Original Proposal - 173 Views Before Being Transplanted Here

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Click here for a short background summary of the two Deficit-Reduction Commissions.

We will focus on the two issues that will dominate both the 2011-2012 Congress and the 2012 Presidential Campaign –- deficit reduction and the failure to finance 2010 Health-Care Reform (the Congressional Budget Office rated it “deficit neutral” on the assumptions (1) that half of the admitted cost could be taken from Medicare which is already facing bankruptcy and therefore won’t happen, (2) that half of the admitted cost could be dumped on the states in the form of an increased Medicaid mandate when the states are already bankrupt, and (3) that most of the non-admitted cost in the form of higher premiums for health insurance now required to be purchased by healthy young people is constitutional which is under challenge in litigation by 22 state Attorneys General).

This all against the backdrop of the Tea Party movement and the bankruptcies of Greece, Ireland, Portugal, etc.

Please help us formulate a third way (vs. the obvious relish with which the two established parties want to demagogue the tax rate for the top personal-income-tax bracket which will probably lead to gridlock).

The third way would be to kill four birds with one stone by financing social security and universal health care with a European-style (that is, dramatically higher) gasoline tax. The four birds = adequate financing for social security and universal health care, reducing carbon emissions, reducing the international balance-of-payments deficit, and increasing national security by reducing the reliance of the U.S. and its allies on foreign oil.

A potential fifth bird, as discussed briefly at our 1/12/2010 meeting, is the preservation of (vs. mere financing for) Universal Health Care. Attended by 4 attorneys and 4 non-attorneys, the meeting considered Tom Chancellor’s Discussion Outline and then considered how the US Supreme Court is likely to decide three cases that are likely to reach it in the near future = (1) the gay-rights litigation currently pending before the Ninth Circuit, (2) the 43 detainees at Guantanamo Bay whom the Obama Administration will not grant trials (civilian or military) and will be held as enemy combatants until the end of the War on Terror (please see the materials for our 12/15/2010 meeting), and (3) the litigation brought by 22 state Attorneys General challenging the constitutionality of 2010 Health-Care Reform (specifically arguing the requirement to purchase health insurance is not Constitutional under the Commerce Clause because, if the failure to act comprises interstate commerce, then there is nothing that is not interstate commerce and presumably America’s Founders thought that there must be something that was not interstate commerce if they specified it as a requirement for federal legislation.)

At our 1/12/2010 meeting, the consensus was that with a majority of “strict constructionists” on the Supreme Court (as well as a sixth Roman Catholic member vis-à-vis the gay-rights litigation), the Supreme Court will rule AGAINST gay rights, enemy-combatant rights, AND THE CONSTITUTIONALITY OF HEALTH-CARE REFORM!!!

So our looming Six-Degrees-Of-Separation E-mail Campaign proposing a European-style (i.e., large) gas tax to finance social security and universal health care may be the only way to save them!!!
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Original Proposal - 173 Views Before Being Transplanted Here

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Recent Reports By Two Deficit-Reduction Commissions
by solutions » Tue Nov 23, 2010 1:58 am
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I recommend we focus on recent reports of two different Deficit-Reduction Commissions = (1) on 11/10/2010, the two Co-Chairs of President Obama’s Deficit-Reduction Commission issued their blueprint for consideration by the 18 members of their bi-partisan commission (and, obviously, by the public at large since it was issued as a press release); and (2) on 11/17/2010, the Bipartisan Policy Center issued its final report [there follows below the MacNeil-Lehrer (aka PBS Newshour with Jim Lehrer) 11/17/2010 transcript of an interview of the bi-partisan co-chairs who led the study by the Bipartisan Policy Center].

President Obama created his Deficit-Reduction Commission by Executive Order which provided (A) that he would appoint 6 of its 18 members, Congressional Democrats would appoint 6, and Congressional Republicans would appoint 6 and (B) that the Commission cannot issue an official report unless 14 of its 18 members concur, thereby giving the 6 members appointed by the Congressional Republicans a veto.

