Bi-Partisan Debt Reduction Report (Full Version)

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KenDckey -> Bi-Partisan Debt Reduction Report (11/23/2010 12:21:26 PM)

http://bipartisanpolicy.org/sites/default/files/FINAL%20DRTF%20EXECUTIVE%20SUMMARY_0.pdf

"America is the strongest, most prosperous, and most resilient nation in history. However, America’s leadership and greatness, our strength and prosperity, are not guaranteed. We face two huge challenges simultaneously. First, we must recover from the deep recession that has thrown millions out of work, slashed home values and closed businesses across the country. Second, we must take immediate steps to reduce the unsustainable debt that will be driven by the aging of the population, the rapid growth of healthcare costs, exploding interest costs, and the failure of policymakers to limit and prioritize spending

The plan will balance the “primary budget,” the budget other than interest payments, by 2014.
On a “unified budget basis,” i.e., including interest, the plan will ensure that future budget deficits are small and manageable. But, above all, it will ensure a strong economy for future generations of Americans.

America’s Future will:

• Revive the economy and create 2.5 to 7 million new jobs over two years with a payroll tax holiday.

• Balance the primary budget in 2014, reduce deficits including interest to small and manageable levels, and stabilize the debt below 60 percent of GDP by 2020.

• Create a simple, pro-growth tax system that broadens the base, reduces rates, makes America more competitive, and raises revenue to reduce the debt.

• Reduce the unsustainable rate of growth in healthcare costs.

• Strengthen Social Security to ensure that it will pay benefits for 75 years and beyond, while not increasing the retirement age and protecting the most vulnerable elderly.

• Freeze domestic and defense discretionary spending.

• Cut other spending, including farm and government retirement programs. "

This executive summary is 23 pages long.   Above is some extracts.   The Co-Chairs are Senator Domenici (Republican Author of the Budget Enforcement Act of 1990 and the Balanced Budget Act of 1997) and Alice Rivlin (Democrat that worked first with the Clinton Administration and was the OMB and CBO chairs).  The task force was created on January 10, 2010.

OK  My 2 cents.   I don't agree with everything, but I do think it is a nice start.




Lucylastic -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 12:40:31 PM)

how?



KenDckey -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 12:50:46 PM)

Government Spending Overview  FY 2010 budget

Most Americans would be reluctant to cut several key categories of federal spending. In fiscal year (FY) 2010:
• Medicare and Medicaid consumed 21 percent of federal spending;
• Social Security consumed 20 percent;
• Defense consumed 20 percent;
• Other mandatory spending (for example, veterans’ compensation, unemployment insurance, and food stamps) consumed 17 percent; and
13 | P a g e
• Interest on the debt consumed 6 percent.
• That leaves only 16 percent for everything else – veterans’ health care, homeland security and law enforcement, education and student aid, roads and bridges, food and drug inspection, energy and the environment, and so on. Clearly, there are no easy answers to the debt crisis.
Policymakers cannot solve the debt crisis simply by eliminating congressional earmarks (less than one percent of the discretionary budget) or foreign aid, which is less than one percent of the total budget.
Nor can policymakers significantly reduce the debt by eliminating “waste, fraud, and abuse,” although they surely should undertake efforts to eliminate as much waste, fraud, and abuse as possible.
Nor can policymakers realistically solve the problem simply by cutting domestic discretionary spending. Stabilizing the debt by 2020 through domestic discretionary cuts alone would require eliminating nearly all such spending – everything from law enforcement and border security to education and food and drug inspection.
Nor can policymakers rely on hopes of a strong economy to “grow our way out of the deficit.” Just to stabilize the debt at 60 percent of GDP, the economy would have to grow at a sustained rate of more than 6 percent per year for at least the next ten years. The economy has never grown by more than 4.4 percent in any decade since World War II.
Nor can policymakers solve the problem simply by raising taxes on wealthy Americans. Reducing deficits to manageable levels by the end of the decade though tax increases on the most well-to-do
Medicare & Medicaid21%
Social Security20%
Defense Spending20%
Other Mandatory Spending17%
Interest on the Debt6%
Everything Else16



KenDckey -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 12:56:44 PM)

Recommendatons (Starts on page 15)

