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.