although they would be “free to opt into a private plan” once the new Medicare Exchange was established in 2022. That’s the point at which Medicare would begin offering seniors a choice among Medicare-approved private plans competing alongside a traditional Medicare plan on a Medicare Exchange.
All of us have paid in throughout our working careers, both poor and rich. Many of us have planned for retirement based on certain assumptions … well I guess Ryan’s plan is reminding us about that old adage about “ass u me.” Supposedly, the “Plan” would provide more help for those who “need” it and less help for those who don’t. Personally, I want to see just exactly how Mr. Ryan proposes to define those who “don’t.”
Ryan’s “Plan” would purportedly repeal or defund the Independent Payment Advisory Board which was created by the Patient Protection and Affordable Care Act (“Obamacare”). This is the board that is supposed to analyze the effectiveness of health care practices and make recommendations to Congress for improvements in Medicare. The GOP would have you believe that the IPAB is nothing more than a “death panel.” They’re wrong, this panel assures you are receiving effective care, not just the cheapest service they can provide. It’s mandate is to assure that ineffective practices and medications are set aside and more effective treatments are used instead. By eliminating this board and relying on Insurance companies to dictate what type of treatment or medication they’re willing to fund, seniors will get less effective health care. Thus, the Ryan Plan promotes insurance company death panel strategies.
We know what the President has proposed. Ryan’s budget is expected out at 10AM this morning. Like version 1, it’s been reported that it won’t increase any revenues and proposes further tax cuts for individuals as well as corporations, taking the tax code down to two rates: 15% and 25%. But this far, he’s not indicated any income levels associated with those rates.
Ryan claims his new budget is “revenue neutral” as he’s proposing to close a few loopholes, but he has yet to identify which loopholes and who would be affected. You can expect to see extremely low spending on education, infrastructure, and research. I certainly hope that seriously deficient bridge you drive across each day to get to your workplace doesn’t decide to fall into the river or some abyss anytime soon, because the GOP doesn’t understand the need for maintenance and replacement.
I look forward to being able to peruse the numbers, specifically military spending which consumes a huge portion of the federal budget. Purportedly, he’s treated that as a seriously sacred cow and has not cut a single penny. I want to see if that’s true, or worse, if he’s actually proposing to increase spending for weapons and war as he did in version 1.
Regardless, Ryan’s approach won’t be balancing the budget or closing the deficit anytime soon.
Washington, D.C. – Democratic Leader Nancy Pelosi wrote a letter today to Senator Patty Murray and Congressman Jeb Hensarling, Co-Chairs of the Joint Select Committee on Deficit Reduction (JSC), including the recommendations of 16 Democratic Ranking Members of House Committees to the JSC that represent options for job creation, revenue and savings within the jurisdiction of each Committee. While the Budget Control Act directed that each House Committee make recommendations for changes in the law to reduce the deficit, Republican Chairmen, in most cases, declined to hold committee hearings or to develop recommendations with the Democratic members.
As Leader Pelosi writes in the letter:
“…The House Democratic Caucus is firmly committed to a deficit reduction plan that is big, bold, and balanced…
“Democrats strongly believe that economic growth is an integral component of such a proposal, because creating jobs is the most effective way to reduce the deficit. We call upon the JSC to promote the entrepreneurial spirit of America by making a top priority the creation and expansion of small businesses, which serve as the main generator of jobs…”
Here’s the full text of Leader Pelosi’s letter:
October 13, 2011
The Honorable Patty Murray
The Honorable Jeb Hensarling
Joint Select Committee on Deficit Reduction
Congress of the United States
Washington, D.C. 20515
Dear Senator Murray and Representative Hensarling:
On August 2, 2011, President Obama signed into law the Budget Control Act of 2011, which will ensure at least $2.4 trillion dollars in deficit reduction. Passage of that Act implemented the first $1.2 trillion in spending reductions. A second $1.2 trillion will be achieved either through the actions of the Joint Select Committee on Deficit Reduction (JSC) or through sequestration. The House Democratic Caucus supports even larger deficit reduction.
