Sirveri's Journal - Archives
One, it will basically inflate the wages. It's a lot easier to argue that teachers are underpaid when you can point to an average salary of 50k, if we go your route then it hyperinflates their wages. In fact there are right leaning groups that are already attempting to do that. Basically they take a single sample group, which has a 77% benefit cost in addition to wages, add them together, and then declare that all teachers are making 100k/yr.
Here is one example: http://www.youtube.com/watch?v=9x2N4bDmzdc
It's within about one minute in before they drop the 100k number, but it gives an example of the type of hit pieces they've already got prepared.
The other issue is that it's confusing. The teacher never actually sees that money in their paycheck, so what is the functional difference between it being a wage or a deferred compensation or an employer provided benefit? When I was a 20 something(a decade ago now...) and had health insurance through a private employer then got laid off I was quoted 450/mo for COBRA, so was that an extra 450 a month I was making in wages that was then automatically put towards my health insurance that I had no choice to purchase until I was laid off? Or was that a benefit? Is there a difference? What's the functional difference and point to it? Even writing it it sounds like the same thing to me.
It seems like you're trying to say a benefit cut is a pay cut, which is fine. But everybody recognizes that benefits or deferred comp or whatever you want to call it are worth something. The claim from the right is that they're worth TOO MUCH, and that they can retain their base pay and that a benefit cut wouldn't affect their take home pay (which is factually accurate and plays the lies with statistics card). The point shouldn't be that you're cutting teachers wages, but that teachers are underpaid compared to their private sector counterparts. And furthermore, that other workers should have more benefits and that this would benefit the economy better than cutting more wages and further depressing domestic spending by taking money out of the pockets of the people who actually spend it so that the rich can get another tax break from Walker. That was kind of a run on sentence but I hope it came across clear.
I hope that clears up where I'm coming from, and why I don't think this particular approach is all that useful.
That's a good question. In the 2008 primaries the top two vote getters were Barrack Obama and Hillary Clinton, if Prop 14 had been in effect in Nov '08 then the race for the California presidential election would have been between Obama and Clinton, with McCain not even on the ballot. While this is amusing to consider back during that time frame it brings up an interesting point today.
With Obama causing a mass rift between his base, and the potential for a strong turnout from Republican voters during a primary that potentially will decide between Palin and a more moderate Republican, we could see very high turnout on the right. This combined with a depressed liberal turnout, and a possible set of primary protest votes against Obama, this situation could lead to having two Republican candidates on the ballot in Nov '12, and quite possibly a red state outcome. Some would then think that a write in campaign would be successful in this case, pointing to the Alaska election between Murkowski and Miller. However a hidden provision in Prop 14 eliminates the write in option, and is the subject of a pending lawsuit filed on July 29, 2010.
It's the worst type of obfuscation to declare something a summary and then totally ignore things and fail to address them when they don't fit your pre-defined ideological standards. I'm sick of this, we're better than this, we don't need to cherry pick data to paint a picture of what we want to say, doing so makes us no better than republicans. You also failed to post the link to the 24 page addendum document, found here: http://www.fiscalcommission.gov/sites/fisc...
CoChair proposal is already linked in the OP. But these two files are, as far as I know, the only two things released for public consumption. In the second document they don't talk about addressing SS at all, they do however talk about other things, some of which are bad some of which are good. I'm going to duplicate the link to the cochair proposal here, because I'm going to be repeatedly citing it and it's good to have everyone on the same page:
I'll be jumping around a lot so it will help to have it open in a separate tab.
Page 44 (which you totally ignored):
Reduce Elderly Poverty
Add new protections for the most vulnerable:
*Add a new special minimum benefit to keep full-career minimum wage workers above the poverty threshold.
*Wage-index the minimum benefit to make sure it is effective both now and in the future.
*Provide a benefit boost to older retirees most at risk of outliving other retirement resources.
The way I read this is that the poorest elderly currently on SS would see their paychecks immediately increase to an amount that would most likely be tied to minimum wage which would go a long way to alleviate a lot of cases of elder poverty.
Page 46 (where they raise the SS income cap):
Broaden the Payroll Tax Base
Gradually increase the taxable maximum to capture 90 percent of wages by 2050
*Under current law, the taxable maximum is pegged to growth in average wages. In 2009, the taxable maximum captured almost 86 percent of earnings, but it will fall to 82.5 percent by the end of the decade.
