Tag Archives: social security and medicare

Federal Revenues by Source

The Heritage Foundation website has some of the best charts:

Rob Bluey

December 11, 2011 at 10:02 am

President Obama and Republicans in Congress continue to wage war over an extension of the payroll tax cut. But missing from the debate is any discussion of comprehensive tax reform that would eliminate payroll taxes altogether.

Social Security and Medicare payroll taxes are the second-largest source of federal revenue, surpassed only by personal income taxes. This week’s chart from Heritage’s 2011 Budget Chart Book depicts federal revenue by source.

That chart would look quite different if Heritage’s tax-reform plan were enacted into law. That plan, part of the Saving the American Dream proposal, prescribes a single, low rate for individuals, replacing all federal income taxes, payroll taxes, the death tax, and most excises.

The business tax code will also be replaced by a new flat business tax, thereby giving all businesses equal treatment and providing the framework for them to compete better in global markets.

This simplified system enables taxpayers to anticipate their tax burden and plan accordingly. The Heritage tax plan encourages economic growth through a lower rate and by removing multiple taxation on the same income. Because the plan taxes income spent on consumption, it eliminates the disincentives families currently face to build savings. Enacting the plan would result in greater economic freedom and opportunity, and it would encourage Americans to be proactive in building financial security for themselves and their families.

Posted in Entitlements, Scribe

Ron Paul’s presidential ideas

Classic Ron Paul: “We have not seen any sincere effort to cut any spending”

I really like Ron Paul.

Ron Paul’s ‘Plan to Restore America’

Posted by Tad DeHaven

Presidential candidate Ron Paul has released a fiscal reform plan that would dramatically cut spending and rein in the size and scope of the federal government. My reaction to the proposal can be summed up in one word: hallelujah.

Republican policymakers – including the current GOP field of presidential candidates – talk a good game about reducing spending, but very few are willing to spell out exactly what they’d cut. As NRO’s Kevin Williamson puts it in the title of his write-up on the plan, “Ron Paul Dropping a Reality Bomb on the GOP Field.”

The following are some of the plan’s highlights:

  • Paul says his plan would cut spending by $1 trillion in the first year alone, and balance the budget in three years without increasing taxes.
  • Funding for the wars would end. That’s not isolationism – it’s a common sense position that also reflects popular opinion. In addition, foreign aid spending would be zeroed out.
  • On entitlements, younger people would be given the freedom to opt out of Social Security and Medicare. Spending would be frozen for Medicaid and other welfare programs and they would be converted to block-grant programs.

That’s an ambitious agenda to say the least, and one that the press is likely dismiss as a pipe-dream. Then again, Paul has managed to single-handedly turn the Federal Reserve into a campaign issue, which nobody could have foreseen just several short years ago. In fact, several of Paul’s fellow candidates for the GOP nod have taken to echoing his anti-Federal Reserve sentiments. Hopefully, the other candidates will copy Paul again by getting specific on what they’d cut. If not, they should be prepared to explain to the electorate why taxpayers should keep funding the departments that Paul would ax.

Federal Revenues by Source

The Heritage Foundation website has some of the best charts:

Rob Bluey

December 11, 2011 at 10:02 am 

President Obama and Republicans in Congress continue to wage war over an extension of the payroll tax cut. But missing from the debate is any discussion of comprehensive tax reform that would eliminate payroll taxes altogether.

Social Security and Medicare payroll taxes are the second-largest source of federal revenue, surpassed only by personal income taxes. This week’s chart from Heritage’s 2011 Budget Chart Book depicts federal revenue by source.

That chart would look quite different if Heritage’s tax-reform plan were enacted into law. That plan, part of the Saving the American Dream proposal, prescribes a single, low rate for individuals, replacing all federal income taxes, payroll taxes, the death tax, and most excises.

The business tax code will also be replaced by a new flat business tax, thereby giving all businesses equal treatment and providing the framework for them to compete better in global markets.

