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Millionaires would like you to reduce the deficit

President Obama created the bipartisan National Commission on Fiscal Responsibility and Reform to look at ways to reduce the federal deficit. The charge of the commission is to “…propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015.” The Commission has been dubbed the Catfood Commission by many because implementation of its draconian cuts to the social safety net would leave many seniors and retirees with only one viable source of nutrition.

The commission is co-chaired by two millionaires, Erskine Bowles, former chief of staff to President Clinton, who earned $335,000 last year as a member of the board of directors for Morgan Stanley and former Senator Alan Simpson of Wyoming. Simpson has called Social Security a “milk cow with 310 million tits.” and who angered military veterans by claiming that they “are now, in a way, not helping us to save the country” because they aren’t willing to give up what they earned during their service. The staff of the deficit commission is largely made up of corporate lobbyists who bring their own agenda.

So, it came as no real surprise this week when the two committee chairmen released their preliminary plans for solving the budget crisis by balancing the budget on the backs of the middle class while giving more tax breaks to the wealthy and corporations. Among the ways these two would reduce the deficit;

  • Increase the Social Security retirement age to 70: This may sound like a reasonable plan if you are a board member of Morgan Stanley, or a Wall Street stock analyst, but maybe not so much if you are a 65-year old rancher with a bad back or a miner, day laborer or steelworker who has been used up by a lifetime of hard labor. The reality is that “people” are not living longer, “rich people” are living longer,

…the top half of the average relative earnings distribution has experienced faster mortality improvement than has the bottom half. Specifically, male Social Security–covered workers born in 1941 who had average relative earnings in the top half of the earnings distribution and who lived to age 60 would be expected to live 5.8 more years than their counterparts in the bottom half.”

And by the way, Social Security was not among the mandates for the Commission to look at since it does not add to the deficit, is still solvent and is prohibited by law from paying out more than it brings in.

  • Cut the federal workforce by 10% and freeze wages: No mention of ways to cut the responsibilities or workload for federal workers.
  • Increase the federal gasoline tax by 15 %
  • Lower the corporate tax rate: In the 1950s, corporate taxes brought in about one in every four tax dollars. Today that number is about one in ten.
  • Reduce the top tax rate by 12% from 35% to 23%: Households at the top 0.1% of the income scale saw an average income growth of almost $6 million between 1979 and 2005.
  • Reduce federal subsidies to farmers by $3 billion/year.
  • Reduce funding for the Smithsonian and for National Parks and increase visitor fees.
  • Cut funding for the Corporation for Public Broadcasting
  • Repeal or modify the home mortgage deduction.

Of course the solutions proposed by the chairmen also include the perennial Conservative favorites, Waste, Fraud and Abuse, Earmarks, contributions to the U.N. and Tort Reform which have no noticeable impact on the budget. All of their machinations would reduce about 1/3 of the deficit while harming middle class families for decades to come. What are some of the off limits factors that the commission won’t touch?

  • Increase the payroll tax for the wealthy: You currently pay a 6.2% tax on your earned income (actually 12.4%, your employer pays 1/2), but only up to $107,000. If you earn $50,000 per year, you pay 6.2% of that to support Social Security. If you earn $1,000,000 per year, you pay less than 1% in payroll taxes. Why not extend the tax to all taxpayers equally?
  • The hourly wage of Chesapeake Energy CEO Aubrey McClendon, is $27,034.74. Why is he paying the same payroll tax as someone making $100,000?

  • Tax capital gains and income from stock dividends as regular income: In the last 30 years, the tax on capital gains has fallen from 28% to 20%. In 2003 it was dropped to 15%.
  • Financial Speculation Tax: This tax of about 0.5% on stock trades has been proposed by the International Monetary Fund, is supported by many world leaders as well as corporate leaders.

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Just these last two suggestions would lower the deficit as much as all the skullduggery proposed by the deficit commission chairmen. If we are to get ourselves out of this deficit mess, it has to be done by placing burden on all citizens who can afford to help, not by placing all the hardship on those who can least afford to pay. Don’t forget that much of the current deficit was caused by reducing the tax burden on rich folks, two ill-thought-out wars and bailing out Wall Street for extremely bad judgment and downright fraud. Responsibility for helping the economy should fall on those who benefited the most and not all on the 15 million who are unemployed. Of course the proposal by these two gentlemen has no real effect. The actual commission report won’t be out until December, but I fear this is just a feint to soften the blow to come. As House Speaker Nancy Pelosi has said, “This proposal is simply unacceptable.


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