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cswake
11-10-2010, 12:23 PM
"OFFICIAL" Draft Slides from the Debt Commission Proposal:
http://documents.nytimes.com/draft-proposal-from-the-national-commission-on-fiscal-responsibility-and-reform?ref=politics#p=1

Website for the Debt Commission
http://www.fiscalcommission.gov/news/cochairs-proposal

Components of the report are starting to leak out from various places:
http://www.theatlantic.com/business/archive/2010/11/just-in-time-for-the-holidays-an-avalanche-of-debt-reports/66358/
http://www.huffingtonpost.com/2010/11/10/debt-commission-report-social-security-medicare-_n_781606.html
http://www.washingtonpost.com/wp-dyn/content/article/2010/11/10/AR2010111003300.html?hpid=topnews
http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=ajXqHH3ZYLvo
http://www.nytimes.com/2010/11/11/us/politics/11fiscal.html

Here's a nice summary of the big items, with my highlight:
http://www.usatoday.com/news/washington/2010-11-10-federal-savings-social-security_N.htm

Highlights of the plan include:

•Future changes to Social Security designed to ensure its solvency for 75 years, rather than 27 years as currently designed. Wealthier recipients would get less in benefits, wealthier workers would pay more in payroll taxes, and the retirement age would be raised to 69 by 2075.

To make the plan more palatable, a new special minimum benefit would be added to keep minimum-wage workers who completed their careers above the poverty threshold in retirement.

•Eliminating more than $1 trillion in tax breaks and subsidies. This would contribute to deficit reduction while also enabling lawmakers to lower some tax rates and simplify the tax code.

Under one option, the top rate for individuals could be cut from 35% to 28%, and to 26% for corporations. The alternative minimum tax, used to ensure that upper-income taxpayers don't avoid taxes completely, would be eliminated. The federal gas tax, now 18.4 cents a gallon, would be increased gradually by 15 cents.

•About $200 billion in annual spending reductions, equally divided between defense and domestic programs. Weapons systems would be cut, earmarks for parochial projects eliminated, and the federal workforce would forfeit jobs, pay levels and benefits.

Spending would be capped in 2012 at this year's levels, then reduced 1% a year through 2015 before being indexed to inflation.

Other savings include reductions in health care payments to doctors, lawyers, drug companies and others. Patients would pay slightly more in deductibles and copayments.

Farm subsidies would be slashed by $3 billion a year. Interest costs would be slashed by $673 billion over the decade.

Savings would grow over time, from $69 billion in 2012 to $372 billion in 2015 and $761 billion in 2020. Taken together, the proposals would reduce the debt to 60% of the nation's economy, considered an acceptable level, by 2024. By 2037, the budget would be balanced.

Or in other words, this "crazy proposal" suggests a series of changes that still result in the ~$14 trillion debt growing for another 27 years. (Side note: If they think this is crazy, I cannot wait for the response when Rand shows what it takes to balance our budget in 1 year!)

Austrian Econ Disciple
11-10-2010, 12:30 PM
LMAO 27 years to balance the budget. These guys must be goddamn fucking stupid. Any plan that says budget will be balanced in 27 years is STUPID. You don't think .Gov will enact new spending policies in 27 years? New entitlements? Altogether just ignore most of this shit in 3 years? The dollar doesn't have 27 years you morons. This is why politics is absolutely insane. They go on political whims not economic realities.

Here I have a balanced budget plan:

End the wars in Iraq and Afghanistan, close down and withdrawal all troops from around the world. Slash AD personnel by 50%, from 1.5mil+ to 750,000. Eliminate new weapons contracts. Withdrawal from the UN and NATO. Tell Raytheon and the rest of the MIC to piss off. No more vast profits via stealing from the people.

Eliminate all unConstitutional departments. You would be left with State & Defense (I am probably forgetting one or two). Bye-bye HUD, Interior, Education, Energy, EPA, etc.

Eliminate Medicaid Part D & allow anyone under 70 to opt-in to Social Security. Raise retirement age to 70.

Repeal and Eliminate Obamacare.

End all subsidies.

That should cover a few bases. Of course, this will never happen, so might as well not even propose such a watered down initiative, but the above is a rough outline of what needs to be done at a minimum to have a balanced budget. Of course, you can always say you will raise taxes to cover the 1.3 trillion short-fall..Ha! 90% taxes across the board. Yeah, that is probably more untenable than the above.