This simplified system enables taxpayers to anticipate their tax burden and plan accordingly. The Heritage tax plan encourages economic growth through a lower rate and by removing multiple taxation on the same income. Because the plan taxes income spent on consumption, it eliminates the disincentives families currently face to build savings. Enacting the plan would result in greater economic freedom and opportunity, and it would encourage Americans to be proactive in building financial security for themselves and their families.

Posted in Entitlements, Scribe

Senator Pryor asks for Spending Cut Suggestions! Here are a few!(Part 123)

Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below:

Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so in the past and will continue to do so in the future.

On May 11, 2011,  I emailed to this above address and I got this email back from Senator Pryor’s office:

Please note, this is not a monitored email account. Due to the sheer volume of correspondence I receive, I ask that constituents please contact me via my website with any responses or additional concerns. If you would like a specific reply to your message, please visit http://pryor.senate.gov/contact. This system ensures that I will continue to keep Arkansas First by allowing me to better organize the thousands of emails I get from Arkansans each week and ensuring that I have all the information I need to respond to your particular communication in timely manner.  I appreciate you writing. I always welcome your input and suggestions. Please do not hesitate to contact me on any issue of concern to you in the future.

Therefore, I went to the website and sent this email below:

Here are a few more I just emailed to him myself:

Balance the budget by 2014 without raising taxes. Budget deficits are merely a symptom of two larger problems: a sluggish economy and runaway spending. Restoring economic growth requires low tax rates, and runaway spending is the most dangerous threat to pro-growth tax relief. Balancing the budget with spending cuts will improve the country’s ability to deal with the massive Social Security and Medicare liabilities that will come due when the baby boomers retire.

  • Under President Obama’s budget, Washington is projected to spend $3,618 billion, raise $2,118 billion, and run a $1,500 billion deficit in 2010.
  • Tax revenues strongly correlate with economic growth. The recession is chiefly responsible for collapsing revenues.
  • Spending has increased 19 percent faster than inflation since 2008.
  • The projected $1,500 billion budget deficit represents a post–World War II record 10.3 percent of GDP. More than 41 cents of every dollar Washington spends in 2010 will be borrowed

Brantley misses the point, it is time to cut spending dramatically

Max Brantley wrote on the Arkansas Times Blog:

REPUBLICANS: BOTH SIDES NOW: Super committee budget talks having failed because of a Republic refusal to increase taxes on the rich, they have now set about having it both ways. They are now saying, contrary to evidence, that they indeed proposed to raise taxes on the rich.

____________________

When the federal government brings in 2.2 trillion and spends 3.7 trillion a year then it is time for dramatic cuts. Taxes should be off the table. He has gone on for months blaming the Republicans for not wanting to raise taxes but spending is the problem.

Take a look at a portion of this article below by Doug Bandow of the Cato Institute:

The budget problem is a spending problem. The Bush tax cuts accounted for just 14 to 16 percent of the massive shift from surplus to deficit over the last decade. According to the Congressional Budget Office future deficits will be massive and rising even with federal revenues above the 40-year average of 18 percent of GDP.

We are spending too much, and not spending wisely. The answer is to cut outlays. Not to give politicians more money, which they also will spend, and not spend wisely.

The failure of the supercommittee should not surprise anyone. Legislators never like making tough decisions. After spending wildly for years, they aren’t prepared to cut back.

But reducing outlays is not just an accounting exercise. It requires Americans to rethink what they want the U.S. government to do at home and abroad. Only if they decide to have Washington do less can Washington spend less.

First, Social Security and Medicare should be narrowed to focus on the poor. No more middle class welfare. If you can afford to care for yourself, you collect no more federal checks. And the young should be allowed to opt out of the programs, putting money aside for their own retirement and health care. Over the long-term this will cut trillions of dollars in unfunded liabilities.

Second, Medicaid should be turned into a competitive voucher program that shares cost savings with frugal recipients. It will never be cheap to provide health care for the poor, but only by changing the program’s underlying incentives can much money be saved. Reforming Medicaid is important for state governments as well as Washington.

