Posts Tagged ‘Congress’

A lot of conservatives/Trump voters are confused as to why Liberals are saying that the tax bill Congress passed today will be bad for entitlement programs like Social Security and Medicare.  Below is a brief explanation as to why, but first let’s stop calling them “entitlements” because they aren’t.  It’s not like welfare, which you are “entitled to” if you meet certain criteria and into which you don’t have to contribute.  Call Social Security “deferred payments” or a “pension”.  For that matter call Medicare “pre-payed health insurance”.  But they’re not entitlements because you paid into them!  Okay, got that off my chest.

Social Security has always been a “partially reserved” fund.  In other words, like many pension funds, it was never “fully funded” 100%.  Simply put, every penny we have put in isn’t there for a lot of very complicated reasons I won’t get into here (see Note 1).  For the most part how much the fund contains at any given point depends on how well the economy has been doing and each generation pretty much pays for the next generation.  That’s why we hear stories like “Social Security only funded until 2034”.  That year could be later if the economy has a good run or it could come sooner if we have another recession/depression.  Medicare works similarly.

Since the health of those two “deferred payment” programs depends on the economy and the Deficit (see Note 2 at bottom) is one of the leading indicators and factors that affects the health of the economy, any increase in the Deficit forces the US to borrow more, which in turn increases our Debt.  The Tax Bill passed today (see Note 3) will decrease Revenue and Congress has not offset that decrease in Revenue by reducing how much we spend.  So the GOP, who used to accuse the Democratic party as being “Tax and Spend Liberals” has now officially become the party of “Taxes for Thee but not for Me and My Wealthy Friends”–a tried and true method to destroying any economy.

In the past one of the most important ways the GOP has tried to bring the deficit down is to make changes to Social Security and Medicare.  They can try to push back the age at which we can start receiving Social Security–this is called “full retirement age” (see Note 4).    The GOP will say they can save millions by just pushing back that age for you and I and it is true, it will save money.  But it will make our lives infinitely harder.  Maybe I won’t be able to continue working when I’m 67.  Last I heard they are talking about pushing it back to 70.  My grandparents died at 75. What if I pass away then?  That means I’ve been working since I was 14 and contributing to Social Security all those years and if I’m lucky I might get 5 years of benefits out of it.  That’s nuts and patently unfair.

Not only can they do that, they can change the formula for how much you can receive if you remain employed.  For now, if you try to get Social Security early, you can only collect a certain amount.  For example in 2015  your benefits would have been temporarily reduced by $1 for every $2 you earned above $15,720.   This “earning limit” gets changed every year.   So the GOP could say that your benefit is reduced by $1.50 for every $2 or say that the earning limit doesn’t increase (and therefore won’t help you keep up with Cost of Living Increases).

In regards to Medicare, they could start “means-testing” (again this is a GOP proposal that’s been around for a while).  This would mean the government would check to see how much you make and say that anyone making above a certain level must pay a greater percentage of Medicare costs.  On the surface this sounds fair.  But the fairness of it depends on what that “income level” is determined to be.  For example, the 2015 poverty threshold for a single individual was $12,082 / year.  Can you imagine living on that?  If you make more than that, the government doesn’t consider you poor.  The same principle will be applied to Medicare means-testing.  The GOP will push for a very low “means” and the already struggling Middle Class will be hit very hard.  If the Middle Class is dependent upon Social Security for retirement (and we have a good idea that they are, see Note 5 ) and the GOP plans on reducing those benefits along with Medicare benefits, then there is going to be a lot of elderly people really struggling.  In fact, an elderly care crisis has already begun.  The timing of this deficit increase, in order to give the wealthy more tax breaks, could not have been worse for the average American.

To sum it up, there are lots of ways that the GOP can affect these two programs that will hurt not only the Poor but the Middle Class, and they’ve been making noises for years that they can’t wait to get their grubby hands on them (Speaker Ryan has said he’s been dreaming of cutting them since college). By passing this tax bill they have essentially created a budgetary crisis for which they will now claim is the reason why they have to change the rules for these two programs. Anyone who voted for Trump and is happy about this Tax Bill better enjoy the pennies they get back in April because they’re not going to be happy further down the road when they have to resort to eating cat food.  Unfortunately it won’t be just Trump voters who will be eating kitty kibble–we all will.