*Phasing into a higher taxable maximum slowly will prevent large marginal changes and will prevent rapid buildup of the trust fund.
It speaks for itself, and it has been floated on DU a LOT, albeit in a more extreme total removal of the cap. I don't share their concern about needing to phase in, since any excess funds are generally absorbed into the budget by way of selling SS some federal notes like they currently do. This would reduce our foreign debt holdings to China and Japan, which IMO is a good thing.
All of page 50 is optional, but it's worth talking about for at least one reason, which I bolded:
Alternative Social Security Options
*Increase benefits for low-income widows
Reduces balance by 0.06% of payroll
*Cap spousal benefit at one-half of average worker’s benefit
Improves solvency by 0.08% of payroll
*Reinstate college benefits for child survivors
Reduces balance by 0.07% of payroll
*Tax cafeteria plans in same manner as 401(k) plans
Improves solvency by 0.22% of payroll
*Uncap the Disability Insurance (DI) portion of FICA taxes (1.8%)
Improves solvency by 0.34% of payroll
*Fully or partially tax employer-sponsored health insurance
Solvency impact dependent on design
*Convert delayed retirement credit into one-time bonus
No solvency impact
*Include automatic stabilizer with future benefit and/or revenue changes
Let's talk about some of these SPECIFIC allegations, one is the 'sneak attack on medicare', which I have to assume comes from a single line in slide 36, and it's taken totally out of context.
Long-Term Health Care Savings
Set global target for total federal health expenditures after 2020 (Medicare, Medicaid, CHIP, exchange subsidies, employer health exclusion), and review costs every 2 years. Keep growth to GDP+1%.
If costs have grown faster than targets (on average of previous 5 years), require President to submit and Congress to consider reforms to lower spending, such as:
*Increase premiums (or further increase cost-sharing)
*Overhaul the fee-for-service system
*Develop a premium support system for Medicare
*Add a robust public option and/or all-payer system in the exchange
*Further expand authority of IPAB
So apparently by your very own criteria there is also a stealth plan to impose the ultimate evil known as the public option onto the general American public.
While on the subject of SS, lets talk about the retirement age. Nowhere in the actual document does it specifically say to raise the retirement age to 64. In fact it specifically advises to create a hardship exemption at age 62. Here's the entire text:
Index retirement age to increases in longevity
*This option is projected to increase the age by one month every two years after it reaches 67 under current law, meaning the normal retirement age would reach 68 in about 2050 and 69 in about 2075
*Hardship exemption for those unable to work beyond 62
Under current law the retirement age will already raise to 67, the plan doesn't change anything in that respect. In addition they used the term INDEX, which means that if there was a decrease in average life expectancy the retirement age would decrease accordingly.
And while I'm at it, I'll also yell at you for ignoring HALF of the tax reform statements. Option 2: Wyden-Gregg Style Reform, is found on page 26, whereas Option 1: The Zero Plan is found on page 24. You also didn't even address all of the zero plan, instead picking the most extreme possible variant of it. I encourage everyone to look at the different tax rates listed on page 24. The reason they dropped rates so low was to offset the total elimination of all deductibles, including the deductible for having children and the mortgage interest deduction. However they also gave the option to add the child deduction and the EITC back in (which would bump all rates by 1%). Personally, I agree, the zero plan is total garbage. However the Wyden-Gregg Style Reform plan is worth at least talking about. One thing to note is that the only tax rate which changes from current rates, is the corporate tax rate which they drop to 26% (which I don't agree with), all other tax rates are retained at current levels or similar (this unfortunately includes the Bush era tax cuts and upper rate of 35%). These are ultimately all simply suggestions, and subject to change.
Anyhow, lets talk about more about the Wyden-Gregg plan. First is this statement:
"Triple standard deduction to $30,000 ($15,000 for individuals)"
Which would instantly make the first 30k earned by couples tax free (15k for individuals), income past that point would likely be charged at a rate of 15% up to approximately 68k for couples (34k single).
Lots of talk lately about the mortgage interest deduction so lets talk about that:
"Limit mortgage deduction to exclude 2ndresidences, home equity loans, and mortgages over $500,000"
I still don't like this because I suspect it will backdoor increase the burden on renters, in addition it has no COLA adjustment for high property value areas like New York and San Francisco. The other issue is that I would prefer that all interest payments were tax deductible. But that's because I prefer a return to the tax policy of 1979 which also had a 70% upper income bracket (which if adjusted for bottom bracket would kick in at $1million).