Third, the U.S. government should focus defense spending on defense. No more social engineering around the world. No more subsidies for rich states and nation-building in poor ones. No more interventions here, there, and everywhere for no good purpose. Then military outlays could be cut substantially.

Fourth, take these steps and the government would borrow less, reducing interest payments naturally. That would create a “virtuous cycle” of falling outlays, deficits, and debts.

Fifth, toss in big reductions in domestic discretionary spending for good measure. Let people spend their own money for their families and communities. Then government would be left doing the few things that it really should do.

Solving Washington’s budget crisis is simple, but not easy. Only if the American people demand that Uncle Sam do less will he spend less. Ultimately we, not the super committee or anyone else, are responsible for our fiscal future.

Senator Pryor responds to my “Thirsty Thursday” series of emails to him concerning the Balanced Budget Amendment

I have been blogging for 10 months now and have had over 110,000 hits on my blog. Posts encouraging Senator Pryor to cut spending have been responsible for more posts than any other subject. It has got the most hits too. I am hopeful that Senator Pryor will either pay attention to the people or get voted out. Below is the email that I received today from Senator Mark Pryor:

October 24, 2011

Dear Mr. Hatcher,

Thank you for contacting me regarding a Constitutional amendment requiring a balanced federal budget. I appreciate hearing from you.

I am deeply concerned about current spending levels and our ever-growing national debt, and I believe Congress can and should balance the federal budget. As a nation, we have been living beyond our means for a long time. Balancing the budget will require both parties to work together to achieve this goal.

Amending the Constitution is a step that should never be taken lightly. A poorly drafted balanced budget amendment could prevent the federal government from being able to respond appropriately to national emergencies, cause drastic cuts to important programs, such as Social Security and Medicare, and result in an automatic tax increase. However, I remain open to considering a balanced budget amendment, and will give my full attention and thought to any balanced budget amendments the Senate considers.

In the meantime, I will continue to introduce legislation to eliminate ineffective and unnecessary programs, and use my position in Congress to further reduce wasteful spending. I appreciate hearing from you. Your input helps me make better decisions, and I will be sure to keep your specific comments in mind as I work to come up with better fiscal solutions for the American people.

Again, thank you for contacting me. I value your input. Please do not hesitate to contact me or my office regarding this or any other matter of concern to you.
Sincerely,

Mark Pryor
United States Senate

Save money at the pump by taking the Drive Smarter Challenge: www.drivesmarterchallenge.org

Please Note, this is not a monitored email account. Due to the sheer volume of correspondence I receive, I ask that constituents please contact me via my website with any responses or additional concerns.

Related posts:

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The current federal budget brought down to a level a family could understand

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Mark Pryor voted for first stimulus but silent about second

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Senator Pryor asks for Spending Cut Suggestions! Here are a few!(Part 115)

Senator Mark Pryor wants our ideas on how to cut federal spending. Take a look at this video clip below: Senator Pryor has asked us to send our ideas to him at cutspending@pryor.senate.gov and I have done so in the past and will continue to do so in the future. On May 11, 2011,  I […]

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Ron Paul’s ideas

Classic Ron Paul: “We have not seen any sincere effort to cut any spending”

I really like Ron Paul.

Ron Paul’s ‘Plan to Restore America’

Posted by Tad DeHaven

Presidential candidate Ron Paul has released a fiscal reform plan that would dramatically cut spending and rein in the size and scope of the federal government. My reaction to the proposal can be summed up in one word: hallelujah.

Republican policymakers – including the current GOP field of presidential candidates – talk a good game about reducing spending, but very few are willing to spell out exactly what they’d cut. As NRO’s Kevin Williamson puts it in the title of his write-up on the plan, “Ron Paul Dropping a Reality Bomb on the GOP Field.”

The following are some of the plan’s highlights:

  • Paul says his plan would cut spending by $1 trillion in the first year alone, and balance the budget in three years without increasing taxes.
  • Funding for the wars would end. That’s not isolationism – it’s a common sense position that also reflects popular opinion. In addition, foreign aid spending would be zeroed out.
  • On entitlements, younger people would be given the freedom to opt out of Social Security and Medicare. Spending would be frozen for Medicaid and other welfare programs and they would be converted to block-grant programs.