According to the Washington Post (3/13/2010) reporting that the Congressional Republicans, after widespread speculation to the contrary, would indeed agree to appoint 6 members to the commission – “If 14 members can agree on a plan to raise taxes, cut spending and reform costly entitlement programs such as Social Security and Medicare, House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry M. Reid (D-Nev.) have pledged to bring it to a vote in Congress before year's end.”

It would appear that the issuance of the blueprint by the two Co-Chairs is a tacit admission that agreement by 14 of the Commission’s 18 members will not be available for any plan.

It should be noted that neither of the two Co-Chairs of President Obama’s 18-person Deficit Reduction Commission (Erskine Bowles and Alan Simpson) were among its 6 members appointed by Republicans = U.S. Senators Judd Gregg, Michael Crapo and Thomas Coburn appointed by Senate Minority Leader Mitch McConnell, and Representatives Paul Ryan, David Camp and Jeb Hensarling appointed by House Minority Leader John Boehner.

The two co-chairs were among President Obama’s 6 appointees.

Co-Chair Erskine Bowles, a Democrat, is the President of the University of North Carolina and served in various capacities in President Clinton’s White House including Chief of Staff and Deputy Chief of Staff.

Co-Chair Alan Simpson, the sole Republican among President Obama’s 6 appointees, was a U.S. Senator 1/1/1979 – 1/3/1997 during which he served as Republican Whip (the No. 2 Senate Republican) under Bob Dole 1/3/1985 – 1/3/1995.

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The other report was issued by the Bi-Partisan Policy Center.

It began its project before President Obama announced that he would also try to form a Deficit-Reduction Commission (“try” because until 3/12/2010 it was not clear that Congressional Republicans would agree to appoint any members to the President’s Commission).

The two leaders of the study by the Bi-Partisan Policy Center were –

Republican Pete Domenici was a U.S. Senator from 1/3/1973 to 1/3/2009 when he retired. During his 36 years in the Senate, he chaired the Senate Budget Committee from 1/3/1981 – 1/3/1987 during the Reagan Administration and again when the Republicans regained control of the Senate 1/3/1995 – 1/3/2001 (he later chaired the Senate Committee on Energy and Natural Resources for 4 years).

Dr. Alice Rivlin, is a Democrat and Washington icon. After graduating from Bryn Mawr (one of the “seven sisters”) and obtaining her PhD from Harvard, she has alternated between the Brookings Institution (1957-1966, 1969-1975, 1983-1993 and 1999 - the present) and various prestigious governmental posts = (A) the first director of the newly-established Congressional Budget Office (1975-1983) where she was a vocal critic of Reaganomics, (B) Deputy Director (1993-1994) and Director (1994-1996) of President Clinton’s Office of Management and Budget, and (C) a Governor and Vice-Chair of the Federal Reserve (1996-1999).

Dr. Rivlin was also named by President Obama as one of his 6 appointees to his Deficit-Reduction Commission.

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Transcript – MacNeil Lehrer Report (aka PBS Newshour With Jim Lehrer) – 11/17/2010

JIM LEHRER: Now: the continuing debate over deficits and the debt. Judy Woodruff backgrounds the story and then hears from two more leading voices.

JUDY WOODRUFF: For the second time in as many weeks, a pair of leading budget watchdogs warned, the U.S. is heading down a death spiral if drastic changes are not made to the country's finances.

Today, the recommendations came from the Bipartisan Policy Center and were led by two people with vast budget experience. Former Senator Pete Domenici, a Republican, and Alice Rivlin, a Democrat who once served as White House budget director and head of the Congressional Budget Office.

Their recommendations call for a mix of changes in taxes and spending over the next several years, including a Social Security payroll tax holiday next year, cutting and simplifying individual and corporate tax rates, creating a new 6.5 percent national sales tax, and big cuts in spending, including a four-year freeze on domestic programs, a five-year freeze on defense.

Last week, the co-chairs of a presidential commission put out their blueprint. And, last night, former Senator Alan Simpson and former White House Chief of Staff Erskine Bowles discussed the magnitude of the problem with PBS' Charlie Rose.

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MacNeil Lehrer Video Clip of Erskine Bowles and Alan Simpson Being Interviewed By Charlie Rose on PBS

ERSKINE BOWLES, co-chairman, National Commission on Fiscal Responsibility And Reform: We fought two wars. We put in a new prescription drug benefit in. So we've got a lot of things that have created this.