NOTES:

  1. http://www.pewresearch.org/fact-tank/2015/08/18/5-facts-about-social-security/  Just Google history of social security and you can drown in the details if you so desire
  2. Do NOT conflate Debt and Deficit.  They are NOT the same thing.  In simple terms, a budget deficit is the difference between what the federal government spends (called outlays) and what it takes in (called revenue or receipts). The national debt, also known as the public debt, is the result of the federal government borrowing money to cover years and years of budget deficits.
  3. “The plan would permanently drop the corporate tax from 35 percent to 21 percent, while also rewriting the individual tax rules to lower rates and restructure deductions. The plan would cut taxes in 2018 for the vast majority of households, with by far the largest benefits going to the wealthy. Many of the tax breaks are set to expire at the end of 2025, leaving a large section of the middle class to pay more in taxes. But Republicans promise a future Congress will intervene to prevent that tax hike from happening.”  from the https://www.washingtonpost.com/business/economy/gop-tax-bill-passes-congress-as-trump-prepares-to-sign-it-into-law/2017/12/20/0ba2fd98-e597-11e7-9ec2-518810e7d44d_story.html?utm_term=.7cfa59492113
  4. I was born in 1970 so right now that means I can’t start collecting until I’m 67 years old.    Follow the link to find out what your full retirement age is.   https://www.thebalance.com/when-can-i-start-receiving-social-security-benefits-2894602
  5. https://www.forbes.com/sites/patrickwwatson/2017/10/12/boomers-are-not-saving-enough-for-retirement-neither-is-the-government/#5624b5d81a4d
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As you have probably seen if you watch the news that the U.S. is approaching a supposedly “Fiscal Cliff”.   Well without getting into the weeds regarding whether it is an actual cliff or not and whether it is actually needs to be addressed right now, I want to address the conversation that is going on between the White House and Congressional Republicans (if you don’t know or understand why the Fiscal Cliff even exists–see Note #1 at bottom).

First of all the Fiscal Cliff is a man-made object (again Note #1 at bottom), courtesy of Congress–both parties are to blame on this one.  But the Congressional GOP has been demanding that the President give them a plan to avoid the cliff because Heaven Forfend they come up with their own plan!  Anyway, the point of his presenting a plan means they can start the conversation on how to avoid these huge cuts or at least make the cuts more palatable and less destructive. So the President offered up a plan yesterday to House Speaker Boehner.  Basically the plan seeks to reduce the 10-year deficit by $4 trillion (see Note #2 for details of plan).

What was the Republican response?  “Okay, let’s break this down and talk about it.”  No, they didn’t say that.  Did they offer a counter proposal?  No, they didn’t do that either.  Instead, they said the proposal was “outlandish and brushed it aside as unserious”.  I don’t know about you, but a $4 trillion cut in the deficit sounds pretty awesome and serious to me.  Cutting entitlements, which is exactly what the GOP wanted to see, looks pretty serious to me.  Increasing tax revenue by raising rates on the wealthy (since they’re at their lowest since about 1950) appears pretty serious to me (see Note #3).  This IS a reasonable and serious proposal.

But no, Republicans won’t even have a conversation about it.  House Speaker Boehner had this to say:

The American economy is on the line. And this is a moment for adult leadership.

This really bothers me and let me tell you why.  I am involved in a court case and I have experienced something similar to this type of negotiation.  Basically, without getting into detail, I was accused of not trying to consult with someone about an important and ongoing conflict.  The truth of the matter is and always has been that it’s always been a one-sided conversation.  Just like what the President has been going through with the Republicans.

For instance, I don’t know how many times I approached the other person both verbally and in writing and said, “let’s discuss this”, “Can we talk about this?”, “What about this option?  How would x feel about this?  What are your opinions on option 1, option 2 etc?”, “Have you talked to x about this?”, “What action have you taken?”, “Here’s some suggestions in case you’re too busy to do the research.”   I’ve even begged, “Will you please tell me what’s going on?  You should be consulting with me.  Why won’t you consult with me?  Please consult with me….”

What answers did I get?  In some cases no response at all.  Zilch, nada, nothing. Other times I got shot down with a “no, that won’t work”, “no, that’s not possible”, “no, it’s not a problem”, or just a plain “no”, etc.  So now, months after all that occurred I have an attorney saying I wasn’t really trying, that I didn’t negotiate in the right way, and that I didn’t provide the right information.  Their position is that I am the one who didn’t do what was necessary for proper “consultation”.  No acknowledgment of the other party’s lack of a response and unilateral-decision making.

Have you ever been in that kind of situation?  That kind of refusal to engage, to acknowledge that another has any role to play in a major life decision is, well, maddening.  It’s like talking to a person who is hard of hearing.  You can’t get their attention and even when you do, they still don’t understand what you’re saying. Sometimes the hearing impaired get angry with you for not communicating better even if you’re shouting at the top of your lungs and doing everything in your power to communicate.

