Forgotten Budget
With all the hoopla over the Super Bowl, and anger over some cartoons, there has been very little attention in the media over the President's 2.7 trillion dollar budget proposal. There has been some TV coverage of it, but not much, and most of the print media has moved it back in the paper because of other things.
It's something that I hope starts getting more attention in coming weeks and months, as Congress begins deliberating on the President's budget, and finally, producing the real one.
For those who need a refresher, what the President of the US really submits is a wish list, not a budget. It's a proposed outline, but not specific. The Constitution gives the responsibility for the actual budget to Congress. The House has to orginate all of the spending bills. The House can, in fact, toss whatever came to them from 1600 Pennsylvania and start from scratch if they wish. This might be the year to try it.
Robert Samuelson has a great piece on the budget, and the future of our budgets in today's Washington Post. He gives pretty much equal time to destroying a number of myths about both Bush budgets, and Clinton's balanced budgets, and both parties reluctance to actually deal with the budget.
He beats up on Bush over the idea of making the tax cuts permanent, and how eventually we will have to pay for the extra spending we've been doing. Some of it, Samuelson says was necessary (Defense and Homeland Security) other spending could have been avoided. He's right on that.
He's also correct that we'll have to pay for the deficits some how, some time. And with 'boomers' coming of retirement age, that won't get easier in the future.
His beating on Clinton is just as good, claiming Clinton's policies had less to do with balanced budgets (which he never called for, the GOP did in 1994) than did the good luck of an economic boom he didn't create and the end of the Cold War.
He's even truthful about where the majority of the tax cuts went, and what we need to do, at the expense of both parties:
Here are a couple of suggestions, that will piss off one group or another.
Raise the cap on social security contributions. The $80,000 number is too low. We keep hearing how "the middle class" is being hit by the Alternative Minimum Tax, because they have combined six figure incomes. If that's the case, the Social Security contributions level should be raised, so that those in the upper brackets are paying more into a system they can draw out of.
Medicare taxes need to go up to pay for the prescription drug benefits. It doesn't have to be a bunch, but with all the hype last year over saving Social Security, we forgot Medicare goes broke much earlier. The new drug benefit accelerates that problem.
The ATM does need to be fixed so it quits hitting so many who aren't "the rich" it was designed to catch avoiding taxes.
Some of the crazy deductions (vacation homes, huge business expenses) could also be throttled back quite a bit.
The truth is, if we, as a country want to keep up Social Security, Medicare, and other safety net programs, have a decently equipped and paid military, and the other niceties of a civilized world we do have to pay for it.
What are your ideas on how to do it, and reduce a $350 Billion deficit?
It's something that I hope starts getting more attention in coming weeks and months, as Congress begins deliberating on the President's budget, and finally, producing the real one.
For those who need a refresher, what the President of the US really submits is a wish list, not a budget. It's a proposed outline, but not specific. The Constitution gives the responsibility for the actual budget to Congress. The House has to orginate all of the spending bills. The House can, in fact, toss whatever came to them from 1600 Pennsylvania and start from scratch if they wish. This might be the year to try it.
Robert Samuelson has a great piece on the budget, and the future of our budgets in today's Washington Post. He gives pretty much equal time to destroying a number of myths about both Bush budgets, and Clinton's balanced budgets, and both parties reluctance to actually deal with the budget.
He beats up on Bush over the idea of making the tax cuts permanent, and how eventually we will have to pay for the extra spending we've been doing. Some of it, Samuelson says was necessary (Defense and Homeland Security) other spending could have been avoided. He's right on that.
He's also correct that we'll have to pay for the deficits some how, some time. And with 'boomers' coming of retirement age, that won't get easier in the future.
His beating on Clinton is just as good, claiming Clinton's policies had less to do with balanced budgets (which he never called for, the GOP did in 1994) than did the good luck of an economic boom he didn't create and the end of the Cold War.
He's even truthful about where the majority of the tax cuts went, and what we need to do, at the expense of both parties:
It's easier to cling to those self-serving delusions. The Democrats rant about eficits and tax cuts for the super-rich. Actually, in 2005 the tax cuts equaled about 60 percent of the deficit, and about 60 percent of the tax cuts went to those with average incomes of less than $103,000. The Republicans proclaim that the economy depends on the tax cuts. A few years ago, that might have been true. But at this stage of the business cycle (unemployment: 4.7 percent), big deficits risk aggravating inflation. If Bush can't cut spending, he should be raising taxes.I don't generally agree with folks who say "raise taxes", I already pay enough, and am in a bracket that would probably get whacked pretty good. But Samuelson is right, if Congress and the President don't have the nerve to cut spending where it needs to be cut, they have to pay for it somehow.
Here are a couple of suggestions, that will piss off one group or another.
Raise the cap on social security contributions. The $80,000 number is too low. We keep hearing how "the middle class" is being hit by the Alternative Minimum Tax, because they have combined six figure incomes. If that's the case, the Social Security contributions level should be raised, so that those in the upper brackets are paying more into a system they can draw out of.
Medicare taxes need to go up to pay for the prescription drug benefits. It doesn't have to be a bunch, but with all the hype last year over saving Social Security, we forgot Medicare goes broke much earlier. The new drug benefit accelerates that problem.
The ATM does need to be fixed so it quits hitting so many who aren't "the rich" it was designed to catch avoiding taxes.
Some of the crazy deductions (vacation homes, huge business expenses) could also be throttled back quite a bit.
The truth is, if we, as a country want to keep up Social Security, Medicare, and other safety net programs, have a decently equipped and paid military, and the other niceties of a civilized world we do have to pay for it.
What are your ideas on how to do it, and reduce a $350 Billion deficit?
posted by Crazy Politico at 5:28 PM
2Comments:
A big chunk of the problem is unnecessary entitlements and inefficiency. We have lot of redundancy in our bureaucracy and a lot of just plain waste. Getting rid of the pork and the inefficiency would be a big step in the right direction.
Definitely agree on the pork. There was something like 53 billion spent on "earmarks" last year, which is nuts.
You've seen the fits the government unions are having about the new performance pay systems, right? Getting rid of inefficiency in government is tough, and the entrenched interest groups make it tougher.
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