That’s an ambitious agenda to say the least, and one that the press is likely dismiss as a pipe-dream. Then again, Paul has managed to single-handedly turn the Federal Reserve into a campaign issue, which nobody could have foreseen just several short years ago. In fact, several of Paul’s fellow candidates for the GOP nod have taken to echoing his anti-Federal Reserve sentiments. Hopefully, the other candidates will copy Paul again by getting specific on what they’d cut. If not, they should be prepared to explain to the electorate why taxpayers should keep funding the departments that Paul would ax.

Only difference between Ponzi scheme and Social Security is you can say no to Ponzi Scheme jh2d

Is Social Security  a Ponzi Scheme?

I just started a series on this subject. In this article below you will see where the name “Ponzi scheme” came from and if it should be applied to the Social Security System.

Ponzi! Ponzi! Ponzi!

Ponzi! Ponzi! Ponzi! There, I said it. To the extent people believe there are trust funds with their names on them, Social Security is absolutely a Ponzi scheme. So is Medicare. People need to hear it. 

Many people think that when the government takes payroll tax from their paychecks, it goes to something like a savings account. Seniors who collect Social Security think they’re just getting back money that they put into their “account.” Or they think it’s like an insurance policy — you win if you live long enough to get more than you paid in. Neither is true. Nothing is invested. The money taken from you was spent by government that year. Right away. There’s no trust fund. The plan is unsustainable. Medicare is worse.

Mitt Romney and other Republicans who scoff at Rick Perry shamelessly pander to older voters. They should tell people the truth.

Still, I’m not convinced Perry has more than a sound bite. In his USA Today op-ed this week, the most he says is, “We must consider reforms to make Social Security financially viable.” He doesn’t say what kind of reforms.

Charles Ponzi promised to make money for investors by taking advantage of price differences in coupons for postage stamps. Trouble is, he paid some early “investors” with money wheedled from later “investors.”

What sustains a Ponzi scheme is deception. If people really knew how it worked, they wouldn’t sign on.

Social Security and Medicare are different. You could say no to Ponzi. I wouldn’t advise saying no to the government. Not if you want to stay out of prison.

Social Security is nothing more than a promise from politicians. The next gang can break the promise.

Twice the government has argued before the Supreme Court that Social Security is not insurance. In 1960, Health, Education and Welfare Secretary Arthur Sherwood Flemming submitted a brief to the courts stating: “The contribution exacted under the Social Security plan is a true tax. It is not comparable to a premium promising the payment of an annuity commencing at a designated age.”

In a ruling that denied a man’s property claim to Social Security benefits, the Supreme Court said, “It is apparent that the noncontractual interest of an employee covered by the Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits is bottomed on his contractual premium payments.”

So anyone who believes Social Security is an investment plan really has only himself to blame.

If you want evidence, listen to how politicians talk about your Social Security “contributions.” They are taxes and nothing more. No one pretends they are premiums. In fact, President Obama and the Republicans want to stimulate the economy by extending a cut in the payroll tax for workers and cutting the employer’s share of the tax — but without reducing Social Security benefits.

Now, I like tax cuts more than the next person, but as Freeman editor Sheldon Richman points out, this one has a complication the politicians don’t seem to care about:

“President Obama’s jobs program calls for cuts in both sides of the payroll tax. That tax finances Social Security and Medicare. Social Security and Medicare are already taking in less money than they need to pay retirees. So they will have to cash in more of the Treasury IOUs left behind when previous surpluses were used to finance general expenditures. But the Treasury is also already running a deficit, a trillion dollars-plus. So it will have to borrow more in the capital markets in order to pay back the Social Security and Medicare funds. Unless Obama makes up the lost revenue by changing the tax code. But then money will be withdrawn from the economy in the form of higher taxes so it can be put back into the economy through the payroll-tax cut. Somehow that’s supposed to stimulate the economy.”