MRoCkEd
11-10-2010, 12:32 PM
Weak!

MsDoodahs
11-10-2010, 12:57 PM
Interesting, heard that is suggested by that deficit panel....

Also - they suggest trimming itemized deductions...

I got in on the tail end of the discussion of it on Cartoon Network (CNBC).

hmmmm

eta: it would eliminate all congressional earmarks....defense spending cuts including reducing the # of bases....raise the federal gas tax....reduce Congressional and WH pay by 15%....change to 3 individual rates (lower than now) and one corporate rate (26%).

Freeze federal pay (non defense agencies) for 3 years. Cut fed workforce by 10%.

Eliminate or modify domestic production deduction.

Modify or eliminate LIFO accounting method.

I'll add more if they flash more on screen....

Jordan
11-10-2010, 01:06 PM
Hmm, removal of all tax credits and reducing rates. I'm so cool with that.

cswake
11-10-2010, 01:07 PM
The best part of the presentation is Slide 41, where they have their enforcement provisions:

http://i53.tinypic.com/1zna9tc.jpg

Jordan
11-10-2010, 01:09 PM
Ok. Sign it, pass it, then do it again!

http://izismile.com/img/img3/20100316/moar_00.jpg

acptulsa
11-10-2010, 01:11 PM
This is as silly as the federal debt ceiling. Put a limit on Congress but allow them to change the limit with a simple vote among themselves. Why don't we just put police detectives in charge of maintaining, retaining and interpreting the Bill of Rights?

HOLLYWOOD
11-10-2010, 01:38 PM
Oh the scams of hiding building debt over decades now, but when it all comes to a head and pops, all these clowns in these so-called commissions will be long gone.

Just ask ex US Senator Phil Gramm and his $ 7 figure earnings at UBS.

Same goes for all of them, left right...

Here's what's going to happen... look for a major major major increase in Americans claiming Social Security Disability.

Anybody that's wise will do it to these charlatans.

cswake
11-10-2010, 01:54 PM
Here's another interesting proposed change, to adjust the CPI downward since it overstates inflation:

http://i53.tinypic.com/5zip00.jpg

Austrian Econ Disciple
11-10-2010, 02:07 PM
CPI over-stating inflation?

YouTube - PETER GRIFFIN LAUGHS (http://www.youtube.com/watch?v=iCqu2odTqCk&feature=related)

cswake
11-10-2010, 06:37 PM
And perhaps the best critique you will read of this plan:
http://www.atr.org/obama-fiscal-commission-shows-desire-cut-a5648

* Spends too much. Government spending has typically been set at 21 percent of GDP, with revenues averaging 18 percent. The plan spends above this level every year until 2040, keeping taxes at around 20 percent to fund this profligacy

* Does nothing to address long-term spending restraint. Instead, the Co-Chairs propose raising taxes to unprecedented levels to sustain excessive government growth.

* Refuses to acknowledge the impact big government, excessive spending packages such as the “stimulus” plan and bailout bills have had on the country’s solvency. Instead, the plan sets spending at FY2010 levels, starting in FY 2012. This instantiates the “stimulus,” bailout and big government efforts of the past two years for generations to come, costing taxpayers $317 billion more than if outlays were rolled back to FY08 levels.

* Takes the misguided approach of looking at debt as a percentage of GDP rather than spending. In reality, the plan spends over ten trillion dollars in the next ten years, or $2.9 trillion more than if spending were frozen at FY08 levels.

* Requires a one percent spending cut based on the spending levels of the previous year from 2012 until 2015, but bases these cuts off of the starting point of the bloated FY10 levels and only requires spending reductions until 2015, the benchmark for the President’s goal of deficit reduction.

* Serially overstates cost savings based on unreliable and disproven data. For instance, the plan relies on the Pentagon’s estimate of $5.4 billion in savings resulting from contracting costs. This projection, however, does not taking into account the massive costs associated with moving that work from outside contracts to inside the DOD, the average cost of which is $4 million per new federal employee.

