"Gang of Six" quietly working on a realistic budget deal

[BostonPirate]

Conrad, a moderate Democrat, has been quietly meeting with his five Senate colleagues for several weeks. The group includes another moderate, Democrat Mark Warner of Virginia; a liberal Democrat, Dick Durbin of Illinois; and three conservative Republicans — Tom Coburn of Oklahoma, Mike Crapo of Idaho and Saxby Chambliss of Georgia.

Their work builds on the plan produced by Obama's deficit commission in December, which called for about $1 trillion in tax increases and $2.9 trillion in spending cuts over the next decade. The senators are working to set similar spending caps and tax increases as part of an overhaul of the tax code. Their work has sparked opposition from liberal groups concerned about benefit programs and conservatives opposed to tax increases.

so the inner workings of a split government are finally beginning to emerge. I can't imagine how Durbin and Coburn could ever agree on anything but it seems this is the real deal being hammered out. No one else is making any sort of comprehensive plan but them.

The president has not committed to the deal making or any of its results. The six men involved have been critical of the President for not submitting a budget that addresses the real deficit and debt issues.... medicare, medicaid, and the military.

"It's a shame the president hasn't decided to lead," Coburn said. "What we need is leadership in this country about the real problems and what the potential solutions are, and a call to arms for all Americans to join hands and look to solve our problems. Otherwise, we're in the tank."

Obama said his budget proposal is a down payment on the nation's financial problems, reducing borrowing by about $1 trillion over the next decade. It will take time, he said, to create the kind of political environment necessary for Democrats and Republicans to negotiate in good faith on more difficult long-term issues like Social Security and Medicare.

"If you look at the history of how these deals get done, typically, it's not because there's an Obama plan out there. It's because Democrats and Republicans are both committed to tackling this issue in a serious way," Obama said at a press conference this week.

http://www.canadianbusiness.com/markets/market_news/article.jsp?content=D9LEOUJ81&page=1

 

[BostonPirate]

http://www.washingtonpost.com/wp-dyn/content/article/2011/02/17/AR2011021701361.html?hpid=topnews

more here from a different source on more details of their work....

That group hopes to advance the commission's recommendations, which would reduce deficits by $4 trillion over the next decade. Doing so would require lawmakers to embrace some politically perilous policies, however, including raising the retirement age, charging wealthy seniors more for Medicare and closing cherished but expensive tax breaks that riddle the tax code.

so they are taking on the big enchilada... And the deal has teeth if its requirements are not met. I wonder where this is going to go?

In addition, the group would set explicit annual caps on discretionary and mandatory spending, forcing lawmakers to make hard choices about where to spend scarce tax dollars. If Congress failed to meet them, the caps would be enforced by sequestration, a painful process that requires the White House budget office to cut across the board until the targets are met.

 

[PSCGuy]

Republicans are so full of shit when they say they want the president to "lead". What they mean is they want the president to propose cuts to Social Security and Medicare, take all of the political heat for it, and then Republicans can get what they wanted all along. That is what they mean.

Durbin and Corburn working together isn't actually as surprising as it seems. They were both on the deficit commission, and endorsed the final plan. And the commission was basically Kent Conrad's brainchild anyway. So there you have it.

Also, look at the makeup of this panel. One "liberal" who has already endorsed the budget deficits findings, two "moderate" Democrats like Conrad and Warner (I would argue that Conrad is a conservative, particularly on fiscal matters). And three hard-right Republicans. This isn't a balanced group.

And for the love of God. SOCIAL SECURITY IS NOT IN CRISIS. It is 100% solvent until 2037, provided that the government general fund pays its debts to the Trust Fund. And it can pay 75% of benefits thereafter. Currently, SSI is funded through a payroll tax, which is capped at $106,800 of income. This covers 83% of all income in the country, which is 7% less than the 90% projected to meet full solvency of the program. If we raised the cap to $180,000 of income, 90% of all earnings in the US would be subject to the tax, and SSI would pay 100% of all benefits until... 2084.

Social Security is NOT in crisis. That is a damn right-wing lie.

 

[BostonPirate]

well... we can't just say that we cant fix it now because its not personally threatening us all. The idea is to get out in front of the thing before it gets unfixable.