Like all jobs programs, Obama’s latest plan is a scam. The economy would create ample opportunities to earn income — and make it easier for people to look after themselves in retirement — if the government would just slash spending, taxes, regulation and privilege.

Ponzi scheme or not, we wouldn’t need Social Security.

John Stossel

John Stossel

John Stossel is host of “Stossel” on the Fox Business Network. He’s the author of “Give Me a Break” and of “Myth, Lies, and Downright Stupidity.” To find out more about John Stossel, visit his site at johnstossel.com.

©Creators Syndicate

Mike Ross: This debt deal “forces touch decisions to reduce our national debt”

Above you will see the liberal spin on what has happened and it is that the Republicans won!!! However, no serious cuts were made.

“Thus, this deal achieves far too little by way of spending cuts, keeps open the possibility of new taxes, and hikes the debt ceiling substantially — all of which constitutes a clear and predictable kicking of the can past the November, 2012 elections… In related news, credit ratings agencies have signaled that that a small deal — which this is — is unlikely avoid a downgrade of U.S. Treasury securities. If a ratings downgrade actually occurs, the negative economic fallout will interrupt this deal’s framework of achieving spending cuts — by forcing future lawmakers to renege on the cuts. Today’s failure to deliver deeper spending cuts will then be correctly viewed as the missed opportunity that it is

Jagadeesh Gokhale is senior fellow at the Cato Institute, member of the Social Security Advisory Board, and author of Social Security: A Fresh Look at Reform Alternatives, by the University of Chicago Press.

________________________________

The words above are very important. The markets were looking for a deal that would turn us away from the path of Greece, but we did not get it.

Basically President Obama if he had got everything he wanted would have raised our debt under his 10 yr plan from 14 to 23 trillion. Under this plan we go to 20 trillion. How can I get excited about a 3 trillion cut over 10 years when the budget deficit this year alone will be 1.5 to 1.7 trillion?

Now let’s look at the response of Democrat Mike Ross (retiring representative from Arkansas):

1. “At last, cooler heads prevailed and we were able to pass a bipartisan agreement that secures America’s financial standing in the world..”

How can it secure “America’s financial standing in the world” if we are heading to Greece with 20 trillion in debt?

2. “forces tough decisions to reduce our national debt”

Nothing gets cut now and this year’s budget of 3.8 trillion gets 22 billion cuts in projected increases. 

3. “..and makes meaningful spending cuts that protect seniors’ Social Security and Medicare benefits.”

Where does it do anything like that?

4. “While this bill is a step in the right direction…”

We are still heading toward Greece!!

5. “…we still have a lot of work to do to get this nation’s fiscal house back in order.”

I haven’t seen any work yet on it.

6. “As a fiscal conservative, I will continue to be a moderating voice in this debate, bringing everyone to the table as we find commonsense ideas that help us return to the days of a balanced budget and a stronger economy.”

You are not a fiscal conservative and you let Obamacare out of committe. Way to go!! You could have killed it and now it will kill our businesses.

7. “This entire debate has demonstrated just how dangerous partisan bickering has become.”

The Tea Party was the only sane group that knows that we are heading to Greece.

8. “For months now, both sides have played political games with this issue, catering to their own respective extremes, and bringing our economy to the brink of a financial crisis.”

Who brought this country to financial crisis? It was not the Tea Party, but it was the liberals in Congress who are addicted to overspending.

9. “It’s become clear that we need more centrist members of Congress who are willing to reach across the aisle, compromise and work together.”

If Mike Ross is a centrist member of Congress then we are in big trouble. Heading to Greece will not be avoided!!

10. “This nation needs bipartisan, long-term solutions if we are ever going to truly solve our fiscal crisis.”

We don’t need bipartisan solutions if they are going to look like this debt deal that leads us to Greece!!!

11. “Job creators and the American people need the certainty of a strong, stable economy and it’s our job to work together and make that happen as soon as possible.”

As soon as possible?” This budget deal would not get us anywhere close to the balanced budget in the next decade. It is classic kicking the can down the road.

