Deficit Panel's Recommended Cuts

[charrison]

I call it a good start.

 

[Elias824]

This will go nowhere, neither side is going to want to give up the stuff that helps their voting base. Asking the republicans to cut military spending and asking the democrats to reform social security, its like asking you to chop off your own arm.

 

[PJABBER]

It's a start. Quite few good ideas, some that will be acceptable if everyone understands that it is going to take more than window dressing to roll back the size of government.

 

[dyna]

I have a mortgage and I have kids, so it will negatively impact me, so I don't like it. But I am accepting of it, if it will actually reduce the deficit. I don't think those cuts should be the first to go, the first thing that needs to go are all the spending plans introduced this year and then they dig deep into the benefits that we take for granted. It is frustrating to me that healthcare and cash for clunkers(stimulus) were passed and they consider these things as ways to pay for it.

 

[Darwin333]

people that old aren't in competition for the jobs people our age are getting.

So, umm, where are they going to work? I am all for balancing the budget too (hell, I would be happy to get back to Bush era deficits at this point) and it must start with entitlements due to simple math but simply saying "fuck those old bastards, let em starve" doesn't work.

Hungry people are really really bad for a civilized society....

 

[sunzt]

I have a mortgage and I have kids, so it will negatively impact me, so I don't like it. But I am accepting of it, if it will actually reduce the deficit. I don't think those cuts should be the first to go, the first thing that needs to go are all the spending plans introduced this year and then they dig deep into the benefits that we take for granted. It is frustrating to me that healthcare and cash for clunkers(stimulus) were passed and they consider these things as ways to pay for it.

Is your mortgage over 500k?

 

[Darwin333]

I have a mortgage and I have kids, so it will negatively impact me, so I don't like it. But I am accepting of it, if it will actually reduce the deficit. I don't think those cuts should be the first to go, the first thing that needs to go are all the spending plans introduced this year and then they dig deep into the benefits that we take for granted. It is frustrating to me that healthcare and cash for clunkers(stimulus) were passed and they consider these things as ways to pay for it.

I agree with your sentiment but if we are going to truly balance the budget we all need to have an attitude like yours. IMO, It will make it much easier for the public to swallow if a comprehensive plan in which everyone feels the pain at the same time was implemented. No one is going to really like it but if the politicians do their job properly and explain that we are all in this together and we must all make sacrifices to right the ship AND then they actually do it (without letting their favorite groups off the hook) they might be able to pull it off.

In instead they try to piecemeal it, like ending the mortgage deduction first or reducing social security payments first and then talking about the other issues, people are going to feel singled out and get insanely pissed. The message needs to be very clear that we are all in this together and that together we must make some sacrifices so that our children are not forced to make much greater sacrifices in the future. That message *might* stand a chance, anything else will be a failure.

Of course that isn't what will happen up there in Washington. We might get a bill or two that are knowingly DOA so that a few can say they did something and if we are real lucky we might get a 20% reduction in the deficit (down to only a trillion a year!!!!) in which they will scream from the heavens that they successfully reduced the deficit.

Hell, I will be extremely happy if the only thing they do is stop the banksters from continuing to rape us and demand that the criminal activity from the last few years be investigated and criminally prosecuted. I doubt that this will happen either, instead they will have us bickering amongst ourselves over new bullshit "reforms" while they fail to enforce existing black letter law that everyone of us must follow. You know, those little obscure laws like fraud, bribery, perjury, etc...

 

[Exterous]

The biggest pills for the Republicans to swallow is cuts in agriculture subsidies and defense spending. I, therefore, predict it not passing the House as presented.

Well, the biggest one for the Democrats is raising the Social Security age so they wouldn't vote for it either

 

[GuitarDaddy]

Well, the biggest one for the Democrats is raising the Social Security age so they wouldn't vote for it either

??? What makes you think Dems are the biggest defenders of SS? Try cutting bennies or raising the retirement age and see who screams the loudest:awe: There are far more Repubs drawing SS than Dems.


Thats what makes this debate so hilarious! The republicans scream cut spending, cut entitlements, we are the party of fiscal conservatives
When in reality the three fiscal black holes in our economy Military spending, SS, and Medicare are all feircely protected by the republicans because their elderly gun toting voting base are the major supporters and benificiaries of them.

