Your 2010 Entitlement Commission
The combination of egomania, self-righteousness, irresponsibility, and cowardice that characterizes many United States Senators is pretty hard to take. For example, instead of doing their jobs, this gang wants to pretend that they’ll force the United States to default on its debt unless a commission of other people is appointed to propose cutting Social Security and Medicare:
“You rarely do have the leverage to make a fundamental change,” said Senate Budget Committee Chairman Kent Conrad (D-N.D.), who said he hasn’t ruled out offering the independent commission legislation as an amendment to the healthcare reform bill. [...]
Among its chief responsibilities would be closing the gap between tax revenue coming in and the larger cost of paying for Social Security, Medicare and Medicaid benefits. The Government Accountability Office recently reported the gap is on pace to reach an “unsustainable” $63 trillion in 2083. [...]
But before Tuesday’s hearing was over, Sens. Conrad, Gregg, Evan Bayh (D-Ind.), Dianne Feinstein (D-Calif.), Mark Warner (D-Va.), Joe Lieberman (I-Conn.), George Voinovich (R-Ohio) and Jeff Sessions (R-Ala.) publicly vowed to vote against raising the debt ceiling if a budget reform commission bill doesn’t come along with it.
Why not throw it back at this crew? Tell the Irresponsible Threat Caucus that instead of asking for a commission, they should just start calling themselves a “budget commission” and then they can specify their own proposed set of tax hikes and Medicare cuts.
Note that Senators Gregg, Bayh, Voinovich, and Sessions didn’t have these concerns about the budget when voting to give hundreds of billions of dollars in tax cuts to the children of multi-millionaires. And I continue to await congressional support for making the war in Afghanistan deficit neutral.
30 Responses to “Your 2010 Entitlement Commission”
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November 12th, 2009 at 8:45 am
Part of me doesn’t really mind that they are making this threat, since there’s no realistic scenario where they actually go through with it. Trying to pretend that the debt ceiling isn’t going to be raised is the ultimate empty threat, I think.
Of course, another part of me does mind this, since the sort of measures they are calling for are already available. They are acting like the solution to the problems facing Social Security and Medicare and the general fund are some sort of huge fucking mystery. Social Security’s problems are much smaller in scale and can be dealt with, if they are really as bad as some predict, which is far from guaranteed, through a combination of benefit changes and tax increases. Medicare’s problems could probably be solved in large part by changing the fee for service structure and any other design issues that reward unnecessary treatment. Bringing the general fund back into relative balance is trickier, since the cuts that need to be made, like those from the defense budget, and the revenue increases, like from personal income taxes, are probably harder to pass. But really, chop $50 billion a year from the defense budget and add on a small financial transaction tax that nets us $100 billion a year in extra revenue, and we’ve already gone down $1.5 trillion or so from where we were.
As far as I understand it, nothing except their inability to stand up to certain lobbies–and the Republicans wish to not give the Democrats any legislative successes–is standing in the way of making these changes.
On a somewhat related note, if I can speculate for a moment, I’ve often wondered if the relative lack of cost controls in the health care reform bills is due to Obama thinking long. Imagine that reform passes, and while the costs aren’t out of control, they are larger to what they would otherwise be. Considering that the budget is already on a bad path, in a few years, this could force congress to stop delaying the issue and actually pass meaningful budget cuts and tax increases.
November 12th, 2009 at 8:47 am
How about instead of making demands on Pelosi, just pass one fucking bill about something?
The House has done climate change and health care while the Senate has done absolutely nothing since the stimulus. What do we pay these assholes for?
November 12th, 2009 at 8:48 am
So? What exactly do we pay them for? Arn’t they “the purse of America”? Can I get the money back that we pay those cowardly harlots who plainly admit that they are too busy taking special interest bribes to do the job we are paying them to do?
November 12th, 2009 at 8:55 am
If you want your wars deficit neutral, you really have to invade, occupy, plunder, sack and loot richer countries. It might have worked in Iraq if the US took the oil (and maybe some antiquities), but what kind of booty can you expect to haul from Afghanistan? Opium? Rocks? It’s really not fertile ground for a cost-effective war.