* Demonstrating a total apathy for serious fiscal reform, the plan allows Congress and President to waive what spending constraints it does suggest in years there is “low economic growth, unanticipated military conflict or major disaster,” without bothering to define any of these criteria, making little—if anything—in the proposal binding.

devil21
11-10-2010, 08:43 PM
I sat next to Erskine Bowles on a flight a few months ago. He was trading emails with Paul Begala on his Blackberry, which is what caught my attention. I really wish I had known at the time exactly who he was (I knew the name but couldnt place him) because I would have either tried to pick his brain or punched him in the nose. Maybe both, in that order.
These guys aren't serious about cutting anything, particularly anything that doesn't cut into the standard of living of the people. They are serious about making sure fed.gov keeps its power and how to spin and dupe the accounting of the massive deficits and spending that will continue to happen until the dollar is dead.

cswake
11-10-2010, 11:00 PM
The best part about proposing to cut $200 billion by 2015 and balancing the budget in three decades are the reactions:

http://thehill.com/blogs/on-the-money/budget/128713-pelosi-left-rip-proposal-from-debt-commission-chairmen

Democrats:

Speaker Nancy Pelosi (D-Calif.) said it was “simply unacceptable.”
AFL-CIO President Richard Trumka said the chairmen had told “working Americans to ‘Drop Dead,’”


Republicans:

Incoming House Budget Committee Chairman Paul Ryan (R-Wis.) and two other Republicans on the commission released a statement calling the proposal “provocative,”

AuH20
11-10-2010, 11:23 PM
Here's another interesting proposed change, to adjust the CPI downward since it overstates inflation:

http://i53.tinypic.com/5zip00.jpg

The CPI's methodology was already altered in 1994. Now they want to DO IT AGAIN?!!?

tangent4ronpaul
11-10-2010, 11:39 PM
http://www.usatoday.com/news/washington/2010-11-10-federal-savings-social-security_N.htm?csp=34news

Task force faces uphill battle on plan to cut deficit $3.8T

WASHINGTON — The leaders of a bipartisan panel charged with finding ways to cut the $13.7 trillion national debt Wednesday recommended more than $3.8 trillion in savings over the next decade, but they met quick resistance from Democrats.

The proposal includes sweeping changes to Social Security, the elimination of popular tax breaks and nearly $1.5 trillion in suggested cuts from defense and domestic spending programs.

"We have harpooned all of the whales in the ocean, and some of the minnows," said Republican Alan Simpson, one of the commission's co-chairmen. Asked how the bold plan would attract enough votes from the 18-member panel, he said, "We have no idea."

Simpson and Democratic co-chairman Erskine Bowles began peddling the plan to other members three weeks before the panel reports to President Obama on Dec. 1. Fourteen members must agree on a plan to force action by Congress.

The White House reacted with restraint. "These ideas ... are only a step in the process toward coming up with a set of recommendations," spokesman Bill Burton said.

Obama, who is traveling in Asia, had not seen the plan in advance, but it was shown to his economic advisers. "I think they found some things they liked and some things they didn't like," Bowles said.

Democrats decried future changes to Social Security, including lower benefits for upper-income recipients and reduced cost-of-living increases.

"We're going to take it out on senior citizens?" said Rep. Jan Schakowsky, D-Ill., one of House Speaker Nancy Pelosi's appointees to the panel. "I am virulently against that proposal."

Democrats complained the plan had about $2 in spending cuts for every $1 in new revenue. Asked if that was too much of a tilt, Sen. Dick Durbin of Illinois, assistant Democratic leader, said, "To me it is."

Republicans were more open to the proposals, because much of the $1.1 trillion saved by eliminating tax breaks — including for children and mortgage interest — would be used to reduce individual income tax rates. Six tax rates ranging from 15% to 35% would be shrunk to three — 8%, 14% and 23%.

GOP Reps. Paul Ryan of Wisconsin, Dave Camp of Michigan and Jeb Hensarling of Texas said called it a provocative proposal. Added Sen. Tom Coburn, R-Okla.: "No family facing tough economic times has the luxury of treating portions of their budget as sacrosanct. Neither should Congress."

Because of the weak economy, the co-chairmen said nothing should take effect until 2012.

Highlights of the plan include:

•Future changes to Social Security designed to ensure its solvency for 75 years. The payroll tax cap would be raised to $190,000, and the retirement age would be raised to 69 by 2075.

•Reductions in Medicare payments to doctors, lawyers, drug companies and others. Patients would pay more in deductibles and co-payments.

