Wednesday, July 20, 2011

Obama Endorses Budget Plan That Cuts Soc Sec, Medicare And Corporate Tax Rates

Yesterday, President Obama, ignoring the Congressional Progressive Caucus' proposed budget that balances the budget in just ten years without cutting Social Security and Medicare, all but endorsed the deficit reduction plan outlined by the Gang of Six conservative Republican and Democratic Senators.

President Obama Briefs the Press on the gang of six proposal

Cenk Uygur on The Young Turks breaks it down

The plan recommends “reforming” (i.e. cutting) Social Security in ways that will even affect current retirees. But not a penny of the money saved will go to deficit reduction, which begs the question — why include Social Security at all?

The gang of six plan proposes a chained CPI adjustment to Social Security, which may not be a bad idea when combined with other measures to boost benefits and strengthen the program, but on its own is tantamount to a $1,300 cut each year for recipients over their lifetimes. Strengthen Social Security co-chair and former Obama adviser Nancy Altman has denounced the idea as an overly harsh cut. “The chained-CPI is poor policy, and given that seniors vote in disproportionately high numbers, it is equally poor politics,” she said.

The Gang of Six has said all the changes will go toward securing the long-term financial security of the program, but Social Security is already solvent until 2037 and does not contribute to the deficit.

The plan also lowers the corporate tax rate from 35 percent to between 23 and 29 percent, eliminates the alternative minimum tax, and lowers personal income tax rates, even though the United States is already a low-tax country. That’s true for individuals and for corporations, and it’s true whether you compare us to other countries or the America of the past. No matter how you slice it the conclusion is the same.

Conservatives like to claim that our budget deficits are purely a “spending problem.” Said Senate Minority Leader Mitch McConnell (R-KY): “We don’t have this problem because we tax too little. We have it because we spent too much.”

It’s a popular talking point, but it simply isn’t true. Deficits do not stem from spending levels alone. They are the product of a mismatch between spending and revenue. And when revenue is as low as ours is, you end up with big deficits.

Click here to view 10 charts demonstrating the simple, clear truth that federal taxes in the United States are very low.

The plan faces numerous obstacles — it’s incredibly vague on the details, has critics on both sides of the aisle, and may not even be ready by the Aug. 2 default deadline. Liberal Democrats have pointed out the plan is far from a balanced approach, asking seniors and the working poor to bear the brunt of the pain without asking the wealthy or corporations to sacrifice at all.

AFL-CIO President Richard Trumka doesn't share President Obama's enthusiasm for the so-called balanced approach to deficit reduction proposed by the gang of six.

"...We keep seeing bipartisan support for plans like the so-called 'Gang of Six' that cut Social Security benefits, kill jobs, give tax incentives for corporations to export good jobs overseas, tax health benefits, and lower tax rates for billionaires and corporations," Trumka said in a statement Wednesday. "There's no shared sacrifice here. The only sacred cows being gored are working people, the middle class, seniors and the poor."

The plan runs counter to public's message: protect Medicare and Social Security, spend less on the military, and raise taxes on the wealthy. And while we're at it, let's tax the Wall Street speculators who wrecked our economy.

A recent Pew Research Center poll found that although a majority of respondents believe the financial health of social security, Medicare and Medicaid is only fair or poor, majorities also believe the programs’ benefits shouldn’t be cut.

Asked “which is more important – taking steps to reduce the budget deficit or keeping Social Security and Medicare benefits as they are,” 60 per cent chose keeping the benefits, versus 32 per cent opting for deficit reduction.

Given a choice between “people on Medicare need to be responsible for more costs to make it financially secure” and “people on Medicare already pay enough of their health costs,” 61 per cent said the latter, versus 31 per cent calling for more cost shifting to Medicare recipients.

And bad news for state governments: Just 37 per cent said “states should be able to cut back on Medicaid eligibility to deal with budget problems,” versus 58 per cent saying “low income people should not have their Medicaid benefits taken away.”