 

[CADsortaGUY]

Agriculture subsidies are a cornerstone of Republican politics; one of their sacred cows that dare not be cut.

Wrong. However, a freer market must be in place before you cut the subsidies. The gov't has meddled so much in Ag that without subsidies, no one would do it. Get the gov't out, and then start systematically reducing the subsidies as the free market takes hold.

.... oh wait... leftists won't go for that...

 

[zsdersw]

Wrong.

Not really. Agriculture subsidies are more popular among Republicans (as in, more than 50% of Republicans support them) than they should be.

 

[EagleKeeper]

Can't wait to se the unintended consequences. Alot of people will loose their job which means they are no longer participating in the economy. Whcih means more jobs will be lost due to it. Can't wait to see what other unintended consequences there are.

What is another 2-3% increase in unemploment.:\
They can sit on their tails for 2 years until the economy rebounds. And if needed; money will then be alocated for another year or two.:hmm:

They have skills, the demand for those skills can exist in the civilian market; there just needs to be a demand for the civilian products.

 

[Exterous]

??? What makes you think Dems are the biggest defenders of SS? Try cutting bennies or raising the retirement age and see who screams the loudest:awe:

:hmm: According to the many political ads I saw around here the Dems were screaming bloody murder about a Rep who wanted to raise the retirement age (maybe it was just SS reform - I can't remember the exact details). I easily saw two a night about how he hated seniors and if you cared about your elders and SS you should vote Democratic in the upcoming election

 

[IndyColtsFan]

One of the best bits is finally taxing capital gains at least as earned income.

I agree with this sentiment 100%.

 

[IndyColtsFan]

I dont know a single middle class person with a 500k+ mortgage. You have to remember when thinking that New York, San Fran, LA cannot influence your decisions. They are not the norms they are the fringe.

My mortgage is $185k and im middle class. 3 bedroom, 2.5 bath, 2 car garage etc.

I'd have to disagree. Even here, in one of the cheapest real estate markets in the nation, upper middle class people can afford a $500K home. My friend and his wife bought one in that price range and my wife and I could have, but decided not to do so.

I'd guess that most rich people don't have mortgages, but maybe I'm wrong.

 

[Elfear]

It doesn't go far enough at cutting spending. How about raising the retirement age to 75-76? They should cut benefits for people already receiving them and under 75 to 1/3-2/5 of what they are now, and cut people over 75 to 7/8.

Ya, let's just keeping them working until they die. I think the retirement age needs to be raised so that SS might have a chance of being brought under control, but come on, 75-76?

a 100B defense budget cut is weak. They should reduce is to 1/6 of what it is currently.

1/6?? I'm not sure if you're just trying to get a rise out of people or if you really think that would work.

They should also lay off at least 25% of the Federal workforce and cut existing salaries by 25%. These damn people are supposed to civil servants, not kings.

It's true. I know I live like royalty on my federal salary. People waiting around to wipe my nose for me. Couple Bentley's in the garage. Trust fund set up for my great great grandchildren. Something like that.

When I took a job with the government, I started off making 25% less than the rest of my graduating class. That is true of many people who decide to work for the government. More job security but worse pay. Now you want to cut federal employees' salaries by 25%?

 

[MooseNSquirrel]

Wrong. However, a freer market must be in place before you cut the subsidies. The gov't has meddled so much in Ag that without subsidies, no one would do it. Get the gov't out, and then start systematically reducing the subsidies as the free market takes hold.

.... oh wait... leftists won't go for that...

Huh?

 

[dank69]

Huh?

Don't mind him, he just makes shit up as he goes along.

 

[Brovane]

:hmm: According to the many political ads I saw around here the Dems were screaming bloody murder about a Rep who wanted to raise the retirement age (maybe it was just SS reform - I can't remember the exact details). I easily saw two a night about how he hated seniors and if you cared about your elders and SS you should vote Democratic in the upcoming election

It is especially interesting because the retirement age increases kick in decades from now.

 

[rudeguy]

how much would it save if we got rid of the nickel and the penny? Now THAT is a change we can believe in!

Nothing in there is too bad except the Social Security thing. Why not just do away with it?

