There is only one piece of good news with regard to Jeff Miller, and that is that he must stand for election next November and thus we can vote him out.
On Monday, President Obama released a plan for deficit reduction that pushes an agenda of tax increases and lacks serious reforms to entitlements, rather than putting forward a bipartisan proposal for putting America back on a path to fiscal prosperity.
That’s correct, Obama’s “plan” is a scam. But this sort of misdirection belies the fact that Miller’s ideas are also a scam. This is the common polit-speak of the polished turd found in our “Conservative” party. Shall we explore?
After months of negotiating with Republicans on a compromise to reduce the deficit, the President took a turn toward more liberal ideals this week. Unfortunately, the American people are left holding the bag, waiting for a President who promised compromise, but offers none. His plan for deficit reduction is based on worn-out ideas and faulty economics, instead of job creation and spending cuts. These proposals could not pass when Democrats controlled both Houses of Congress, and they will not pass now.
Well then I’m sure you can point to actual spending reductions (that is, below the level of last year’s spending) in your plans, right Mr. Miller? Oh wait – you can’t. In fact, Ryan’s plan along with the others increased social spending, with one of those “plans” increasing Social Security spending fifteen percent in each of the first two years.
Take, for example, the Administration’s proposals for Medicare and Medicaid. For over a year, Republicans and Democrats have agreed that these two entitlement programs need fundamental reform to keep them viable for the next generation of Americans. We disagree on the nature of this reform, but at minimum, we agree reform is needed. However, in these programs which will collectively spend $10 trillion over the next decade, the President’s plan calls for only $320 billion in savings, a roughly three percent savings.
Ok, so what is your plan? I will remind you that both you and Mr. Southerland stood before a room full of voters a couple of months ago and told us that nobody over 50 would see a change in Social Security or Medicare. Yet this group of people is the very group of people bankrupting the system – the boomers. It is the demographic disaster that cannot be changed (short of killing them all, of course) that is driving the problem. You and Mr. Southerland didn’t like being called on that, probably because half of the people in the room that evening were retired.
But that you didn’t like it, and refused to address the facts, doesn’t change them.
The Medicare and Medicaid cuts would not even cover the size of the “doc fix” that Congress must pass to prevent a 30 percent cut to doctors at the end of the year. The President’s plan assumes the doc fix will be signed into law at a cost of $370 billion, but does not suggest a way to pay for the permanent change. Furthermore, the proposal avoids any changes to the Medicare benefit until after 2017, conveniently timed with the end of a second term in office. Between now and 2017, all of the proposed savings are on the provider side of the equation, including new price controls on pharmaceuticals and cuts to hospital reimbursements, on top of the Medicare cuts found in the President’s 2010 health care bill. This is not the structural reform needed to shore up a system that even the President’s Chief of Staff said will run out of money in five years. These are simply tweaks to a system that is fiscally unsound and will do little to actually reduce the deficit in the future.
So what structural reform are you proposing Mr. Miller? Please be specific, and keep in mind the above demographic fact, because I intend to tattoo it on your forehead at every opportunity from now until the election.
In addition, I disagree with President on tax increases. Instead of proposing a comprehensive tax system overhaul, as House Republicans have offered again and again, the President’s proposal takes aim squarely at the country’s job creators in the middle of an already lengthy period of high unemployment rates. His deficit reduction plan would allow the 2001 and 2003 tax cuts expire for wealthier Americans, many of whom are small business owners. It reduces the value of itemized deductions to 28 percent, striking a huge blow to charities across the country. It creates a type of alternative minimum tax for those who make over $1 million a year, called the Buffet Rule after billionaire Warren Buffett. And yes, it eliminates depreciation rules for corporate airplanes and subsidies for oil and gas companies.
Ok. I happen to believe that tax increases are not going to solve the problem, but for a different reason. We’ll get to that.
I happen to agree with the President that Warren Buffet should not pay a lower tax rate than his secretary. However, the facts do not bear this situation out. The claim that the wealthiest Americans pay less in taxes than middle-class Americans is class-warfare at its finest and moreover, simply not true. In reality, the top 10 percent of earners pay nearly 70 percent of all income taxes, according to the IRS. The IRS also reports that those making over $1 million pay 24.4 percent of their income in federal income taxes. Those making between $100,000 and $125,000 pay 9.9 percent, and those making $50,000 to $60,000 pay 6.4 percent. The Tax Policy Center estimates that 46 percent of tax filers will pay no federal income tax this year.