Why would the other party do this?  First of all, it’s a means of controlling a situation that if the other party did engage in any meaningful way they would have a good chance of losing.  In my case, if the other party had actually communicated with me then the other party would be seen as refusing to compromise–that would be worse than no communication at all.  Furthermore, if they had taken action on their own and taken the issue to court before I did, they probably would have lost by that means as well and would have been forced to compromise in a way they don’t want.  So, it’s control and its an inability to achieve victory by other more legitimate means.  The Republicans likewise face this conundrum.  According to Krugman,

…Republicans are trying, for the third time since he took office, to use economic blackmail to achieve a goal they lack the votes to achieve through the normal legislative process.

Another reason that the other party would do this is very simple:  they just really hate you.  Again, in my situation I’m sure that the other party despises me (and the feeling is mutual) and I think that, at least, subconsciously they want to punish me.  And nothing is more punishing than when someone you are forced to engage with (like an ex-spouse)  for the sake of someone you love (like a child) ignores you even exist.  If it was just my feelings being hurt, I’d be fine with being ignored.  But it isn’t about me….it’s about my child’s welfare. It’s like confronting  a perpetrator who has someone you love hostage and the perpetrator purposely ignores you all the while enjoying the hell out of how much it frustrates you and ignoring how difficult it is on the hostage.

Again, the Republicans have similar motivations and are using the American economy similarly as a hostage. They really, really, really don’t like “that one” in the White House.  They’re pretty upset and surprised by this month’s election losses.  Hell, they didn’t like the loss in 2008 and were sent over the edge in 2010 when health care reform was passed (see Note #4).  So much so that Minority Leader of the Senate Mitch McConnell said that his number one goal was to ensure that the President failed so that he would be a one term President (see Note #5).

So they hate him and they want to make him fail.   One effective way to do that is to 1) not engage and 2) if you do engage, engage as minimally and disingenuously as possible.  Who is at risk? The economy and the middle and lower classes.  The rich and corporations will be fine as evidenced by the fact their profits have increased during the second worst economic downturn in U.S. history.  Yep, they came out of it in fine fettle. The rest of us, not so much.  Essentially, the Republicans are playing chicken with our welfare.

The longer this kind of BS goes on, the more I esteem the President’s patience. I would have cut one of those biotches* a long time ago in frustration. I hope the American people see through their bluster and understand what this intransigence is really all about.  It’s about their need to control things, their dislike/hate of the President, and about their welfare and it has nothing to do whatsoever with the economic welfare of the American people.

So who are the adults in this conversation?  It sure as hell isn’t the side that constantly says “no” and refuses to engage in any meaningful way.

NOTES:  

1.  This “cliff” came about because back in 2011 the GOP decided it was scared of the huge deficit that they helped to create.  So they wanted to create a “supercommittee” to find cuts in government spending in order to reduce it.  The deal worked out between the parties was that the bi-partisan committee should be forced to come to an agreement on $1.2 trillion in cuts (to make the sides negotiate in good faith and to force action on both parties).  In order to do this, Congress passed   the BCA (Budget Control Act) in 2011 and in it there was a list of specific cuts to Defense Spending, Health Care and many other crucial industries amounting to $1.2 trillion that would be automatically made on Jan. 1, 2013.  This list of spending cuts was called a “sequester”, also referred to as the “sequestration”.  Congress said IF the supercommittee didn’t come to an agreement, those cuts would occur.  A negotiating Damocles sword if you will.  Well the committee didn’t come to an agreement and the sequestration was going to happen, the GOP blamed it all on the President (somehow?!) and now their shitting in their pants because it’s going to happen.  The press and the government has been calling this deadline of those cuts going into effect as a “Fiscal Cliff”.

2.  $400 billion in Medicare cuts, $1.6 trillion in tax hikes over 10 years by increasing tax rates on capital gains and dividends and by reducing the number of deduction for top earners, and some stimulus spending like $50 billion infrastructure investment, a mortgage refinancing program, and some smaller tax cuts/credits

3.    In fact, without increased revenue it is probably impossible to cut the deficit through cuts alone without basically destroying the Federal Government and all of it’s important services.  So revenue has to be increased AND cuts to programs have to be made–history tell us this and the math tells us this.  

4.  Don’t believe the right’s hype that Obamacare was a big surprise, rushed through Congress and shoved down the people’s throats.  The President discussed, presented, cajoled and debated the issues regarding Healthcare Reform over a period of 14 months with Congress and the public.  At one point, he took on an entire room of opposed Republicans in a summit that was televised and he whooped their asses.  If you haven’t watched this video, do so. It’s a primer on how to school intransigent, ill informed assholes politely, patiently and professionally.  So for them to say it was “sprung” on them is total, utter crapola.

4.  Looks like Turtle Man failed miserably then!  Ah, schadenfreude can be so, so sweet….

*Just a joke, the only cuts I administer are verbal 🙂