•A cut in the corporate tax rate from 35% to 26%. The alternative minimum tax, used to ensure that upper-income taxpayers don't avoid taxes, would be eliminated. To help make up for lost revenue, the federal gas tax, now 18.4 cents a gallon, would be increased by 15 cents.

jclay2
11-11-2010, 12:04 AM
LMAO 27 years to balance the budget. These guys must be goddamn fucking stupid. Any plan that says budget will be balanced in 27 years is STUPID. You don't think .Gov will enact new spending policies in 27 years? New entitlements? Altogether just ignore most of this shit in 3 years? The dollar doesn't have 27 years you morons. This is why politics is absolutely insane. They go on political whims not economic realities.

Here I have a balanced budget plan:

End the wars in Iraq and Afghanistan, close down and withdrawal all troops from around the world. Slash AD personnel by 50%, from 1.5mil+ to 750,000. Eliminate new weapons contracts. Withdrawal from the UN and NATO. Tell Raytheon and the rest of the MIC to piss off. No more vast profits via stealing from the people.

Eliminate all unConstitutional departments. You would be left with State & Defense (I am probably forgetting one or two). Bye-bye HUD, Interior, Education, Energy, EPA, etc.

Eliminate Medicaid Part D & allow anyone under 70 to opt-in to Social Security. Raise retirement age to 70.

Repeal and Eliminate Obamacare.

End all subsidies.

That should cover a few bases. Of course, this will never happen, so might as well not even propose such a watered down initiative, but the above is a rough outline of what needs to be done at a minimum to have a balanced budget. Of course, you can always say you will raise taxes to cover the 1.3 trillion short-fall..Ha! 90% taxes across the board. Yeah, that is probably more untenable than the above.

Totally agree. The most important though is that we create the beginning of the end for the entitlement system. The only problem is that we now have a aging population who will never allow a opt out option. The only thing that will be done is to print money. Expect high inflation and a reduction in the standard of living for all. Total collapse in the monetary system and introduction of a one world currency will surely be the end game to all of this.

jclay2
11-11-2010, 12:40 AM
[QUOTE=cswake;2977213]Here's another interesting proposed change, to adjust the CPI downward since it overstates inflation:

HAHAHAHA LMAO! That is a good one. What else can the ministry of truth bring us? :eek:

devil21
11-11-2010, 01:41 AM
[QUOTE=cswake;2977213]Here's another interesting proposed change, to adjust the CPI downward since it overstates inflation:

HAHAHAHA LMAO! That is a good one. What else can the ministry of truth bring us? :eek:

Also to delink SS payment increases to the rate of inflation.

Sounds to me like some serious price inflation is going to hit and they want to essentially stay mum on the real inflation rate and how it affects the budget. It doesnt make much sense to cut entitlement spending if you still tie increases to the real rate of inflation. There's little net gain in tackling the deficit (on paper). More kicking the can and "hiding" the truth, though people will see the truth in price inflation.

Zippyjuan
11-11-2010, 01:43 AM
The CPI's methodology was already altered in 1994. Now they want to DO IT AGAIN?!!?

They redefine what comprises the CPI and what weights the components get every ten years. They use information collected during the census to determine what people tend to buy and how much they spend on them. The CPI will probably be changed again in a couple years (if the last one was 2004 then it will change again in 2014).

RonPaulCult
11-11-2010, 01:59 AM
Sometimes it all just seems so hopeless. Ron Paul was on tv earlier today and he said it's very unlikely that even THESE cuts will pass. If they can't make these cuts what chance do we have?

Rand Paul and Ron Paul and the people who are really trying to change government must stay strong and LOUD. We have to all do our part too. We have to inform all of our friends, co-workers and family about where we are heading if we don't make massive cuts.

At least it can't be said that we did nothing.

devil21
11-11-2010, 02:00 AM
They redefine what comprises the CPI and what weights the components get every ten years. They use information collected during the census to determine what people tend to buy and how much they spend on them. The CPI will probably be changed again in a couple years (if the last one was 2004 then it will change again in 2014).

Why? What exactly has changed in the last 10 years....hell 20 years...that would necessitate a changing of how CPI is measured and how it's weighted every 10 years? Why change it now? Gas is gas. Food is food. Oh wait, those aren't included, are they?

PeacePlan
11-11-2010, 02:28 AM
Why? What exactly has changed in the last 10 years....hell 20 years...that would necessitate a changing of how CPI is measured and how it's weighted every 10 years? Why change it now? Gas is gas. Food is food. Oh wait, those aren't included, are they?

They are not going to include unimportant items such as gas, heating oil, food, and housing. They only include important items like tobacco, and alcohol - you know the things you need...

lester1/2jr
11-11-2010, 10:21 AM
They don't go nearly far enough but these should be implemeted and it is a good start for a national conversation on this issue which will hopefully lead to discussing the war elephant in the room.



anyone else encouraged by this development?