These numbers are not a defense of tax cuts for corporate jet owners or the rich. They simply show that the President’s basis for tax hikes on job creators are misguided and are only being used to pay for more federal spending. The ratio of tax increases to health care entitlement reforms in his plan is five to one ($1.5 trillion versus $320 billion). The plan then counts $1 trillion in “savings” from ending the wars in Iraq and Afghanistan, which are scheduled to end regardless and should not be counted in deficit reduction savings. With other entitlement changes and fees included, the President’s proposal then includes the $1 trillion in cuts already achieved in the Budget Control Act to reach a target reduction of $4 trillion.
President Obama said it best when announcing his proposal, “It’s math.” Unfortunately, the Administration needs to work on its addition and subtraction. Instead of adding new taxes and fees, we need to be adding jobs. Instead of punting on entitlement reform, we need to start subtracting from the deficit by making major reforms to Medicare and Medicaid. The President’s plan does neither. I hope the President will come back to the table and work with Republicans on our plan to create jobs and to reduce the national deficit.
You have no plan to do that either. As I said, we’ll get to that.
House Republicans have put forward a plan to reduce the deficit significantly without halting job growth by imposing tax increases. We started with the Republican budget, passed by the House in April, which would reduce and freeze domestic spending, would protect the future of Medicare and Medicaid while making sensible reforms, would shore up Social Security, and would lower both the corporate and individual tax rates.
These are impossible contradictions. The Federal Government expanded in size at a roughly 7% rate over the last decade. The economy expanded at roughly 4% rate. The difference, plotted out over 100 years, looks like this:
You don’t really think that’s going to happen, do you? After all, the government can’t grow to a greater size than the economy is – that’s impossible. So let’s see… where does that happen?
Oh, about right at 50 years hence.
So when are you going to stop lying to the American public Mr. Miller? Never mind that this assumes a 4% GDP growth rate, which is entirely unrealistic given the debt load in the economy today.
Over the summer, House Republicans put forward the Cut, Cap, & Balance plan to cut spending now, cap future spending, and pass a balanced budget amendment to the Constitution. Some of the Cut, Cap, and Balance plan made it into the Budget Control Act signed into law in early August. Federal spending was cut by almost a trillion dollars. In addition, Congress is forced to make at least an additional $1.2 trillion in cuts by Christmas and is required to vote on the Balanced Budget Amendment.
Cut, cap and balance “cut spending” from baseline figures, which were in fact no cut at all. A cut is a reduction from last year’s numbers, not some automatic escalator.
Most importantly, nothing in our plan for deficit reduction and job creation includes tax increases. In fact, tax rates would be lowered for all Americans, and the tax code would be more simple and fair. Our Plan for America’s Job Creators allows businesses to create jobs by putting in place a system without over-burdensome regulations or high taxes. Senate Democrats and the President need to work with us to pass these reforms now to get our economy moving again. There is too much uncertainty and businesses are waiting on the sidelines to see how much they will have to pay in taxes, how much health care the government will mandate they purchase, and how many new regulations the Administration will enforce. Congress and the President need to come to the table, pass a plan that will cut federal spending, reduce the deficit, and provide jobs to the millions of unemployed Americans who are tired of Washington inaction on the issues that matter most.
Your “plan” is mathematically bankrupt.
The facts are this: Withdrawing deficit spending by either tax increases or actual spending cuts will cause GDP to decrease. This is because GDP = C (consumption) + I (private investment) + G (government spending) + [x – i] (net exports)
If you cut government spending (“G”) then GDP must decrease dollar for dollar.
If you raise taxes then “C” or “I” must decrease dollar for dollar, because each dollar you take in taxes is one that the person you tax cannot spend on either consumption or investment.
This is literal second-grade math and you insult the intelligence of the voters in your district, not to mention everyone else, when you refuse to address this point, exactly as you did at the Town Hall meeting.