The House Democratic Caucus is firmly committed to a deficit reduction plan that is big, bold, and balanced. Respected economists and other budget experts agree that a fair mixture of growth, savings, and revenues is needed, with everyone contributing their fair share. Such a balanced approach presents the best chance for bipartisan support within the Congress. The American people overwhelmingly agree that significant revenues must be included in any plan and support a balanced approach.
Democrats strongly believe that economic growth is an integral component of such a proposal, because creating jobs is the most effective way to reduce the deficit. We call upon the JSC to promote the entrepreneurial spirit of America by making a top priority the creation and expansion of small businesses, which serve as the main generator of jobs.
Section 401(b)(3)(A)(ii) of the Budget Control Act directed that
Not later than October 14, 2011, each committee of the House of Representatives and the Senate may transmit to the joint committee its recommendations for changes in law to reduce the deficit consistent with the goal described in paragraph (2) for the joint committee’s consideration.
Each Ranking Member of a standing Committee of the House was requested by the Democratic Leadership to work cooperatively with the Committee Chairman and majority members to develop bipartisan recommendations, as directed in the statute. In most cases, however, the Republican Chairman declined to hold Committee hearings or to develop recommendations with the Democratic members.
In order to provide you and the other members of the JSC with the advice of knowledgeable Committee members, our Democratic Ranking Members have developed recommendations that represent options for savings within the jurisdiction of each Committee. These suggestions are being transmitted to you today for your consideration.
Our proposals to promote the creation and expansion of small businesses are the centerpiece of Democratic recommendations to the JSC. It is essential that the Congress support initiatives that facilitate the access of small businesses to the credit, loans, and favorable tax treatment that will enable them to expand and create jobs. In particular, we strongly encourage the JSC to thoroughly consider the American Jobs Act, proposed by President Obama, which includes numerous provisions to help small businesses thrive so they can grow and hire. During the Democratic control of the House, we passed more than two dozen initiatives to promote small businesses, which are responsible for nearly 70 percent of job creation and are the drivers of the economy. We must build on that record.
All areas of the budget should be subject to consideration in developing a balanced approach to deficit reduction, and a fair and substantial revenue component is both essential and overwhelmingly supported by the American people on a bipartisan basis. Working together, I am confident we can find a basis for a big, bold, and balanced solution that ensures that America remains Number One in the world.
An important first step would be to comply with Rule V concerning “Public Access and Transparency,” so that the meetings and discussions of the Select Committee are conducted in open session. The Committee should schedule a public hearing to receive testimony from respected and bipartisan proponents of big, bold, and balanced deficit reduction, including Senator Alan Simpson and Hon. Erskine Bowles, Alice Rivlin, and Senator Pete Domenici, and the “Gang of Six” current Senators. The Committee also should schedule a public hearing at which Chairmen and Ranking Members could present their proposals for achieving responsible and balanced deficit reduction, including those contained in the letters sent today by our Ranking Members.
Thank you for your service on the Joint Select Committee and to our Nation.
Letters from Democratic Ranking Members:
- Committee on Appropriations: Letter from Ranking Member Norm Dicks»
- Committee of Armed Services: Letter from Ranking Member Adam Smith»
- Committee on Education and the Workforce: Letter from Ranking Member George Miller»
- Committee on Energy and Commerce: Letter from Ranking Member Henry A. Waxman»
- Committee on Financial Services: Letter from Ranking Member Barney Frank»
- Committee on Foreign Affairs: Letter from Ranking Member Howard Berman»
- Committee on Homeland Security: Letter from Ranking Member Bennie G. Thompson»
- Committee on House Administration: Letter from Ranking Member Robert A. Brady»
- Permanent Select Committee on Intelligence: Letter from Ranking Member C.A. Dutch Ruppersberger»
- Committee on the Judiciary: Letter from Ranking Member John Conyers»
- Committee on Natural Resources: Letter from Ranking Member Ed Markey»
- Committee on Oversight and Government Reform: Letter from Ranking Member Elijah E. Cummings»
- Committee on Science, Space and Technology: Letter from Ranking Member Eddie Bernice Johnson»
- Committee on Small Business: Letter from Ranking Member Nydia M. Velazquez»
- Committee on Transportation and Infrastructure: Letter from Ranking Member Nick J. Rahall»
- Committee on Ways and Means: Letter from Ranking Member Sander Levin»