Today I read in the article, “Pryor backing bipartisan debt reduction plan,” Arkansas News Bureau, July 20,2011 the following words:
Sen. Mark Pryor said today he supports a $3.7 trillion deficit-reduction plan unveiled Tuesday by six Republican and Democrats as a “carefully crafted balanced” way to avert a looming financial crisis.
The Arkansas Democrat was one of about 46 senators who were briefed by the so-called “Gang of Six” on the proposal that has been negotiated on and off for nearly 10 months. Sen. John Boozman, R-Ark., also attended.
“Really, the Gang of Six is over and I am hoping that this will become a Gang of 60,” said Pryor, referring to the number of senators likely needed for the proposal to become law.
The plan would require Congress to make tough choices on spending priorities that would call on everyone to sacrifice, he said. About three-quarters of the reductions would come from spending, and the rest would be made up by closing “loopholes” and “giveaways” in the tax code, Pryor said.
Sara Lasure, a spokeswoman for Boozman, said the senator is still reviewing the plan. For now, he considers it a “good step” that could put Congress on the path to fiscal responsibility.
Pryor plans to sign a letter to congressional leaders urging them to adopt the “Gang of Six” proposal, he said.
I am not too happy about the gang of six getting so much power. It appears they will be determined to tax us to death. It is all smoke and mirrors. The taxes go up now and the budget cuts ARE ALL FICTION!!!! BIG SPENDERS LIKE MARK PRYOR NEVER LEARN!!!
Concerning the “cut, cap and balance plan” Senator Pryor noted, “We need to come together and work on this together and stop pushing things that sound good on bumper stickers but are basically never going to go anywhere.” SINCE THE REPUBLICANS WHO NOW ARE IN THE MAJORITY IN THE ARKANSAS DELEGATION VOTED FOR IT, THAT DOES NOT BODE WELL FOR PRYOR’S RE-ELECTION PROSPECTS!!!
Below is an article that exposes what this plan from the gang of six is really all about.
The on-again, off-again “Gang of Six” has come back on the scene and is offering a “Bipartisan Plan to Reduce Our Nation’s Deficits.”
The proposal is quite similar to the one put forth by the President’s Simpson-Bowles Commission, which isn’t too surprising since some of the same people are involved.
At this stage, all I’ve seen is this summary (A BIPARTISAN PLAN TO REDUCE OUR NATIONS DEFICITS v7), so I reserve the right to modify my analysis as more details emerge (and since I fully expect the plan to look worse when additional information is available, the following is an optimistic assessment.
- Unlike President Obama, the Gang of Six is not consumed by class-warfare resentment. The plan envisions that the top personal income tax rate will fall to no higher than 29 percent.
- The corporate income tax rate will fall to no higher than 29 percent as well, something that is long overdue since the average corporate tax rate in Europe is now down to 23 percent.
- The alternative minimum tax (which should be called the mandatory maximum tax) will be repealed.
- The plan would repeal the CLASS Act, a provision of Obamacare for long-term-care insurance that will significantly expand the burden of federal spending once implemented.
- The plan targets some inefficient and distorting tax preference such as the health care exclusion.
- The much-heralded spending caps do not apply to entitlement programs. This is like going to the doctor because you have cancer and getting treated for a sprained wrist.
- A net tax increase of more than $1 trillion (I expect that number to be much higher when further details are divulged).
- The plan targets some provisions of the tax code – such as IRAs and 401(k)s) – that are not preferences, but instead exist to mitigate against the double taxation of saving and investment.
- There is no Medicare reform, just tinkering and adjustments to the current system.
- There in no Medicaid reform, just tinkering and adjustments to the current system.
- The entire package is based on dishonest Washington budget math. Spending increases under the plan, but the politicians claim to be cutting spending because the budget didn’t grow even faster.
- Speaking of spending, why is there no information, anywhere in the summary document, showing how big government will be five years from now? Ten years from now? The perhaps-all-too-convenient absence of this critical information should set off alarm bells.
- There’s a back-door scheme to change the consumer price index in such a way as to reduce expenditures (i.e., smaller cost-of-living-adjustments) and increase tax revenue (i.e., smaller adjustments in tax brackets and personal exemptions). The current CPI may be flawed, but it would be far better to give the Bureau of Labor Statistics further authority, if necessary, to make changes. A politically imposed change seems like nothing more than a ruse to impose a hidden tax hike.
- A requirement that the internal revenue code maintain the existing bias against investors, entrepreneurs, small business owners, and other upper-income taxpayers. This “progressivity” mandate implies very bad things for the double taxation of dividends and capital gains.
This quick analysis leaves many questions unanswered. I particularly look forward to getting information on the following:
- How fast will discretionary spending rise or fall under the caps? Will this be like the caps following the 1990 tax-hike deal, which were akin to 60-mph speed limits in a school zone? Or will the caps actually reduce spending, erasing the massive increase in discretionary spending of the Bush-Obama years?
- What does it mean to promise Social Security reform “if and only if the comprehensive deficit reduction bill has already received 60 votes.” Who defines reform? And why does the reform have to focus on “75-year” solvency, apparently to the exclusion of giving younger workers access to a better and more stable system?
- Will federal spending under the plan shrink back down to the historical average of 20 percent of GDP? And why aren’t those numbers in the summary? The document contains information of deficits and debt, but those figures are just the symptoms of excessive spending. Why aren’t we being shown the data that really matters?
Over the next few days, we’ll find out what’s really in this package, but my advice is to keep a tight hold on your wallet.
The gang of six is engaged is providing real budget cuts? NO WAY!!! HOWEVER, PRYOR AND MANY OTHERS ARE OUT TRYING TO PULL THE WOOL OVER PEOPLE’S EYES CONCERNING THESE PHONEY CUTS.
So what’s in this great new plan from the Gang of Six? Only about $4 trillion in real deficit reduction achieved by deep defense cuts, commission-delegated reductions in spending for Medicare, Medicaid and Social Security, plugging of assorted tax code loopholes and — get this — an elimination of the alternative minimum tax and an over-all actual reduction in personal income taxes attainable, presumably, by the credibility and depth of the spending cuts.
Take a look at this video clip below and see if Brummett has it right or not.