Plus, we had this horrendous economic recession. And we've had to spend some money to get out of there. So, it's easy to see how we got here. What we have to talk about is, how can we end it? How can we get out of it?

ALAN SIMPSON, co-chairman, National Commission on Fiscal Responsibility And Reform: And if you tell people every dollar that's spent by this country, we're borrowing plus 41 cents -- I think it's 39 now, but whatever -- I mean, that's something any American can understand.

They understand that at the bar stool in Buffalo, Wyoming. You cannot -- every buck we spend, we're borrowing 40 -- 40 cents. This is madness.

ERSKINE BOWLES: We can't tax our way out of it. You know, we -- people who want to do just taxes, you'd have to raise the maximum marginal rate to 80 percent. You'd have to raise the corporate rate to 70 percent. You'd have to raise the capital gain rate to 50 percent, if you're just going to do taxes.

We can't cut our way out of it. People say, oh, well, let's just -- let's just cut the budget.

If you just rely on deficit reduction through cutting, and you want to exclude Social Security and Medicare and defense and, of course, interest, then you'd have to cut everything else by about 60 percent to 65 percent.
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JUDY WOODRUFF: But some of the proposals have met with fierce resistance on Capitol Hill. For his part, President Obama has said tough decisions will have to be made.

And for more about their proposal and other ideas being discussed, we are joined now by former Budget Director Alice Rivlin and former Senator Pete Domenici.

It's good to have you both with us. Thanks very much.

PETE DOMENICI (R), Former U.S. Senator: Thank you. Thank you very much.

ALICE RIVLIN, former director, Congressional Budget Office: Good to be here.

JUDY WOODRUFF: Now, let me just start by saying, with all due respect, you have done a lot of work here over the last year, but why not leave this up to the presidentially appointed commission?

Alice Rivlin, you're a member of that commission. It's already created waves. It's dramatic. Why not leave it up to them?

ALICE RIVLIN: Well, we're not taking over for them. We're just offering our ideas.

We got a group together. And this started before there was a presidential commission -- that the senator and I agreed to co-chair this group. We got 19 people from across the country, former governors and senators and mayors and some budget experts, and created this plan.

So, we think it's a very good answer, not only to how do we get out of the recession, but how do we solve this big debt problem. And we're offering it in hopes that it will be taken seriously.

JUDY WOODRUFF: Senator...

PETE DOMENICI: But, Judy, we have got to understand that the president's commission doesn't have a plan. We have a plan. Ours is completed. There's consensus. Everybody on it was: It's a plan. I sign on.

JUDY WOODRUFF: Of your task force?

PETE DOMENICI: Of our task force.

JUDY WOODRUFF: Part of the Bipartisan Policy Center.

PETE DOMENICI: Bipartisan -- yes, Bipartisan -- and so we started it, and we have to finish it.

And it's terrific. It's the best plan ever seen. And I'm hopeful that Erskine Bowles and Simpson do something, but, as of now, they have a series of ideas, many of which are the same as ours or similar. And we have an obligation now to get ours out there. And, frankly, I'm going to repeat myself, but to both get the recession out from under us and get ourselves moving again with a growth-oriented country that has a future, our plan is just a terrific plan.

JUDY WOODRUFF: Well, let me -- let's talk about some of the specifics.

I mean, one way your plan, Alice Rivlin, would differ from this commission, the Simpson-Bowles plan, is that you would suspend the Social Security payroll taxes for a year. That's good for people, in that they wouldn't have to pay the taxes. It would add to the deficit by $650 billion.

So, my question is, how do you -- your -- one of your principal goals is to cut the deficit, but you're adding to the deficit when you start out.

ALICE RIVLIN: Yes, we think that the country faces two big problems. One is, we have to get out of this recession. We have to be -- we have turned the corner, but the economy is not growing fast enough, and unemployment has got to come down faster.