   
1. Revive the Economy and Create Jobs
  
2. Reduce and Stabilize the Debt
  
3. Create a Simple, Pro-growth Tax System
  
4. Restrain Rising Healthcare Costs
  
5. Strengthen Social Security
  
6. Freeze Domestic Discretionary Spending
  
7. Freeze Defense Spending
  
8. Cut Spending in Other Programs
  
9. Enforce the Budget, Reform the Process



tazzygirl -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 1:17:27 PM)

Major receipt categories
During FY 2009, the federal government collected approximately $2.1 trillion in tax revenue. Primary receipt categories included individual income taxes (43%), Social Security/Social Insurance taxes (42%), and corporate taxes (7%).[6] Other types included excise, estate and gift taxes. Tax revenues have averaged approximately 18.3% of gross domestic product (GDP) over the past 40 years, generally ranging plus or minus 2% from that level.[7]

Tax revenues are significantly affected by the economy. Recessions typically reduce government tax collections as economic activity slows. For example, during FY2009, the U.S. government collected about $400 billion less than FY2008. Individual income taxes declined 20%, while corporate taxes declined 50%. At 15% of GDP, the 2009 collections were the lowest level of the past 50 years.

http://en.wikipedia.org/wiki/United_States_federal_budget

Ken, do you not think this is part of the problem?



KenDckey -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 1:39:26 PM)

Of course it is.   Revenue will drop when you have increased unemployment.   People aren't making as much money so they aren't paying as much in taxes.   Basic math.  What the govt is trying to do is increase its spending to compensate.   So they borrow more money, which makes us pay more interest so they borrow to pay the interest so they pay more interest and it never stops.   Like I said, I disagree with some of the recommendations of this report, but I recognize that is to bad for me.   I dno't agree with everything my wife does either   LOL   But I do believe it is a significant start if Congress will get off it's ass and go to work doing the publics work instead of worrying about getting re-elected.   (seems to me that the media is already projecting the 2012 election which has to be pushed from someplace but I doubt the average Joe Taxpayer cares right now so I think it is being pushed from congress and the white house)



tazzygirl -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 1:48:48 PM)

Question.. and its an honest one... why are corporate taxes only 7%?



mnottertail -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 1:53:02 PM)

FR regarding spending:

It is irresponsibly premature to accuse the conservatives (rinos, republicans, neo-cons, and nutsuckers) of fiscal responsibility now or at some future time; simultaneously, it is irresponsibly inaccurate to accuse them of fiscal responsibility in the past.



KenDckey -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 2:20:13 PM)

Tazz   I have no clue.   You'd have to ask some congressmen   LOL  the only thing I can suggest is they collectively bought congress (all of them that voted yes and no I have no clue who they are either)



KenDckey -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 2:21:45 PM)

quote:

ORIGINAL: mnottertail

FR regarding spending:

It is irresponsibly premature to accuse the conservatives (rinos, republicans, neo-cons, and nutsuckers) of fiscal responsibility now or at some future time; simultaneously, it is irresponsibly inaccurate to accuse them of fiscal responsibility in the past.


Not exactly sure how this compares to Bi-Partisan done completely this year (started on Jan 11, 2010)  where the co-chairs were republican and democrat.  You gotta explain that to me.



mnottertail -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 2:25:24 PM)

Consider the Grace report (and more) in Reagans time and where we are today. I did a thread on it, it fell flat (of course)



DomKen -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 2:27:17 PM)

There have been anumber of interesting proposals in regards reducing the deficit. A lot of the Domenici and Rivlin plan has merit although I do think they put too much burden on the poor and middle class while continuing to excuse the upper class from paying for the deficit they created.

Ending the Bush tax cuts across the board is a good first step. Getting rid of the capital gains tax and simply treating capital gains as ordinary income is a reform that would simplify the tax code greatly and result in a more progressive tax.

The biggest place for spending cuts is in defence. Simply cutting programs forced on the Pentagon by Congress would save many billions. Eliminating the absurd contracting out of things like food prep that the military used to do in house cheaper and more effeciently is another savings with little downside. It is also time to take a hard look at the number and size of military bases over seas, we really have little need for much of the Army and Air Force to be stationed in Germany anymore.