 

[Brovane]

Doing away with the 13% tax break that all people making over $106800 would fix the problem with social security forever.

You have to remember that increase in benefits also stop for salary beyond $106800. For example the initial SS benefit is based on what you where making when you retired. However for anything beyond 106,800 you do not get any additional benefit. So someone whose final pay before retirement was $110k will get the same benefit as someone making $150k. Usually the proposals that I see about elmininating this cap don't seem to mention anything about also increasing the benefits for the higher pay. I suspect that people wan't the money but still want to keep the maximum benefit capped.

 

[Brovane]

how much would it save if we got rid of the nickel and the penny? Now THAT is a change we can believe in!

Nothing in there is too bad except the Social Security thing. Why not just do away with it?

Come up with a proposal to get rid of it? Basically because it is a pay as you go system so people currently retired depend on us paying into it. It wouldn't be right to yank away benefits for people currently retired or about to retire it. Basically I don't see a way to fairly eliminate it. Actually the SS system is fairly sound. Really a few minor adjustments will fix it. We don't have to go all the way and eliminate it.

 

[shira]

Does anyone really think that Republicans are going to agree to replacing the 15% maximum tax the rich currently pay on capital gains with the top-bracket income tax rate?

If you look at the proposed set of cuts, they disproportionately affect the middle and lower classes. And those are the cuts the right will go for; not the cuts that affect the rich. For example, what percentage of retirement income comes from Social Security for the poor and middle classes? Now compare that with the percentage that applies to the rich. Guess which cuts the Repubs will advocate?

In other words, a balanced budget is going to be funded on the backs of everyone EXCEPT for the rich.

 

[Fern]

I agree with this sentiment 100%

It's got excellent bits and disastrous bits. That's a dangerous combination.

One of the best bits is finally taxing capital gains at least as earned income.

Taxing all capital gains at regular rates is an incredibly stupid idea.

It can only be supported by those lacking all understanding of finance.

As it stands now, those holding capital assets for a long period are already paying tax on nothing but inflation. (Unlike other countries, the USA does not take inflation into account when determining the profit on an asset sale).

Taxing inflation makes no sense, it's stupid. You end up with a huge disincentive for people to buy and hold long term such things as commercial buildings and other productive hard assets. WTH is the point in doing that?

OTOH, I see no real reason that dividends should be taxed at those lower rates.

Some may argue that stock options should be taxed like earned income. After all, it is a form of salary. But I'll remind people that stock options are already taxed as earned income. This means that the exec pay's tax on it like salary, but the corporation granting the options gets a deduction as if the options were salary too. I.e., it's a net zero for the USA (income for exec - minus deduction for company = zero).

There are stock options that qualify for special long term cap gains tax rates if the holding period is met. However, if so the company gets NO deduction whatsoever. This means the USA comes out ahead - there is taxable income but no corresponding deduction for the company.

Another more reasonable change might be to have different rates for how long the asset has been held. An asset held for a year and a day certainly has very little inflation in it compared to someone who has held their asset for 20 yrs or more. In this case the 1 yr holding period seems too short to earn special low rates.

Another thing, many do not realize it but much LTCG is already taxed at regular rates. All the LTCG on stocks etc held in retirement accounts such as IRA's and 401(k) accounts ARE taxed at regular rates upon withdrawal. People who use their retirement acounts as investment vehicles never benefit from the LTCG rates. Investing through your retirement account just converts LTCG into regular income.
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It's dissapointing to see this commission completely miss the 'low hanging fruit'. Why they do not recommend dropping the special (low) tax rates for fund managers is just mind-blowing. These people make $100's of millions a year.

They also do not mention dropping the mortgage interest deduction for a second home. WTH? To profess concern about rich people getting a deduction for a lavish home then turn around and permit them to deduct for a second ($500K) home is hypocritical and stupid.

Stupid is as stupid does. And there's far too much 'stupid' in Washington DC.

Fern

 

[IHateMyJob2004]

It's got excellent bits and disastrous bits. That's a dangerous combination.

One of the best bits is finally taxing capital gains at least as earned income.

Depends on the implementation of those taxes. I pray it is not going to turn into some marked to market crap.