November 12th, 2009 at 8:58 am
Jimmy-you cut other defense spending to fund Afghanistan.
November 12th, 2009 at 9:07 am
I’m sure MY recently had a post up endorsing the idea of appointing commissions to work out details of policy because congressmen weren’t very good at it. I thought he was wrong – congressmen should do their job and if they’re not good they should learn or be replaced – so hopefully this means Yglesias has changed his mind. Or is he just pissed off witht the stupidity of the threat? Or dislike the general policy plan?
November 12th, 2009 at 9:15 am
While the motives of these people is despicable that does not mean that we, I mean the US Treasury, do not have a gigantic problem. While it is true that other nations and even the US in WWII had a higher public debt/GDP ratio never has a nation had their gigantic borrowing needs stretch before them endlessly. Few serious observers believe that the Treasury will not have to borrow around $2 trillion a year for the next several years.
There is an almost universal cognitive black hole when it comes to Treasury borrowing. That being that it just sort of happens. That there is no mechanism involved. The money just appears to buy up the Treasury bills notes and bonds, end of story. This is not the way the world works. At the long end, that being notes and bonds longer than 3 year duration the price the Treasury has had to pay has risen since March when the Fed announced it was going to monetize aggressively long dated Treasury paper. In addition they have been monetizing mortgage backed paper and the sellers of that usually plow the money into Treasuries. So despite the fact that the Fed has printed now about $800 billion dollars which directly or indirectly went into buying new Treasury issues there was not enough demand to keep rates low.
If it was not for the Fed monetizing and foreign central banks buying Treasuries it is likely that long term Treasury rates would be much higher and an absolute failure of an auction would not have been out of the question. What does that mean? It means the Treasury might have had an empty checking account so couldn’t issue checks. Not because the legal debt ceiling had been reached but because a practical debt ceiling had been reached.
To call the sales of Treasury bonds a market, when the majority of buyers are central banks who often print the money to buy it is a joke. That is why the dollar is falling, why gold and commodities and equities are rising. The markets are in essence fleeing what has been the worlds benchmark financial asset, Treasury paper. As the Treasury struggles to borrow over $100 billion a month, month in month out for the next several years,the likelyhood that they will fail or that rates will rise perhaps sharply becomes highly probable.
The entire world now thinks that the US is declining on a relative and absolute basis because of policy, the general structure of the economy and demographics. Tax receipts contine to fall on a year over year basis as outlays expand, which of course is the cause of the Treasury borrowing needs but think about it from the outside. Is it a good investment to buy Treasuries when your convinced America is going to be unable to pay it back without printing or inflation?
The Treasury deficit as it stands today is serious but manageable, it seems. But the mechanism to continue borrowing huge amounts month after month could break down. This is the real fundamental issue behind the preening deficit hawks. Forget their political motives. We have a real problem.
November 12th, 2009 at 9:28 am
I am increasingly coming to the conclusion that Obama should give these morons in Congress what they say they want: a balanced budget, smaller government, and lower taxes.
Why not just propose a budget that kills the Dept. of Education, NIH, NASA, CDC, any foreign aid including money to Israel, etc., and lowers Defense spending to $100 billion a year. Let’s just have a government that is only capable of defending the shores of the US from invasion by a military force, builds a few roads now and then, and pays off our debt and other obligations like Social Security.
The kicker is that you accompany this proposal with a massive tax cut that gets bigger as the debt gets paid back. Oh, and you propose that on everyone’s paychecks we start to itemize where their tax dollars are going.
Then tell Congress that if they want to restore funding for a war or for the massive Texas/Florida jobs program that is NASA, that they have to explain to the American people why they need to pay taxes for that.
Let’s just tear the whole thing down and start over again.
November 12th, 2009 at 9:36 am
Easy money: lift the income cap for SS contributions so even the well-off and rich pay what I pay, and adjourn the meeting.
November 12th, 2009 at 10:00 am
Maybe one way to address this problem would be to pass a health care reform squeezing the profits of insurers, private hospitals and pharma corporations? If only Senators were in a position to do something like that!
November 12th, 2009 at 10:32 am
So, they want to outsource the legislative branch to an appointed body.
And of course, the only Republicans that are demanding that we disband Congress are retiring in 2010 (or from Alabama).