KenDckey -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 2:36:32 PM)

Ken   I agree with some of what you say.    And they have already downsized Europe, Korea and other places overseas greatly.  

As of March 31, 2008, U.S. armed forces were stationed at more than 820 installations in at least 135 countries.[18] Some of the largest contingents are the 50,000 military personnel deployed in Iraq, the 71,000 in Afghanistan, the 52,440 in Germany (see list), the 35,688 in Japan (USFJ), the 28,500 in Republic of Korea (USFK), and the 9,660 in Italy and the 9,015 in the United Kingdom respectively. These numbers change frequently due to the regular recall and deployment of units. Altogether, 77,917 military personnel are located in Europe, 141 in the former Soviet Union, 47,236 in East Asia and the Pacific, 3,362 in North Africa, the Near East, and South Asia, 1,355 are in sub-Saharan Africa with 1,941 in the Western Hemisphere excepting the United States itself.
http://en.wikipedia.org/wiki/United_States_armed_forces
When I was in Europe in the late 70's there were several hundred thousand troops.   Now is under 80,000.   I do know that the barracks I was in (Frankfurt) was returned to Germany and has been demolished.  The Barracks I was in in Berlin has been returned to Telefunkin and my old office returned to the subway system (don't ask   lol   long story)






KenDckey -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 2:47:11 PM)

http://www.armscontrolcenter.org/policy/securityspending/articles/072809_c111_fy10_hac_hr3326/

Hey Ken   This site has what seems to be a reasonable analysis of the 2010 budget and it's billions of unrequested congressional demands.



DomKen -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 2:59:30 PM)


quote:

ORIGINAL: KenDckey

http://www.armscontrolcenter.org/policy/securityspending/articles/072809_c111_fy10_hac_hr3326/

Hey Ken   This site has what seems to be a reasonable analysis of the 2010 budget and it's billions of unrequested congressional demands.


According to that site it looks like Congress added at least 2.5 Billion dollars that the Pentagon didn't ask for. Just cutting it out won't eliminate the budget but it is a reasonable place to start.



KenDckey -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 3:06:01 PM)

Military has been saying that for years.  Long before I retired in 86



Fellow -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 4:23:43 PM)

The first thing to do should be getting the financial sector functional and in order. Dodd-Frank bill does not do it. Without this the deficit reduction plans are meaningless. They try to pay debt that in principle can not (and should not) be paid.



AnimusRex -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 5:52:19 PM)

Here is a graphic showing the budget deficit, and its causes.

[image]local://upfiles/280232/6C4B0691531648169A565FC18BB02569.jpg[/image]



AnimusRex -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 6:02:09 PM)

And here is a grpah showing the various proposals to "enhance" Social Security.

And so my question would be, why is the biggest single cause of the deficit- the ginormous orange swatch on that first graph- not suggested as a method to help balance the budget?



KenDckey -> RE: Bi-Partisan Debt Reduction Report (11/23/2010 6:42:40 PM)

quote:

ORIGINAL: AnimusRex

And here is a grpah showing the various proposals to "enhance" Social Security.

And so my question would be, why is the biggest single cause of the deficit- the ginormous orange swatch on that first graph- not suggested as a method to help balance the budget?


Because they looked at the entire system and didn't focus on one thing.   Look at recommendation 3 starting on page 15 of the original report
quote:


3. Create a Simple, Pro-growth Tax System
• Cut tax rates; broaden the tax base; boost incentives to work, save, and invest; and ensure, by 2018, that nearly 90 million households (about half of potential tax filers) no longer have to file tax returns.
 Cut individual income tax rates and establish just two rates – 15 and 27 percent – replacing the current six rates that go up to 35 percent.
 Cut the top corporate tax rate to 27 percent from its current 35 percent, making the United States a more attractive place to invest.
 Eliminate most deductions and credits and simplify those that remain while making them better targeted and more effective.
 Replace the deductions for mortgage interest and charitable contributions with 15 percent refundable credits that anyone who owns a home or gives to charity can claim.
 Restructure provisions that benefit low-income taxpayers and families with children by making them simpler, more progressive, and enabling most recipients to receive them without filing tax returns.

source:  http://bipartisanpolicy.org/sites/default/files/FINAL%20DRTF%20EXECUTIVE%20SUMMARY_0.pdf



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