Cutting the Deficit
http://thedianerehmshow.org/shows/2010-11-17/cutting-deficit
A new report by panel of Democrats, Republicans, economists and other experts calls for a complete overhaul of the U.S. tax code. It comes on the heels of another proposal by the leaders of a bipartisan commission. We compare recommendations from two deficit-reduction panels and other ways to cut the nation's debt.
Guests
Damian Paletta
reporter, The Wall Street Journal.
Daniel Glickman
senior fellow, Bipartisan Policy Center; former secretary of agriculture.
Jim Horney
director of federal fiscal policy, Center on Budget and Policy Priorities
Vin Weber
Republican consultant, former member of Congress representing Minnesota's 2nd district (1981-93)
Comments
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On the one hand.... Social Security and Medicare are in trouble.
On the other hand.... Let's suspend payroll taxes that fund Social Security and Medicare.
Please explain!
There is no Social Security crisis.
Per capita GDP has grown steadily, so why so much talk of cutting Social Security? Social Security can be funded, just not as it has been. Middle class incomes have been flat in inflation adjusted terms for decades. Middle class Americans have given up enough. The wealthy and corporations who have done so well in recent decades should contribute more.
Why is this never discused in the media?
One of the guests mentioned that the bulk of debt is owned by foreigners. The last data I saw on this was from 2008, but at that time almost half of the U.S. government debt was owned by other U.S. government agencies. About one quarter was owned by foreign entities.
I don't know if many people have done this. But I never planned on using Social Security at all. I'm 57 years old and retired from the U.S. Navy. I have rental properties and am fairly comfortable while supporting my older brother.
I am tired of hearing the whining in this richest nation in the history of civilization. Let's be honest, selfless, and thrifty and follow the recommendations of the wise people on the deficit reduction panel. I'm sick of commentators - and you're all guilty - of presuming to represent the population in these matters.
We should be careful, but we should be decisive and everyone should be squeezed a little and that's all the recommendations do, squeeze everyone a little - except perhaps our representatives in WDC.
Less whining, more action.
I believe SS was never intended for those who can do for themselves, but over the years, we've included anyone and everyone in the handout. We should reserve SS for those in need, and perhaps those in relative need.
Why is the plan cutting taxes for the wealthy, limiting the amount of income that the govt can collect and slashing everything that helps the middle class and poor? Why not raise capital gains tax? Why not end foreign wars of choice and foreign aid? I say lets end farm subsidies, if the Repubs want no govt, then lets look at things we should be able to agree on if they are serious. By the way, no Republican presidents have lower the deficit in decades, why not call them out on this?
Actually, SS was never intended to be means tested. And SS is not in trouble, Congress needs to return everything it has borrowed from SS and put it into the lockbox that Al Gore wanted. If they could remove the ceiling from income for SS and add Capital Gains, treating this income as normal income, SS wouldn't be in any trouble.
How will this affect future generations? If people in their 40's and 50's are worried what about people in their 20's and 30's?
Sorry, maybe I'm missing something, but if you are retired from the military and have a pension, then of course you wouldn't be using SS. The only SS you would have paid into are for private sector jobs you have held, which I imagine isn't much since you were a career military man. That being said, I thank you for your service and agree that you deserve the pension you should receive, I am just confused by your comment.
How about the fact that in 2008 almost 45% ($280 Billion) of the DoD budget was devoted to cost overruns on procurement (weapons systems)? Can't we address that rather than these itty bitty cuts of $5 and $10 Billion?
Proof that both parties are controlled by a single financial oligarchy is that the single best solution is missing from the national discussion. A tax on all financial market transactions would raise nearly one trillion in the first year, because of the sheer volume of trading. In the 1960s, there was about $1.50 for each dollar of GDP. Now, there is over sixty dollars of financial trading for each dollar of GDP. This huge volume of trading allows the financial system to drain at least a trillion dollars a year from the rest of the economy through commissions, fees, and other charges. The need to increase the volume of financial trading was the basic driver of securitization of home mortgages, and the development and proliferation of financial derivatives. This is nothing less than a plague of usury of Biblical proportions. Yet none of the "experts" including the guests today, will even discuss this plague. But until the financial system is cut down to size, there can NOT be any economic recovery for the rest of us. It is basic economics that when you have too much of socially destructive activity, you should tax it - heavily.
I appreciate the Diane Rehm show so much, and enjoy Katty sitting in when she does, but when we hear the Republican drumbeat ALL during the campaign and on the airwaves every day and night regarding the deficit (the Republicans know it is the attention getter right now -- unpatriotic if you criticized it or mentioned it during the Bush era), when the "American People" voted for those candidates who would work on creating jobs, jobs, jobs - NOT THE DEFICIT. Where are the jobs? Please work on the economy to create more jobs.
Joyce,
Good question. The BPC plan would credit the trust funds as if the taxes had been collected. If the stimulus is successful in boosting employment, the trust funds will be in better shape than they would be under current law.
Everyone else, please read the plan before jumping to conclusions. The tax plan is progressive. Low-income people bear no additional burden (on average), while middle and upper income people pay more in proportion to their incomes. There are significant cuts in all forms of spending, but there's also recognition that many government services are essential. That is, it's not just a slash and burn. The tax system would represent a radical simplification, and cut rates to their lowest level since before World War II, while raising enough revenue to pay for government.
There are parts that are very painful, but doing nothing and letting the economy crash and burn under a crippling debt load would be a far worse option, regardless of your politics.
The deficit, future national debt, and how to "fix it" was studied in depth by Dr. Larry Kotlikoff several years ago before the subject became a hot item. He recommended a version of a federal sales tax, but this is not the same thing as a VAT or the Fair Tax. You might want to give him a call or look up his book: The Coming Generational Storm, by Laurence J. Kotlikoff and Scott Burns, MIT Press.
We agree that reducing the national debt is important to the safety, security and long-term viability of our economy. A discriminatory tax on soft drinks and other sugar-sweetened beverages, however, is an overly-simplistic and misguided approach to accomplishing this goal.
Americans are sending a resounding message against discriminatory taxes on beverages. It’s clear they feel they are able to make their own decisions about what to eat or drink without government help.
Washington state’s soda tax was overwhelming repealed by voters earlier this month. The Governor of New York’s proposed tax on beverages died in the legislature two years in a row due to strong opposition by New Yorkers. And in 2008, a similar tax was overwhelmingly repealed by voters in Maine.
The bottom line is that taxes do not make people healthier. Making smart, educated decisions about diet and exercise do that.
For more information, please visit www.ameribev.org.
-- American Beverage Association
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