A presidential 18 member bipartisan commission lead by former Republican Senator Alan Simpson and former Democratic White House official Erskine Bowles released a draft of a plan that would significantly reduce the federal deficit. It is comprehensive and while I may have minor arguments with it here or there, I would be willing to forgo even discussing those to expedite its passage and implementation. It would reduce the deficit to 2.2% of GDP by 2015, which is quite sustainable. For reference, the deficit was 8.9% last year.
It is very complete and leaves virtually no stone unturned.
And that is probably why it has about as much of a chance of surviving as a hot dog in front of Joey Chestnut.
The following is a summary of the proposal with some of my comments in bold. Come on, you know I couldn’t just put it out there without some of my witty and savvy editorial analysis.
SPENDING CUTS - Would reduce discretionary spending (programs like defense and law enforcement that are set by Congress each year) in fiscal 2012 to 2010 levels; impose 1 percent cuts in each of the next three fiscal years In 2015, defense spending would be $100 billion lower and nondefense spending also $100 billion lower than envisioned in the White House's current budget scenario
Keep in mind that a 1% reduction is more than a 1% reduction. The plans generally assume a 3 to 5% year to year increase. But seeing as our major wars are against people who put rusty nuts and bolts into cans as their weapon of choice, I think we could dial down some of the spending.
- Eventually bring government spending down to 21 percent of gross domestic product, from its current level of 24 percent of the economy
So obvious no comment is necessary and yet by stating that a comment I did make. When did I start sounding like Yoda?
- Automatic cuts would take effect at the end of each year if Congress exceeds spending caps
- Set up bipartisan committee to eliminate outdated and inefficient programs
My gosh, why do that?
- Stretch out budget cycle over two years
Increase predictability is a good thing. I would be for going to four years.-
Sample cuts include:
freeze pay for federal workers; reduce overseas military bases by one-third; cut federal workforce by 10 percent; slow growth of foreign aid
We have over 30,000 troops on the ground in Korea. And on top of that most of these people are very, very close to the border, where on the other side North Korea has about one piece of conventional artillery per US troop. Before we can turn that land lead by inbred demented political leaders into the wasteland they really want it to be by their actions, they will be able to get enough shots off to do some real slaughtering of our guys. Cut the bodies on the ground, increase those in the air and sea and I think you will reduce costs and increase effectiveness and if push comes to shove, save American lives. Repeat in Europe.
Slow growth in foreign aid should be translated to stopping foreign aid to any country that cannot guarantee effectiveness of the aid. Private citizens spend more time looking at the charities to which they contribute to insure that they are efficient spenders then we do in the billions we send to governments whose leaders make Bernie Madoff seem like an honest bloke with the best interest of his clients as his mantra.
OVERHAUL TAX CODE
- Would eliminate all of the $1.1 trillion exemptions currently in the tax code, such as the mortgage-interest deduction and the earned-income tax credit
Won’t do much to stimulate the housing market but it is about time. While we are at it, let’s get the government out of trying to guess what is good for the economy and eliminate laws that encourage specific behavior like buying houses.
- Lower and simplify individual income-tax rates: 8 percent for those with annual incomes below $70,000; 14 percent for those with incomes up to $210,000; and 23 percent for incomes above that level
Lower and simplify? Really? Look, in reality with this will go the elimination of many opportunity for deductions. But it still excites the hell out of me. Man oh man….anyone got a cigarette? Will someone order a pizza?
- Lower corporate tax rate from 35 percent to 26 percent
Encourage businesses to reinvest? Get more people to work? What are they thinking?
Treat dividends and capital gains as ordinary income - Set aside $80 billion for deficit reduction - Gradually raise gas tax by 15 cents starting in 2013 to pay for transportation spending
We must increase taxes somewhere. This makes sense to me as it will put pressure on decreasing demand and ties spending on transportation to those that use it.
- Abolish the alternative minimum tax
Look..I am 53 and can’t recover as fast as I used to. Make mine a pepperoni and break open another pack of Camels.
REDUCE HEALTH CARE COSTS
- Would pay doctors and other providers less for seeing patients under government programs like Medicare and Medicaid
- Cap damages in malpractice suits
Otherwise known as tort reform. The libertarian in me hates this. The pragmatist in me wins.
- Require Medicare participants to pay more costs themselves
Inevitable. No way around it. Law of physics. Demand going up. Supply of young labor to pay for it going down. Something has to break and I want someone there to take care of it when it does.
- Require lower costs for brand-name drugs covered by government programs
- Expand successful cost-containment programs
- Strengthen independent oversight board
- If costs grow more than 1 percent faster than the economy after 2020, require president to propose further cost cuts or a robust public health insurance option
OTHER SAVINGS
- Would reduce farm subsidies by $3 billion per year
As much as I respect the hardworking farmer, enough is enough. We all better be prepared to pay more for food but in the end, we will be better off.
- Revamp consumer price index, used to calculate benefit increases, to better reflect actual rate of inflation
- Increase employee contributions to government retirement programs
Stop that! I am exhausted. If I smoke another cigarette or eat another slice of pizza I will increase medical costs…
Postpone military retirement programs and make them take effect after age 60
I highly respect the military and all that serve but someone has to tell me why this is bad.
SOCIAL SECURITY
- Would revamp the retirement program to ensure its long-term stability, but separately from the deficit reduction effort
- Add minimum benefits for poorest retirees
- Increase benefits for older retirees
- Require more affluent earners to pay more
I wish it was not necessary but it is. Gut it up.
Raise the retirement age to 68 in 2050 and 69 in 2075 Why in the hell wait until 2050 and 2075.
What is wrong with now!
Exempt those who work physically demanding jobs; allow them to retire at 62
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