So, we think that the payroll tax holiday, which puts money in the pockets of all working people, and also help employers, is a good thing, but it's a temporary thing. Yes, it would add to the deficit. But, at the same time, simultaneously, we believe that the Congress should adopt a broad range of deficit-reduction measures, and that that itself will help us get out of the recovery.

JUDY WOODRUFF: And, Senator...

PETE DOMENICI: But you have got to understand -- you have got to understand one thing. We have got to make the point for your viewers. We can afford a one-year holiday, because, at the end of our work, when we have cut everything we can, when we have reformed taxes, we put on a two-year -- it's implemented in two years -- sales tax on consumption that will pay for the cost of the one-year -- one-year holiday.

So, we don't add to the deficit.

JUDY WOODRUFF: So, you do impose -- you would impose a 6.5 percent national sales tax. And you would lower -- you would simplify the tax code...

PETE DOMENICI: Lower the income tax.

JUDY WOODRUFF: ... lower income tax, corporate tax rates. As you know, there are progressives out there today who are saying what you're doing is a big hit on the backs of working people.

PETE DOMENICI: Well, not so. I mean, she can tell you with more specificity, but it's quite the opposite. Our plan, in its totality, is more progressive than the current income tax system of our country, by far, because we have the reform in the tax code. Plus, we kept two very major programs for child care and the low-income workers. They have been improved, and they get very good benefits. And when you put those in the mix, it's more progressive than what we have got today.

JUDY WOODRUFF: You also, as we said, made some pretty dramatic cuts in spending, in both domestic and -- freezes in both domestic and defense spending across the board.
Why is across the board, Alice Rivlin, better than looking at it program by program?

ALICE RIVLIN: Oh, we don't intend this to be across-the-board cuts. We expect...

PETE DOMENICI: On everything.

ALICE RIVLIN: On everything. What a freeze means is that the total is frozen. The Defense Department, for example, would have to figure out how to live within a fixed total. Now, that means that they could phase out and eliminate some programs that are no longer necessary or are low-priority, as Secretary Gates has already started doing, but emphasize the things that are high-priority and are needed, similarly on the domestic side.
You wouldn't want to cut across the board an equal percentage. That would be crazy.

PETE DOMENICI: Besides, Judy, you've got to know and our -- your listeners have to know that, on the domestic side, there are literally thousands of programs.
We wouldn't have -- it wouldn't be right for us to go through and talk about each one. We just said the pot won't grow for four years. And if it's capped, you're going to have to go within that domestic program and decide which ones you want and which ones you don't.

JUDY WOODRUFF: But the perennial problem with cutting is that people -- everybody wants to reduce the deficit, but, when it gets to specifics, that's when you run into problems.

How do you plan to sell this on the Hill or to the American people, for whom many of these programs are popular?

PETE DOMENICI: Well, I will take it first.

I believe the reduction in domestic appropriated accounts, which we're talking about now, the pot of money with a cap on it, and the pot for defense, and with a cap on it, that's much easier to sell than most parts of this budget.

The parts that are hard to sell are the fact that we must have a new source of revenue after we're finished with all the cuts. We can't cut enough to get ourselves where we want to be in terms of the debt. And so we have to put a new tax on. That's the part that people are going to get angry about.

But we have the make them understand that we have a silent killer out there, and we have got to fix it. And fixing it means you might have to have some new revenue, like we recommend.

JUDY WOODRUFF: And that is going to run into its own buzz saw.

ALICE RIVLIN: Yes. Anything that you do that fixes this big looming debt problem, where the debt is -- if we do nothing, is escalating very rapidly, anything you do is going to be unpopular, whether it's the spending side or on the revenue side.

So, yes, some of the things that we suggest, by themselves, would be very unpopular. But the point of this is, do it altogether and we will avoid the crisis that we think would destroy the U.S. economy.

JUDY WOODRUFF: You both know this town very well. How much do you -- how realistic is it to believe that a significant piece of what you're proposing will be enacted?

ALICE RIVLIN: Do you remember the '90s? We...

JUDY WOODRUFF: I do.
(LAUGHTER)

ALICE RIVLIN: We got a surplus. We both worked on that.

And we got the budget from a considerable deficit into surplus. And the way it was done was some tax increase and holding down spending. The caps on spending are the same idea that we had back in the '90s. And it worked. It worked. Yes, it worked.