ChaosControl
11-11-2010, 10:30 AM
Under one option, the top rate for individuals could be cut from 35% to 28%, and to 26% for corporations.

I think it is messed up for an individual to have to pay more than a corporation.

Travlyr
11-11-2010, 10:38 AM
Is there any truth to what this video series describes?
The claim: money is debt, so more debt = more money.
The result of reducing spending or reducing debt is default because interest money is not created when the money is created, so there is no possible way to reduce spending and pay interest.

YouTube - Money As Debt 1-4 (http://www.youtube.com/watch?v=mIIAvdJvCes)

PeacePlan
11-11-2010, 10:45 AM
Is there any truth to what this video series describes?
The claim: money is debt, so more debt = more money.
The result of reducing spending or reducing debt is default because interest money is not created when the money is created, so there is no possible way to reduce spending and pay interest.

YouTube - Money As Debt 1-4 (http://www.youtube.com/watch?v=mIIAvdJvCes)

Think of it this way. We are at a card game and I hold and issue the cards. There are 4 players. I give you each 5 cards and tell you that you must give them all back later plus 1 card interest. Unless you get another loan of cards you can not pay back the 24 cards that are now owed.. the 20 plus the 4 interest..

I hope that makes sense in an easy to understand way...

In order for this to work it must continually increase

nate895
11-11-2010, 10:51 AM
Why? What exactly has changed in the last 10 years....hell 20 years...that would necessitate a changing of how CPI is measured and how it's weighted every 10 years? Why change it now? Gas is gas. Food is food. Oh wait, those aren't included, are they?

For example, we purchase more computers, and computer software/hardware is a much larger expense than it was 10 years ago, and way more than 20 years ago. That will probably be the largest change from the previous CPI computations.

PeacePlan
11-11-2010, 11:10 AM
For example, we purchase more computers, and computer software/hardware is a much larger expense than it was 10 years ago, and way more than 20 years ago. That will probably be the largest change from the previous CPI computations.

Actually they use computers to say the inflation is lower as they compute that and many other things as "Value Added" so they look at computers and say 8 years ago you paid 1000 buck for a 1000 mhz PC and today you pay 1000 bucks for a 3000 mhz quad core pc. They figure in the "Value Added" as you now have a computer that is 10 or 20 times as fast and that much more productive.

They use computers to show how low inflation is. My first computer I bought had a 20 meg hard drive and ran I think it was 16 mhz for 2500 bucks

georgiaboy
11-11-2010, 11:27 AM
directionally correct tip of the iceberg, excepting for the atrocious accounting rule changes.

1836er
11-11-2010, 12:13 PM
I think it is messed up for an individual to have to pay more than a corporation.

Actually, corporations shouldn't be taxed at all. Corporations are comprised of individuals who will already be paying taxes whenever they (the individual shareholders) either liquidate their assets, get a paycheck from, or receive a dividend (or other investment income, whatever) from the company anyway. Corporate taxes are actually double-taxation.

militant
11-11-2010, 12:39 PM
This is as silly as the federal debt ceiling. Put a limit on Congress but allow them to change the limit with a simple vote among themselves. Why don't we just put police detectives in charge of maintaining, retaining and interpreting the Bill of Rights?

We effectively have.

ChaosControl
11-11-2010, 12:53 PM
Actually, corporations shouldn't be taxed at all. Corporations are comprised of individuals who will already be paying taxes whenever they (the individual shareholders) either liquidate their assets, get a paycheck from, or receive a dividend (or other investment income, whatever) from the company anyway. Corporate taxes are actually double-taxation.

Corporations also receive limited liability, corporate person hood, and a whole host of other special benefits. They certainly should be taxed to pay for those things.

Now I'm all for abolishing corporations and then just taxing and treating them like sole proprietorships or partnerships, but as long as corporations get those benefits they should be taxed on profit.

If any income tax should be abolished it should be wage taxes.

oyarde
11-11-2010, 08:01 PM
Actually, corporations shouldn't be taxed at all. Corporations are comprised of individuals who will already be paying taxes whenever they (the individual shareholders) either liquidate their assets, get a paycheck from, or receive a dividend (or other investment income, whatever) from the company anyway. Corporate taxes are actually double-taxation.

Yes and passed to consumer .