Liberal Democrat

Liberal Democrat
Individual Freedom For Everyone

Monday, January 7, 2013

CBPP: Fiscal Policy: Commentary: Robert Greenstein: Next Round of Deficit Reduction

Commentary: Next Round on the Deficit — Center on Budget and Policy Priorities

Lets see where are we in the deficit reduction battle or negotiations, round one would've been in the summer of 2011. The debt ceiling fight or debacle, I would give the edge to House Republicans there for getting a debt ceiling agreement. Where taxes weren't raised including in tax reform and the debt ceiling was raised by paying for it in budget cuts only. Democrats did get timely cuts in defense but the Republicans won at least 2-3 there and Democrats won long term. With the Tea Party looking even weirder and more irresponsible but Republicans won that short term battle. Round two I believe you have to give that to President Obama at least technically getting basically everything he wanted. Out of that, its really his Vice President Joe Biden that won the battle for him with his negotiations with. Senate Minority Leader Mitch McConnell but on policy grounds the President got what he wanted, the wealthy. Paying more in taxes and no cuts in entitlements or other social insurances.

The next battle will be round three for those of you who are slow at math and if you want me to be even more specific. This will be a debate about how to cut spending and reforming the Federal Government and this is never a debate. Where any real Liberal Democrat should be afraid of because we know how to balance budgets and cut deficits. That was our history in the 1990s and you may think this is on Republican territory because they love to cut budgets. Except for defense and they'll bring all of their proposals to do that most if not all of them targeted at entitlements. And other parts of the safety net and they'll do that as their first offer which will give Democrats especially the President. And the Democratic Senate an opportunity to say we know how you would cut the budget, this is what we would do it. We'll get the defense department back to 2000 spending levels and we'll do this by using the drawdowns. In Afghanistan and Iraq to accomplish this, as well as leaving those countries.

Democrats are now even in position to take on Republicans as it relates to entitlements and other parts of the. Safety net look at Medicare and Medicaid, where they could say those programs should no longer be subsidizing. Hospitals by the amount of healthcare they provide but by how healthy their patients are so we have less. Unhealthy patients on Medicare and Medicaid in this country, Food Assistance, we'll no longer subsidize. Junk food and drink companies and cover those purchases with Food Assistance, we'll cut back on the number. Of people who receive public assistance by moving them off of public assistance and into the middle class. By investing in things like childcare, job training and community colleges for people on public assistance. We'll pay for this investment up front and collect the savings long term with the amount of people who leave poverty in this country.

Also when it comes to Medicare and Social Security two different issues and problems but lift the cap to lets say. To 1M$ long term of taxable income that the payroll tax would cover, have the wealthy pay for their benefits. As they are receiving them, so Medicare to use as an example would be like paying for their health insurance. As if it was a private insurer this is where Democrats should be in this battle and President Obama would have. A majority of the country behind him on this as well as his approval rating and he might just be able to squeeze. 1T$ or so in new revenue from tax reform by closing wasteful tax loopholes to go along with the savings and reforms in the budget.