November 12th, 2009 at 10:46 am
[...] these funds might be semi-corrupt pork barrel projects designed to persuade key legislators to stop threatening the country with a debt default and start voting “yes” on key legislation. We could build a giant golden calf in [...]
November 12th, 2009 at 10:55 am
“I am increasingly coming to the conclusion that Obama should give these morons in Congress what they say they want”
I kind of like this. Obama should present a balanced budget that increases funding for everything he (OK, since this is a thought experiment, “I”) wants and cuts everything else to the bone or eliminates its funding entirely. Starving artists will live like investment bankers, the BBC will be driven out of business by its superior American competition, and poor kids in the inner city will get three nutritious meals a day and quality student-focused education from the moment they leave the cradle. Oh, and Social Security benfits will increase, and we will have universal, single-payer health care.
In other words, bring it Bayh, you stupid bitch.
November 12th, 2009 at 11:03 am
I’d settle for foreign wars being revenue neutral for Dianne Feinstein at this point…
November 12th, 2009 at 11:18 am
Hummpf. Starting today I will refuse to do any work, unless my boss appoints a commission that will do all my work for me.
November 12th, 2009 at 11:36 am
Wars and military spending don’t count. It’s not real money. And you hate America.
The only way to spend money is cut anything that the government does to assist poor and regular folk.
Anything going to the uppermost classes and the military contractors and to warfighting is free and paid for by fairy money.
The end.
November 12th, 2009 at 11:43 am
On what planet can a central bank buy a US Treasury with anything other than US Dollars? Money has been fleeing TO US Treasuries since the beginning of this crisis, and the fact that interest rates have remained low and there has been no inflation seem to be uncomputable to concern trolls as yourself.
I do think people buying treasuries now are foolish and adopting herd behavior, and that they may at some point in the next few years come to their senses, but the government would be the greater fool to not exploit investor’s flight to quality.
The US government, will borrow right up to the moment they can’t afford it, full stop. And right now the market is sending no signal that they want lending to the US government to stop.
November 12th, 2009 at 12:18 pm
closing the gap between tax revenue coming in and the larger cost of paying for Social Security, Medicare and Medicaid benefits
Matt, I thought you were going to point out that the “gap” between tax revenue and entitlement expenditures is actually that tax revenue is HIGHER. The SS trust fund uses its surplus to buy treasuries and thus finance the general fund budget deficit. So when the highly responsible, sober, and serious members of the pain caucus gather to wring their hands about the longterm ill health of entitlements, they could start by making the general fund able to repay its obligations to the entitlements rather than by reducing the cost of the entitlements. But that would require things like reductions in military spending and increases in inheritance taxes.
November 12th, 2009 at 12:34 pm
There is no excuse for Dianne Feinstein. Could she at least run for governor or something, if only to get her out of the Senate and replace her with someone more like Boxer? I think she and Jerry Brown are about the same age.
November 12th, 2009 at 1:01 pm
Regardless of the repulsiveness of many of the dipsh1ts supporting the idea, endless deficits are not good political fodder, and won’t sell as a political anthem. there are 3 branches of government, and half of one is a wholly owned subsidiary is owned by the Banks/Wall St. They already got their handout, now they need to lock down the Treasury so that their own pile o cash is not devalued.
November 12th, 2009 at 2:00 pm
Never trust a blue ribbon commission. It is government by upper class conventional wisdom. The Commission on the 21st Century Economy, the blue ribbon panel on tax reform created by Schwarzenegger and the CA Legislature, came up with the following solutions:
Reduce the top income tax rate by 30% (reduction from 6 brackets to 2)
extend sales tax to services through a net receipts tax
So instead of tackling difficult issues such as Proposition 13, budgeting by initiative or the supermajority required to raise taxes, the commissioners produced a plan that would shift the tax burden from the wealthy toward the poor and middle class.
November 12th, 2009 at 2:16 pm
“Easy money: lift the income cap for SS contributions so even the well-off and rich pay what I pay, and adjourn the meeting.”
The well-off and rich draw most or all their income from sources that are not exposed to FICA. Lifting the income cap taxes some of Matt’s favorite basketball players and most of the policy people he pals around with, and incidentally every Congressional salary, while giving hedge fund billionaires a free pass.
