Barack Obama: President Delivers Debt Reduction Plan to Joint Congressional Deficit Committee

As I suspected, in part, President Barack Obama delivered his deficit reduction plan to the Joint Committee on Deficit Reduction.

I have yet to read all of the contents, but one thing I did notice is that the proposal for federal employees to “contribute” more to their pensions is really a giveback of salary (because of the operation of the Civil Service Retirement and Disability Fund). I guess “Third Way” got its way in part (1.2% rather than 5.8%). But knowing how this town works another time that the media whips up the public about federal employees, watch for the so-called contribution to increase. [With all of the givebacks and pay freezes, federal salaries may never keep up with the cost of living in this expensive country.]

Will the plan get a majority vote and get a expedited vote in Congress? I do not know. Maybe some of the very bitter provisions can be tolerated if  (very big “if”) every income class participates in addressing the lack of revenue problem.

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Deficit Committee: Co-Chairs Patty Murray and Jeb Hensarling Select Chief of Staff, Senate Tax Counsel Mark Prater

The co-chairs of the Joint Committee on Deficit Reduction (JCDF) have selected Mark Prater, Republican Senate Finance Committee Counsel, as the JCDF’s chief of staff.

Miscellaneous information on Mr. Prater is available at Legistorm.com (www.legistorm.com/person/Mark_A_Prater/8071.html).

Joint Select Committee on Deficit Reduction

Chief of Staff:  Mark Prater

Selections of Senator Harry Reid, Senate Majority Leader

Nominee

Net Worth (2009)

Sen. Max Baucus (D-MT) $13,013 to $204,000
Sen. John Kerry (D-MA) $182,755,534 to $294,869,059
Sen. Patty Murray (D-WA) $449,017 to $1,185,000

Source: www.opensecrets.org.

Selections of Senator Mitch McConnell, Senate Minority Leader

Nominee

Net Worth (2009)

Sen. Jon Kyl (R-AZ) $519,090 to $746,082
Sen. Rob Portman (R-OH) $5,544,075 to $17,468,999
Sen. Pat Toomey (R-PA) $1,770,062 to $4,900,999

Source:  http://www.opensecrets.org.

Selections of House Speaker John Boehner

Nominee

Net Worth (2009)

Rep. Dave Camp (R-MI) $2,966,100 to $10,515,000
Rep. Jeb Hensarling (R-TX) $928,025 to $2,270,000
Rep. Fred Upton (R-MI) $7,010,173 to $25,651,000

Source:  http://www.opensecrets.org.

Selections of Nancy Pelosi, House Minority Leader

Nominee

Net Worth (2009)

Rep. Xavier Becerra (D-CA) $100,054 to $1,424,999
Rep. James Clyburn (D-SC) $212,010 to $582,000
Rep. Chris Van Hollen (D-MD) $148,007 to $445,000

Source:  http://www.opensecrets.org.

Third Way: Evaluating Group’s Document “Saving Social Security”; Proposal to Raise Retirement Age Ultimately Denies the Fact of Mortality

Continuing on with the evaluation of the Third Way document “Saving Social Security”, I think that Third Way’s proposal about increasing the retirement age fails to recognize that mortality is reality; no amount of work will avoid this fact. The retirement age was already increased to 67; that age should be the maximum age.

After a lifetime of work, who would want to continue working full time until 70 (or older)? Some judges and members of congress do, but they have lots of staff assistance to complete their jobs.

I think it is reasonable for people to take advantage of their remaining good health to enjoy activities they could not get to do at a younger age.

Third Way: Evaluating Group’s Document “Saving Social Security”; Proposed Increase to Low-Income Seniors Not Worth the Effort (Net Increase Low)

It’s galling to hear all of the ideas coming forward about the Social Security and Medicare programs as these are not appropriated programs. These programs are funded by the people of the United States through the Federal Insurance Contributions Act (FICA) tax.

