Today the fourth attempt by Simpson-Bowles, a bipartisan budget reducing commission established by President Obama several years ago, will make an attempt to get Congress and the White House to be serious about getting our nation's financial affairs in order and our deficits, debt and underfunded entitlement programs under control. It has to happen sometime, so why not now?
Simpson and Bowles to Offer Up Deficit Fix says this in part:
"Deficit hawks Alan Simpson and Erskine Bowles on Tuesday will propose a detailed plan for rewriting the tax code and implementing deep new spending cuts, hoping to offer a path to compromise for Democrats and Republicans, according to an outline of the plan.
Erskine Bowles, right, and Alan Simpson spoke outside the White House in Washington D.C. on April 14, 2011, after a meeting with President Barack Obama.
Messrs. Simpson and Bowles co-chaired the White House's 2010 deficit-reduction panel, which put together a bipartisan package of tax and spending changes that fell flat after the administration and congressional leaders took a look. . . .
Mr. Simpson, a Republican, and Mr. Bowles, a Democrat, say their new proposal would reduce the federal budget deficit by $2.4 trillion over 10 years, more than the $1.5 trillion package that White House officials have said is their goal. Obama administration officials say any deficit-reduction package must include new tax revenue as well as spending cuts.
House GOP leaders have not yet detailed the size of the deficit-reduction package they will propose, but they have said it would balance the budget within 10 years, which would put it in the $4 trillion range. They have said, though, that it won't include any tax increases.
The new $2.4 trillion Simpson-Bowles proposal would identify $600 billion in spending reductions through changes to health-care programs such as Medicare and Medicaid. That is roughly $200 billion more than the White House has said it is willing to accept. . . .
Another $600 billion in deficit-reduction would come from curbing or ending a number of tax breaks. This is about in line with the level of increased revenue White House officials have said they are seeking, but most Republicans have said they won't accept any tax increases as part of a deficit-reduction package.
The final $1.2 trillion in the proposal would come from lower caps on discretionary spending—the type Congress approves annually—changing the way cost-of-living increases are calculated for Social Security checks and other government benefits, cuts to farm subsidies, and changes to military and civilian retirement programs, among other things.
The package marks at least the fourth effort by Messrs. Simpson and Bowles in the past three years to galvanize public and political backing for a deficit-reduction deal."
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MY SIMPLE NON-POLITICAL TAKE ON ALL THIS
The biggest problem facing America today isn't about the rich denying money to help the middle class or government programs which are spending too much money on helping the poor.
The biggest problem, my friends, is the old stealing future oportunities from the young. We have piled on too much debt, too much government spending, too many unfunded entitlements and too little economic growth for them to be able to continue to support us in the style to which we think we're 'entitled.'
And at the same we've saddled them with a too expensive and poor educational system of public education, including college. And lest I forget, lots of burdensome student loans and no good job prospects either.
In my view, saving the middle class means saving ourselves from ourselves, first and foremost. Pogo said it best, "We have met the enemy and he is us."
Generational Theft Needs to be Arrested tells the true story in clear and convincing fashion:
"Government spending levels are unsustainable. Higher taxes, however advisable or not, fail to come close to solving the problem. Discretionary spending must be reduced but without harming the safety net for our most vulnerable, or sacrificing future growth (e.g., research and education). Defense and homeland security spending should not be immune to reductions. Most consequentially, the growth in spending on entitlement programs—Social Security, Medicaid and Medicare—must be curbed.
These truths are not born of some zeal for austerity or unkindness, but of arithmetic. The growing debt burden threatens to crush the next generation of Americans.
Coming out of the most recent elections, no consensus emerged either to reform the welfare state or to pay for it. And too many politicians appear unwilling to level with Americans about the challenges and choices confronting the United States. The failure to be forthright on fiscal policy is doing grievous harm to the country's long-term growth prospects. And the greatest casualties will be young Americans of all stripes who want—and need—an opportunity to succeed.
Three main infirmities plague Washington and constitute a clear and present danger to the prospects for the next generation.
First, the country's existing entitlement programs are not just unaffordable, they are also profoundly unfair to those who are taking their first steps in search of opportunity. Social Security is one example. According to Social Security actuaries, the generational theft runs deep. Young people now entering the workforce will actually lose 4.2% of their total lifetime wages because of their participation in Social Security. A typical third-grader will get back (in present value terms) only 75 cents for every dollar he contributes to Social Security over his lifetime. Meanwhile, many seniors with greater means nearing retirement age will pocket a handsome profit. Health-care spending through Medicare represents an even less equitable story.
The government has an obligation, of course, to support needy seniors. But this pension system is ripe for common-sense reforms, including changing eligibility ages and benefit structures for those with greater means, ridding the Social Security disability program of pervasive fraud, and removing disincentives for those who would rather work in their later years.
Powerful, vested interests portray reformers as avowed enemies of seniors. But, the status quo is, in fact, tantamount to saddling school-age children with more debt, weaker economic growth, and fewer opportunities for jobs and advancement.
Second, while many in Washington pay lip service to the long term, few act on it. The nation's debt clock garners far less attention than the "fiscal cliff" clock. Elected officials continue to allow the immediate to trump the important. . . .
In successive administrations, the country has spent trillions in temporary tax credits and short-term "stimulus" to goose growth by the next election. What do we have to show for this spending surge? Modest growth, declining incomes and a level of national debt that undermine our long-term prospects. . . .
But the deeper failing is one of essential fairness. . . . And failing to deal with runaway spending will burden the country's children with higher interest rates and a debt bomb that will come due in their lifetimes.
Third, too many politicians appear more eager to divide the spoils of electoral victory among their own than to increase the size of the economic pie for all. The grab-bag of special tax favors under the guise of the recent fiscal-cliff deal is only the latest example.
Crony capitalism and corporate welfare aren't just expenses we cannot afford. They are an anathema to economic growth. They deny opportunities to aspiring people and companies who seek to better their lot. They ration opportunity based on things other than merit and hard work. They further ensure that poor children—who already are disadvantaged by failing schools, inadequate health care and little access to necessary resources—will never get the chance to break the cycle of generational poverty through education.
Some individual Americans are surely better off than they were many years ago. The more probing question is whether America is better off. That can only be true if the hopes and aspirations of the next generation are achievable.
The country must find the courage, conviction and compassion to fix what ails it. The opportunity to advance real reform is still possible. But failure to reform the entitlement culture, reaffirm long-run objectives, and re-establish a common purpose will mean a dimming of opportunities for American children today and for future generations. And a great nation will have ceded more than its greatness, but its goodness."
Summing Up
Facts are facts, the truth is the truth and the future will be whatever we make it to be.
It's up to us.
There is no time or reason to assign blame for how we arrived at our present place in time or our currently unsustainable debt and deficits, combined with a lousy economy and a lousy system of government run public education and health care.
We are where we are, but we need not stay where we are.
We need to start telling the truth to each other, and the truth is that the government is too big and spending too much money on the oldsters.
The truth also is that self reliance in America needs renewed emphasis and encouragement, as does the value of education and knowledge.
We have to change a lot of things, including our politics, if we are going to maintain our heritage as the single best place on earth to live, get an educaiton, work and raise a family.
That's my take.
Thanks. Bob.
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