Cap increases are feel-good progressivism whose incidence falls in entirely differnt places than proponents suggest it does. Instead of selectively taxing millionaire entertainers and policy professionals why not simply tax total income across the board of people earning a million a year or more? Say like the House Bill does?
November 12th, 2009 at 2:26 pm
Conrad-Gregg is just a front for the Peterson crowd. Look at the witness list for the hearing last Tuesday, it was drawn from the Brookings/Heritage PGP backed fiscal working group, itself entirely focused on slashing ‘Entitlements’
A group of eight staff alumni of the 1982-83 Greenspan Commission drafted the following statement for submission to that hearing Tuesday. Since then two more have joined. The effort is being headed up by Nancy Altman, who was Greenspan’s Exec Asst on the Commission and she has asked to get this out to the blogosphere. This Google Doc should display. (If not it is posted at our blog)
http://docs.google.com/Doc?id=dc36qc9g_1crqqnpdt&btr=EmailImport
November 12th, 2009 at 2:50 pm
Too many of these folks just don’t seem to regard their election as entailing the responsibility to make tough decisions. They just ensconce themselves in power and devote themselves to remaining there. They make me miss GWBush’s declaration: “I’m the decider”! Not that I agreed with the decisions he made, but he at least owned up to it!
November 12th, 2009 at 6:08 pm
[...] Matt Yglesias rightly calls out these lawmakers for their “egomania, self-righteousness, irresponsibility, and cowardice”: Why not throw it back at this crew? Tell the Irresponsible Threat Caucus that instead of asking for a commission, they should just start calling themselves a “budget commission” and then they can specify their own proposed set of tax hikes and Medicare cuts. [...]
November 12th, 2009 at 7:02 pm
Wars and military spending don’t count. It’s not real money. And you hate America.
The military is funded with rays of sunlight and the smiles of kittens.
Why do you hate kittens?
November 13th, 2009 at 12:05 pm
[...] week, we’ve already seen a group of senators threaten to force the U.S. to default on its debt (by refusing to increase the federal debt ceiling), if they don’t get a bi-partisan [...]
November 13th, 2009 at 1:46 pm
[...] would buy substantial fiscal breathing room. It’s absurd for politicians to be simultaneously engaged in highly public deficit hand-wringing and not talking about the fact that maybe we can’t afford these “predictable” [...]
November 13th, 2009 at 4:50 pm
most of the people here understand the dishonesty of the commission proposal.
but you may not quite understand that social security doesn’t really need any more money at all… if the government pays back the money it borrowed FROM social security. and if as our life expectancies increase we are smart enough to save — via the payroll tax– an extra 20 cents per week per year per worker.
even the large projected increase in Medicare is just the cost of medical care. without Medicare, who is going to pay for your medical care? the projected absolute cost of Medicare in the future is far less than the projected absolute increase in incomes. So that workers in 2083 will have twice as much money after paying their increased payroll tax as they have today, AND they will have their longer retirements and more expensive medical care paid for in advance.
this is not “government spending.” it’s simply the people paying in advance for their own needs using a mechanism that protects them from inflation.
there is no reason they cannot continue to pay the cost of those programs forever…. everyone who pays in gets his money back when he needs it. or more.
finally, whatever the problems the government faces in borrowing more money, the answer is to raise taxes to pay for the stuff the government buys, not cut the only programs that the people directly get what they pay for.
so not only is the commission idea dishonest, it is designed to continue the confusion that people have about “future burdens” from “entitlements.” you need to understand the details if you are going to stop them. try starting with the NASI website.
November 13th, 2009 at 9:17 pm
Why are the wars and the military left out of these discussions on the federal budget. These expenditures have no income stream. Zip. They are both drains on the spending side. Social Security should have about $2.5 trillion in its Trust Fund. That is what is to be used to supplement it income until about 2035, which is a long way out there. But if we continue to wage two wars and continue to fund the military and all its tenacles there will be no ending the increasing federal debt. Stop the war expenditures and reduce the military spending and we have a chance to return to a balanced annual budget of the past. Social Security and Medicare are NOT the problem!