But, newspapers and cable TV "news" and commentary programs rarely, if ever, stick up for what the majority of the public wants? When Senator Bernie Sanders says “Social Security is not going broke, and should not be cut” and, “Social Security has a $2.2 trillion surplus…" reporters in the main stream call his statements, "the far left position." Sander's comments do in fact represent the true main stream position according to all polls taken in recent months.

While no one, not even Pres. Obama, says a word about it, the Congressional Progressive Caucus has proposed a budget that balances the budget in just ten years without cutting Social Security and Medicare. The Progressive plan repeals the Bush tax cuts for millionaires and billonaires, which saves three trillion dollars. Second, the plan cuts corporate taxpayer handouts to pharma, insurance and petrochemical industries and adds a new income tax bracket for billionaires. That raises at least an additional three trillion dollars. In the next decade the plan also cuts defense spending by about $1.8 trillion. The Progressive plan also lifts the Social Security payroll cap of $106,800 per year (2011) so that wealthy individuals who take home millions and billions of dollars in earnings every year can pay their fair percentage share of Social Security support, too.

The Progressive plan not only protects and strengthens Social Security and Medicare for decades to come, it puts America back to work through infrastructure and high tech investments.

The right-wing has been trying to dismantle the New Deal since its inception, but they have been caught between what their ideology calls for -- getting rid of Social Security, Medicare and much of the rest of government -- and what the public will accept. Republicans created the huge deficit while they controlled congress and President Bush was in the White House to starve the government beast. Now they are using the huge deficit they created to make massive cuts in government programs and to "privatize" Social Security and Medicare. And, the irony of it is that Republicans will bash Pres. Obama and Democrats for cut Social Security and Medicare, just as they did during the 2010 mid-term election.

Huffingtonpost: Senator Bernie Sanders (I-Vt.) has been driven to sarcasm as Congress and the White House continue to move forward with plans to cut Social Security, Medicare and other social programs in the name of deficit reduction. In a statement entitled "Congratulations Coburn, Crapo and Chambliss," Sanders, a member of the Senate Budget Committee, offered false praise to the Republican members of the so-called "Gang of Six" for winning in a "major victory" in debt negotiations with the White House.

Coming at a crucial time in debt reduction negotiations between President Obama and GOP congressional leadership, Sanders' comments reflect growing frustration among some members of Congress with what they view as too much willingness on the part of the White House to compromise with Republicans on key progressive issues.

Sanders congratulated the GOP members of the Gang of Six on their "very significant victory in negotiating a deficit-reduction plan which achieves their long-term goal of dismantling every major social program relevant to working families."

Sanders slammed a specific aspect of the Social Security reform proposal put forth by the Gang of Six which would alter the formula used to calculate cost-of-living adjustments (COLAs) for seniors. Sanders said that in 10 years the new plan would mean a $560 cut in annual benefits for the average 75-year-old. He went on the criticize aspects of the same plan for cutting Medicare "by $298 billion over 10 years" and making "massive cuts" to Medicaid.

Much of Sanders' and the Democrats' ire over the budget-cutting plan revolves around policies progressives see as potentially damaging to lower and middle-class Americans still struggling with unemployment and the effects of the Recession.

In his statement, Sanders warned specifically of the danger higher taxes on the middle class could pose, saying, "there is reason to expect that some of the areas that the House and Senate will be looking at include the home mortgage deduction for middle-class families, taxes on health care benefits, and increased taxes on retirement programs such as 401(k)s and IRAs."

Appearing Wednesday afternoon on MSNBC's "The Dylan Ratigan Show," Sanders reiterated his criticism of the plan's revenue raising provisions saying, "in terms of revenue, it is very very vague as to where this revenue is going to come from."

Petition - Shared Sacrifice: U.S. Senator Bernie Sanders (Vermont)

Will American Majority Outnumber Gang of Six?

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