_______________________________________

This debt deal stinks. It is a failure of leadership and resolve.

The Debt Deal: Failures of Leadership and Resolve

by Jagadeesh Gokhale

Jagadeesh Gokhale is senior fellow at the Cato Institute, member of the Social Security Advisory Board, and author of Social Security: A Fresh Look at Reform Alternatives, by the University of Chicago Press.

Added to cato.org on August 1, 2011

This article appeared on Cato.org on August 1, 2011.

The President and leaders in Congress have basically thrown in the towel.

Democrats are unwilling to endure the political risks of agreeing to sorely needed spending cuts. House Republicans are holding out against revenue increases. The final deal announced Sunday includes just $1 trillion in cuts to discretionary spending, with an increase in the debt limit sufficient to carry through next year. Thus, this deal achieves far too little by way of spending cuts, keeps open the possibility of new taxes, and hikes the debt ceiling substantially — all of which constitutes a clear and predictable kicking of the can past the November, 2012 elections.

The deal, therefore, does not reduce the economic uncertainty that is keeping the country mired in recession. The major deficit drivers — Medicare, Medicaid and Social Security — are not addressed. That task is dispatched to a special committee of 12 senators and House members to be convened by congressional leaders. The joint committee is to report back by November 23, 2011 on further deficit reduction measures. But its members may be unable to agree on sensible deficit-cutting measures, or its recommendations may be voted down by Congress. If that happens, deficit reduction will be triggered through automatic and haphazard cuts to discretionary programs — but Social Security, Medicaid, defense, veterans programs, and civilian and military pay will remain walled off. That leaves a lot of red ink completely off the negotiating table, and spending on two out of the three major deficit drivers will continue to escalate.

Jagadeesh Gokhale is senior fellow at the Cato Institute, member of the Social Security Advisory Board, and author of Social Security: A Fresh Look at Reform Alternatives, by the University of Chicago Press.

 

More by Jagadeesh Gokhale

In related news, credit ratings agencies have signaled that that a small deal — which this is — is unlikely avoid a downgrade of U.S. Treasury securities. If a ratings downgrade actually occurs, the negative economic fallout will interrupt this deal’s framework of achieving spending cuts — by forcing future lawmakers to renege on the cuts. Today’s failure to deliver deeper spending cuts will then be correctly viewed as the missed opportunity that it is.

The media is calling this deal a victory for Republicans, especially for the Tea Party. How so? None of the targets of the House Republicans’ Cut, Cap, and Balance legislation is included in it. It does not remove tax increases from consideration by the new joint committee. Republicans also were not able to push through their preferred shorter-term increase in the debt limit to hamper President Obama’s re-election effort. Finally, although the deal schedules a vote on the Balanced Budget Amendment after October, 2011, nothing — not even a future debt-limit increase — is contingent upon it. Thus, a crucial element of guaranteeing fiscal discipline beyond 2021 has been bargained away.

The deficit cutting debate will now be pushed under the rug until the joint committee concludes its deliberations. That committee is charged with recommending deficit reduction to the tune of only $1.5 trillion over the next 10 years. As I’ve noted elsewhere, even cuts of $4 trillion over 10 years that were under consideration earlier would be insufficient to prevent the federal government’s fiscal condition from worsening by 2021.

The “Skirmish on the Precipice” that we just witnessed yields little by way of long-term fiscal discipline, contrary to the claims of the Obama administration and congressional leaders. We seem trapped in a particularly vexing Catch-22: the current Congress is bound to pay the bills incurred by past Congresses, but it is unable to bind future Congresses to rules that would guarantee continued fiscal discipline.

It’s been a frustrating two months watching politicians alternately squirm and spin only to achieve a damp squib of a deal. But that frustration will pale to insignificance when all of us are reeling in the vortex of a continuing economic decline, from which this deal appears unlikely to rescue us. The President is being excoriated for failing to lead. But if this deal is enacted, conservatives would also deserve some blame for a failure of resolve — to win more concessions on spending cuts and substantively redirect the nation’s wayward fiscal course.