I think theres not alot of money to be found in the SS system, to be honest. There are a whole lot of things they can do with the tax code, medicare, medicaid, and military spending... I agree in that sense.

 

[hotatlboi]

This is good to see. I hope a reasonable compromise is worked out. We really need to get serious about our deficit.

Social Security is NOT in crisis. That is a damn right-wing lie.

This is basically correct. It is Medicare that is in crisis.

 

[Kulindahr]

And for the love of God. SOCIAL SECURITY IS NOT IN CRISIS. It is 100% solvent until 2037, provided that the government general fund pays its debts to the Trust Fund. And it can pay 75% of benefits thereafter. Currently, SSI is funded through a payroll tax, which is capped at $106,800 of income. This covers 83% of all income in the country, which is 7% less than the 90% projected to meet full solvency of the program. If we raised the cap to $180,000 of income, 90% of all earnings in the US would be subject to the tax, and SSI would pay 100% of all benefits until... 2084.

Social Security is NOT in crisis. That is a damn right-wing lie.

Tie the cap to the bottom of the top tax bracket. That way if the brackets shift, SS is automatically adjusted. Tie it the other way, too: any time SS looks like trouble is coming within ten years, the tax bracket moves.

 

[PSCGuy]

I do hate the word crisis, but the long term deficit in the United States is being caused by rising healthcare costs, and the impact of costs on Medicare and Medicaid. If we do not get healthcare costs under control, by changing the way medicine is done in this country (like charging by procedures) we will never get ahead of the deficit problem.

 

[BostonPirate]

I do hate the word crisis, but the long term deficit in the United States is being caused by rising healthcare costs, and the impact of costs on Medicare and Medicaid. If we do not get healthcare costs under control, by changing the way medicine is done in this country (like charging by procedures) we will never get ahead of the deficit problem.

no one is arguing. The healthcare bill fixed part of that and took 230 billion out of the deficit, according to the CBO, and there is still room for improvement. Still, that can't be an excuse to not touch Soc Sec if the opportunity is there. I think Soc Sec is the last thing on the list...

But it IS on the list and it HAS to be dealt with.

 

[Kulindahr]

I do hate the word crisis, but the long term deficit in the United States is being caused by rising healthcare costs, and the impact of costs on Medicare and Medicaid. If we do not get healthcare costs under control, by changing the way medicine is done in this country (like charging by procedures) we will never get ahead of the deficit problem.

You've got to go more basic than that: address the supply of medical attention. That means two things: first, and most basic, is to increase the supply of doctors. How to do that? Get a dozen new medical schools built, to give us a total of, say, 4,000 new doctors a year. Then establish community immediate-care clinics, which would take the people who really don't need an emergency room but need attention promptly. That many doctors would allow four hundred or more such new clinics to be established annually (make half of medical school costs a tax credit for doctors who go there for five years, or something).

The Republicans should even go for that -- it's government involvement, but only to make a healthier free market.

 

[Kulindahr]

no one is arguing. The healthcare bill fixed part of that and took 230 billion out of the deficit, according to the CBO, and there is still room for improvement. Still, that can't be an excuse to not touch Soc Sec if the opportunity is there. I think Soc Sec is the last thing on the list...

But it IS on the list and it HAS to be dealt with.

SS idea: raise the cap on what the SS tax is levied on, and put the money in the fund NOT to be loaned out.

Though if I were making changes, I'd also set the minimum retirement payment equal to a minimum wage income.

 

[BostonPirate]

SS idea: raise the cap on what the SS tax is levied on, and put the money in the fund NOT to be loaned out.

Though if I were making changes, I'd also set the minimum retirement payment equal to a minimum wage income.

I think it needs to be changed to insurance, and is given based on consistent payments into the plan as well as need. Right now its rate of pay based on rate of investment into the system.

really do Soros and Gates need Soc Sec payments when they retire? yet they will get them.

 

[Kulindahr]

I think it needs to be changed to insurance, and is given based on consistent payments into the plan as well as need. Right now its rate of pay based on rate of investment into the system.

really do Soros and Gates need Soc Sec payments when they retire? yet they will get them.

I was pondering the need factor as I walked past the local Senior Center the other day. Almost no one who goes to the federally-subsidized lunches there needs SS at all, let alone subsidized meals -- the people who need the subsidized meals are the ones who can't afford to get there to get the benefit!