PETE DOMENICI: I want to say this one thing about this. And, as far as I'm concerned -- tell me what I'm talking about, because I have forgotten.

JUDY WOODRUFF: About whether you believe that this will actually be solved, that the members of Congress will vote...

PETE DOMENICI: Oh. Yes. We were able to -- we were able -- we were able to do bipartisan work and get some big problems solved. This problem is many, many more times difficult for America. We're going to be ruined as a nation and become a second-rate country if this debt is allowed to continue like it is.

So, we have a bigger, a more just reason to convince people. We convinced them then to work together. We ought to be able to now. It won't be easy, but I believe leadership, including leadership from the president, is going to make this a war, a war on this debt. And, if we do that, we might win.

JUDY WOODRUFF: On that sobering note, Pete Domenici, Alice Rivlin, thank you both.

ALICE RIVLIN: Thank you, Judy.

PETE DOMENICI: Thank you, Judy.

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Pelosi’s Opposition To The Blueprint Of Obama's Co-Chairs

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Pelosi’s Opposition To The Blueprint Of Obama's Co-Chairs
Posted by solutions » Tue Nov 23, 2010 10:26 pm
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My proposal set forth above stated that the Washington Post reported on 3/13/2010 that (A) the Congressional Republicans, after widespread speculation to the contrary, had indeed agreed to appoint 6 members to the 18-person commission and (B) “If 14 members can agree on a plan to raise taxes, cut spending and reform costly entitlement programs such as Social Security and Medicare, House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry M. Reid (D-Nev.) have pledged to bring it to a vote in Congress before year's end.” (The quote is from the Washington Post article.)

House Speaker (cum Minority Leader next January) Nancy Pelosi has been widely reported since the 11/10/2010 issuance of the “blueprint” by the two Co-Chairs of President Obama’s Deficit-Reduction Commission, to find the “blueprint” DOA (dead on arrival).

It is ironic that President Obama’s Executive Order specified that no official report could be issued by the Commission unless 14 of its members agreed.

Ironic because the concurrence of 14 members was intended by President Obama to give a veto to the 6 members on the 18-person commission appointed by Congressional Republicans.

Since it also gave a veto to the 6 members appointed by Congressional Democrats.

Yesterday (Nov. 22), one of Nancy Pelosi’s appointees to the President’s Commission (Representative Jan Schakowsky) issued her own press release on how to reduce the deficit.

The press release proposed reducing the deficit by $441 billion by (A) reducing defense spending by $110 billion, (B) raising corporate taxes by $132 billion, (C) taxing capital gains the same as ordinary income, for an increase of $150 billion, and (D) a number of miscellaneous items producing the remaining $49 billion.

Granted Rep. Schakowsky is only 1 of the 5 members it would take to block an official report under the requirement of President Obama’s Executive Order that 14 of the 18 members must concur for a report to become official, but it would appear that “that ship (the possibility of any official report) has sailed.”

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Nonetheless, we should weigh in since this is bound to become a topic that will receive considerable attention in the next Congress – particularly with Republicans and Blue-Dog Democrats looking over their shoulders at the Tea Party demands for balanced budgets and reduced spending.

And the topic will be particularly important as Republicans attempt to dismantle the new health-care legislation. After all, the cost of the new legislation was rated as deficit-neutral by the Congressional Budget Office based on the assumptions (A) that half a trillion dollars would be taken out of Medicare which was already projected to be bankrupt in short order, (B) that half a trillion dollars would be loaded onto state governments through Medicaid when the states are already bankrupt, causing approx. two dozen of the state Attorneys General to join in a lawsuit attempting to void this portion of the financing, and (C) that the remainder of the cost would not even pass through the U.S. government’s budget because it would take the form of increased health insurance premiums imposed on the healthy and the young as insurance companies are prevented from taking such things as pre-existing conditions into account in setting rates.

It strikes me that we should re-visit our own grid-lock on 4/14/2010 when we failed to reach a consensus for a six-degrees-of-separation e-mail campaign recommending a European-style gasoline tax that finances Social Security and Health Care.

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