Now for the bad (pg. 27):
Corporate tax reform
*Reduce corporate tax rate to 26%
Just because Republicans keep telling us our corp tax rate is too high doesn't make it so. The primary reason for our trade deficit is labor costs and foreign government subsidizing of competitive industries to undercut our own companies.
But it also says some good things:
*Permanently extend the research credit
*Eliminate and modify several business tax expenditures, including:
*Domestic production deduction
*LIFO method of accounting
*Energy tax preferences for the oil and gas industry
*International tax reform including a territorial system
Killing the subsidies to the oil and gas industries is necessary and overdue. This is explained further in the other article I linked (also a direct source from the cochair proposal). I also like research so I like the research credit. How they would cut subsidies to oil and gas is not fully clear to me, but I suspect it's only a partial cut because of this entry from the other article (pg. 10):
23. Cut research funding for fossil fuels. This option would eliminate new funding to the Department of Energy’s applied research on fossil fuels. This funding was created at a time when the prices for these types of fuels were partially controlled and the development of technology was stunted. Today, the situation is quite different. In addition, much of this federal research duplicates what is being conducted in the private sector.
They say it would save 0.9Billion
They also want to cut earmarks, which they say would save 16 Billion.
22. Eliminate all earmarks
Now if you want to really get pissed off we can do it, and we can do it honestly.
From the $200 BILLION IN ILLUSTRATIVE SAVINGS report:
2. Freeze federal salaries, bonuses, and other compensation at non-defense agencies for three years.
Found on Page 1, yeah, really stupid thing to do during a recession, take away a wage increase that simply adjusts salaries to stay in line with inflation. Cutting consumer spending and further widening the income disparity in the country. They estimate it would save 15.1 Billion.
3. Cut the federal workforce by 10 percent (2-for-3 replacement rate).
Found on page 2, another stupid thing to do with an unemployment rate hitting 9.6% (U-3). They estimate it would save 13.2B
7. Establish Veterans Administration (VA) health co-pays.
On page 4. Screw you guys, you want to bone disabled vets for a measly 0.7B. Go to hell.
16. Eliminate the Office of Safe & Drug Free Schools.
On page 7, hey guys, instead of doing this and saving a whopping 1.8B (1.1B more than what you get from screwing disabled vets), you could just END THE WAR ON DRUGS, and save 20 Billion...
24. Eliminate funding to private sector for spaceflight developments.
Page 10, this is actually probably a good idea, just develop the spacecraft in house and it will likely be cheaper. Saves 1.2B
26. Reduce voluntary contributions to the United Nations.
Page 11, I'll let the commission speak for itself. "The United States is by far the largest donor to the United Nations in terms of assessed dues. However, the United States gives the United Nations more than $3.5 billion in “voluntary” funds each year.58
This option allows the United States to remain a member in good standing of the United Nations by contributing the full dues that will be assessed, but reduces voluntary payments by 10 percent, which will save $300 million per year." Saves 0.3B
30. Reduce funding to the Smithsonian and the National Park Service and allow the programs to offset the reduction through fees.
On page 12. They want to charge $25 for people to go to the Smithsonian when the current generation of Americans is probably the most vapid group I've seen in a VERY long time, all for the massive amount of ... 0.3B. Yeah, we can afford to keep that free to hopefully stop the current cultural slide towards only wanting to watch Glen Beck and listen to Limbaugh.
32. Cut funding for the Corporation for Public Broadcasting.
Page 13, I wonder what side of the aisle put THIS into the proposal.
39 and above ALL relate to defense cuts, a lot of which I agree with like these:
42. Double Secretary Gates’ cuts to defense contracting.
43. Reduce procurement by 15 percent
44. End procurement of the V-22 Osprey.
everything between these two points is good too, I suggest looking at it.
51. Reduce military personnel stationed at overseas bases in Europe and Asia by one-third
57. Consolidate the Department of Defense’s retail activities (PX for all, down with the Nex)
There's plenty of other stuff and this is already a giant Text wall. Point being, stop taking shit out of context and inflating and spinning it! It's annoying!
This is more of a pure data post rather than commentary, for those who actually want to READ the reports.
The 2010 proposals:
Which has two links which go to:
CoChair Proposal (this is the powerpoint slideshow):
$200 Billion in illustrative savings (this is the actual text report to go with the slideshow):
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