 

[JB3]

R
And for the love of God. SOCIAL SECURITY IS NOT IN CRISIS. It is 100% solvent until 2037, provided that the government general fund pays its debts to the Trust Fund. And it can pay 75% of benefits thereafter. Currently, SSI is funded through a payroll tax, which is capped at $106,800 of income. This covers 83% of all income in the country, which is 7% less than the 90% projected to meet full solvency of the program. If we raised the cap to $180,000 of income, 90% of all earnings in the US would be subject to the tax, and SSI would pay 100% of all benefits until... 2084.

Social Security is NOT in crisis. That is a damn right-wing lie.

Actually, there are already shortfalls in funding, and unless something is done they will become permanent until the fund is exhausted in 2037. That is ALREADY a crisis, because it occurred years before they predicted it would. That's the reason why the President has been pushing social security fixes, and why they're included with this group's proposal.

http://online.wsj.com/article/BT-CO-20110126-716874.html

Unfortunately, because of the way it has been handled (and the fact that congress did nothing under Bush to implement a solution) Obama HAS to be the one to take reins and work on a fix. If he doesn't, the exhaustion of funds will happen sooner.

 

[Kulindahr]

Actually, there are already shortfalls in funding, and unless something is done they will become permanent until the fund is exhausted in 2037. That is ALREADY a crisis, because it occurred years before they predicted it would. That's the reason why the President has been pushing social security fixes, and why they're included with this group's proposal.

http://online.wsj.com/article/BT-CO-20110126-716874.html

Unfortunately, because of the way it has been handled (and the fact that congress did nothing under Bush to implement a solution) Obama HAS to be the one to take reins and work on a fix. If he doesn't, the exhaustion of funds will happen sooner.

That's exactly what many in the Tea Party want. If they could, they'd balance the budget by ending Social Security altogether. They know they can't, so they seek to worm their way into power by using issues they really don't care about -- like jobs, or balancing the budget when you get down to it; their ideology is more important to them than the country is.

 

[JB3]

That's exactly what many in the Tea Party want. If they could, they'd balance the budget by ending Social Security altogether. They know they can't, so they seek to worm their way into power by using issues they really don't care about -- like jobs, or balancing the budget when you get down to it; their ideology is more important to them than the country is.

Exactly. I mean, even though I might have serious reservations about Social Security, I have no illusions that its going anywhere unless its replaced with something better. It is a part of the government that, for better or for worse, cannot be stripped away. Were that to happen, its effects would be devastatingly bad for a large portion of the population. So, while we still CAN fix it we should.

 

[Kulindahr]

Exactly. I mean, even though I might have serious reservations about Social Security, I have no illusions that its going anywhere unless its replaced with something better. It is a part of the government that, for better or for worse, cannot be stripped away. Were that to happen, its effects would be devastatingly bad for a large portion of the population. So, while we still CAN fix it we should.

Were I in the White House, I'd address the nation and admit that there are fair doubts about the constitutionality of the program -- and propose a constitutional amendment to make it undoubtedly legitimate. That would stick one to the Tea Party Klingons. At the same time I'd propose one to define political rights as belonging to no one but voters, including all enumerated and non-enumerated rights. I'd link them in people's minds -- and let the Republicans make fools out of themselves fighting against something I'd bet 3/4 of the public would support without hesitation.

Oh -- and specify that Social Security is not to be counted as part of the budget, and can only loan to the government at commercial rates, and authorize Congress to allow people to handle up to one-fifth of their accounts privately.

 

[PSCGuy]

SS idea: raise the cap on what the SS tax is levied on, and put the money in the fund NOT to be loaned out.

Though if I were making changes, I'd also set the minimum retirement payment equal to a minimum wage income.

Dare I say some politician needs to propose a "lock box"?

 

[Kulindahr]

Dare I say some politician needs to propose a "lock box"?

Something like that.

But I'd do something interesting: get a board of multi-millionaires with a proven record of investments in the stock market. Put them in charge of getting a good return for, say, a quarter of the SS fund. Catch: they have to toss a quarter of their own net worth into a fund that will be invested in exactly the same way as they invest the SS money.

 

[PSCGuy]

That sounds like a reality show.

 

[Kulindahr]

That sounds like a reality show.

Heh -- do that, and put the income in the SS fund.