The people’s problem is not with the programs but with their politicians who have diverted the “trust fund” monies (take the cash from the tax assessment into the general funds, then Treasury issues a nonmarketable bond for that amount and puts it into the Social Security trust fund). When the Baby Boomer generation was in their active working years, there was a lot of money in the Treasury. Given the composition of the U.S. government revenues, the amount of money that was seen as excess may have been from FICA monies. If that were the case, the money should not have funded “tax cuts” or any other programs unless a method of repaying the funds was known.

The government did not preserve the excess funds to provide for the inevitable cash-in period occurring now, and so now there are calls to address the need for cash as the nonmarketable bonds are being reached to fund Social Security beneficiaries. One way is to raise revenues on those who received cuts based on the excess FICA monies. The group Third Way proposes another confusing, complex, and ultimately unhelpful solution geared to undermine confidence in the programs while using magnificent words to describe the program. I hope to evaluate each major point the Third Way group identifies in its documents over future posts. I’ll start with their first point.

  • Change formula to increase benefits for low income seniors (that is, to change primary insurance amount from 90% to 95%, decrease it from 32% to 31% in the middle bend point, and from 15% to 12% in the third bend point). This solution is complicated and does not net much money to be worth the change. The increase provided by 95% of $749 is not that much more (0.9 x 749 = 674.1; 0.95 x 749 = $711.55. The result:  711.55 – 674.1 = 37.45 (increase). Thirty seven dollars and some change would not go very far with today’s cost of living.

Deficit Commission: Senate Majority Leader Harry Reid Selects Three Senators for Panel

Joint Select Committee on Deficit Reduction (Bill)

Selections of Senator Harry Reid, Senate Majority Leader

Nominee

Net Worth (2009)

Sen. Max Baucus (D-MT) $13,013 to $204,000
Sen. John Kerry (D-MA) $182,755,534 to $294,869,059
Sen. Patty Murray (D-WA) $449,017 to $1,185,000

Source: www.opensecrets.org.

Given the recent credit-rating downgrade, I am not sure how that fact will affect this deficit panel. I am unsure whether wealthy politically powerful and connected people make these decisions without any citizen’s input is a good idea, especially when it comes to program cuts.

Debt Ceiling: Text of the Budget Control Act of 2011; This Bill Could Have Been Done without the Drama

The text of the Budget Control Act of 2011 is located at the link (debt-bill).

This bill will pass lest rational people be blamed for causing governmental default. I believe that every move in this theatre has been manufactured and orchestrated for dramatic effect, from the President on down. Why else would a Eureka moment occur on Sunday night, allowing for two days for Congress to act? It is all too convenient and neat.

This budget bill is Congress’s job; they deserve absolutely no praise for doing as they ought. (This budget bill would have been produced as a matter of course. It was passed so that the Congressional committee can institute the Biden cuts without any challenge.)

Just wait until the Joe Biden spending cuts are resurrected and rushed through Congress lest “devastating” across the board cuts are instituted; the rich will not have to pay one cent extra. President Obama will never repeal his tax cuts; they will continue while the nonwealthy people pay.

Debt Limit Debate: Cut, Cap, and Balance Bill Did Not Have 2/3 Vote in the House to Begin Const. Amdt Process

I viewed House Speaker John Boehner’s response to President Barack Obama’s speech tonight (7/25/11). Again, Speaker Boehner mentioned the balanced budget amendment. Unfortunately, the House did not satisfy the Constitutional requirement of a 2/3 vote in approval in the House. A “bipartisan” vote (or bare majority) is not enough.

Overall, this stalemate over this debt-limit issue is quite unbecoming and reckless, considering the unknown risks of playing with default fire.

Constitutional Amendment, Article V

Constitutional requirement: 2/3 of 435 (House) (2/3) x 435 = 290
House roll call #606 (on the Cut, Cap, and Balance Act, H.R. 2560) Yeas-234; Nays-190; Abstain-8