“We expect that discussion around entitlements will be a part, a
central part” of efforts to curb federal spending, Mr. Obama said at a
news conference. By February, he said, “we will have more to say about
how we’re going to approach entitlement spending.”
I am no expert at reading the political tea leaves, but given the political costs involved, it is unlikely he said this as a mere feint.
Well, my paradigm has been that once they got past denial that the government was under real threat the Dems would hop to. What they really care about is protecting the government from all manner of threats from the “appearance of corruption” (good work) to terrorists (good job Dems) and now they finally acknowledge a fiscal threat (nice work guys).
Of course, they aren’t going to really reduce costs, they are just going to offload them from the government’s books, so I’m not surprised nor heartened.
I think that this “financial crisis† provides a rare opportunity to make a tax cut that will in the long run reduce the government deficit. If cut taxes are cut by eliminating the SS and Medicare tax it will enable us, political, to later cut the SS and Medicare payouts to the rich and middleclass. It would end the charade that SS taxes are paying into a retirement/insurance plan where people pay for themselves. This charade leads to people who made more money in their work life demanding that they get paid more from SS and Medicare. Eliminating the SS and Medicare taxes would welfare those program enabling us to target them at the truly need cutting the benefit to the rich and middle class.
Nice, Obama is just the man to steamroll over our out of control entitlement state. I’m just putting this out there now, to preemptively support his efforts: anybody who opposes him is a racist.
Big subject, “entitlements”. Entitlements to tax breaks? Entitlements to agricultural subsidies? Entitlements to spend a lot extra for no better health care?
The Obama administration’s agenda under this heading could get real interesting.
This seems more like the overconfidence of the elite than anything else. Bush too hoped to reform Social Security, and Obama, I think it is safe to say, is much more full of himself and much less experienced than Bush.
Well in my retirement planning I assume the PV of my S.S. receipts = $0 and the PV of my Medicare benefits = $0.
Way to go Obama! Fresh from tossing gays under the bus, he now fires a shot across the bow of the Iowa grandmas whose caucus votes put him on the road to the White House. Besides making the Israelis nervous, what other key Dem constituency can he irk even before he takes office?
He needs these people, folks, to create the popular support he’ll require to shove stuff through Congress and cow GOP from using the filibuster. Dems are naturally fractious, and once disunited rarely manage to get it together again.
I may reluctantly give this thread to y81 with his “overconfidence of the elite” call.
Nah, Obama will get away with it because the folks will say to themselves “well, since he really feels our pain it must be the right thing to do.” For Bush, the narrative was “this rich jerk is gonna pad his cronies.”
It’s really simple. Phase it out for younger people who don’t need it, don’t want it, and already believe it’s not going to be there.
Social Security’s problems don’t seem that hard to fix. That doesn’t mean it will be easy to pass a plan, only that designing one to fix the long-term problems isn’t rocket science. The much bigger and much more difficult issue to deal with, both in terms of policy and politics, seems to be health care.
His campaign web site is still up. On it, he talks about establishing a charge on earnings over $250,000 to help finance Social Security and a workplace pension program for people whose jobs don’t have one. Why some people here are so excited when he’s proposed to do things like this is a mystery. Perhaps you know something I don’t, but it seems foolish to think he’s going to have some drastic change of heart.
Tyler, don’t be so gullible. What he means is, he wants a national health care program, which will be sold by saying it will control costs, including costs for Medicare and Medicaid. One problem “solved” by making it much worse. And of course what he means is, don’t panic, keep buying our debt, we’re paying attention to the problem. But he isn’t, not in any real sense.
Could he be thinking about going to means testing for social security?
Or freeing the government to negotiate bulk purchase rates for prescription drugs covered by Medicare?
Those could save some significant money.
Social Security itself isn’t in much trouble and doesn’t represent a big part of the projected deficits. That is because payroll tax is dedicated to it. Indeed, reducing Social Security should mean immediately reducing payroll tax. Otherwise, reducing Social Security to fix the budget problems is essentially a tax increase. The missing trust fund should come out of rescinding Bush’s income tax cuts. That’s where it disappeared to, didn’t it?
My money is on a disorderly collapse of the entitlement programs because no coherent program to reform will be adopted. There are just too many conflicting interests that will hold out.
@Jay whose PV of SS = 0,
I will give you 100 dollars today via wire transfer for the promise you pay me your social security benefits when you receive them.
It may just be innocuous, but I can almost feel my pocket being picked now. I only hope it has more to do with campaign promises than keeping government spending up.
Agree with Rizzo.
The entitlements will be “reformed” when the tired, old, parasite-ridden, rotten, dead tree, known as the “American empire” finally collapses under the weight of all the groups seeking to live off of it. It will be hard to predict when the tree collapses, but my money is betting that it will be led by a reluctance among investors to buy the mountains of debt that Obama is planning on trying to sell into the market or by a default on physical delivery of gold or silver futures by the COMEX.
Well, my money, given his choice of OMB director, would be on him reviving the Diamond-Orszag Social Security proposal. My own two cents is that it was a fairly well thought out proposal that was incredibly (and terminally) wonkish. We’ll see if that proposal is what Obama has in mind, and assuming that is so, I think he’ll have a hard time simplifying this rather complex proposal.
Most of the rightists want more poverty for Americans it seems. I, as a “liberal”, read Marginal Revolution to see what the Right wants to cook up for lower middle class America:
(1) It’s a Depression! As Tyler admits finally. But ignore who caused it?
(2) Some think that even More Tax Cuts for the Rich will help America (we already have the lowest tax rates for the well-off in generations).
(3)Lower income for working people is Good for America according the “Investor” Republican/Libertarian philosophy.
(4)A sense of despair and gloom pervades the Right as they know their support for Bush’s profligate tax cuts did get us in this mess…due to more money from the highest income brackets being parlayed into speculation into unproductive sectors like real estate bubbles and gambling casinos (and little else to show for the largest increase in a five year period for Gnp according to ‘centrist’ Larry Summers post 9/11.
(5)Obama’s fairly centrist (and thus ineffective) and maybe will fail to bring us out of a deep depression…but that’s okay for tyler et al…as Labor Costs will Decrease magnificently to their advantage. (they think.)
(6)The Right fears that “centrism” will fail …and thus a New New Deal (some sort of welfare state) will be necessary.
(7) and the Right fiddles as Rome burns thus the obscure references to desiccated cultural deadends and esoteric ‘marginal’ interests.
(advice) keep reading but open up to reading Yve Smith;s Naked Capitalist and Roubini and others for contrast into real insights into what’s happening with the Real Economy.
(*8) and a revealing blissfully unawareness of the real pain caused by OUR over-Financialized, over-Leveraged economy.
(some solutions are obvious: Spend lavishly at the Federal Level but wisely, Tax the Rich (who failed us) at Much higher marginal rates. Eliminate tax shelters and loopholes, Have Unearned Income also support (entitlement) Welfare needed to prevent higher crime and misery. Remove the tax ceiling on social security–(again the unfairness of not taxing the Rich for this is again addressed by some) As Social Security is the most powerful “bank” the Federal Govt. has.)
(* oh don’t give the tired excuses that the rich already pay soo much…..of course they do as they have all the money due to rising inequity caused by Bush’s tax cuts….but they don’t put much into Social Security and ultimately they pay taxes at a lower rate than the rest of us..)
Alas, a nice New Deal is the least of your problems coming down the pike.
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