November 11th, 2010
WASHINGTON (AP) -- In a politically incendiary plan, the bipartisan leaders of President Barack Obama's deficit commission proposed curbs in Social Security benefits, deep reductions in federal spending and higher taxes for millions of Americans Wednesday to stem a flood of red ink that they said threatens the nation's very future.
The White House responded coolly, some leading lawmakers less so to proposals that target government programs long considered all but sacred. Besides Social Security, Medicare spending would be curtailed. Tax breaks for many health care plans, too. And the Pentagon's budget, as well, in a plan designed to cut total deficits by as much as $4 trillion over the next decade.
The plan arrived exactly one week after elections that featured strong voter demands for economic change in Washington. But criticism was immediate from advocacy groups on the left and, to some extent, the right at the start of the post-election debate on painful steps necessary to rein in out-of-control deficits.
The plan would gradually increase the retirement age for full Social Security benefits -- to 69 by 2075 -- and current recipients would receive smaller-than-anticipated annual increases. Equally controversial, it would eliminate the current tax deduction that homeowners receive for the interest they pay on their mortgages.
No one is expecting quick action on any of the plan's pieces. Proposed cuts to Social Security and Medicare are making liberals recoil. And conservative Republicans are having difficulty with options suggested for raising taxes. The plan also calls for cuts in farm subsidies, foreign aid and the Pentagon's budget.
The document was released by former Democrat Erskine Bowles, a former Clinton White House chief of staff, and Republican Alan Simpson, a former senator from Wyoming.
Acknowledging the controversy involved, Simpson quipped to reporters: "We'll both be in a witness protection program when this is all over, so look us up." Said Bowles: "This is a starting point."
Controversial or not, Bowles said serious action was demanded. He declared, "This debt is like a cancer that will truly destroy this country from within if we don't fix it."
The government reported separately Wednesday that the deficit for last month alone was $140.4 billion -- and that was 20 percent lower than a year earlier. The red ink for all of the past fiscal year was $1.29 trillion, second highest on record, and this year is headed for the third straight total above $1 trillion.
Current deficits require the government to borrow 37 cents out of every dollar it spends.
Still, the plan was rejected as "simply unacceptable" by House Speaker Nancy Pelosi, D-Calif., a top Obama ally.
The White House held its fire. Said spokesman Bill Burton, "The president will wait until the bipartisan fiscal commission finishes its work before commenting." He called the ideas "only a step in the process."
The Social Security proposal would change the inflation measurement used to calculate cost-of-living adjustments for benefits, reducing annual increases. It immediately drew a withering assault from advocates for seniors, who are already upset that there will be no inflation increase for 2011, the second straight year.
The plan would also raise the regular Social Security retirement age to 68 by about 2050 and to 69 in 2075. The full retirement age for those retiring now is 66. For those born in 1960 or after, the full retirement age is now 67.
Better-off beneficiaries would receive smaller Social Security payments than those in lower earning brackets under the proposal, and the amount of income subject to Social Security taxes would be increased.
"The chairmen of the Deficit Commission just told working Americans to 'Drop Dead,'" AFL-CIO President Richard Trumka said in a statement.
From the right, anti-tax activist Grover Norquist -- whose opinions carry great weight among Republicans -- blasted the plan for its $1 trillion in tax increases over the coming decade. But Bowles and Simpson say eliminating costly tax deductions could bring income tax rates way down.
For every $1 of new revenue, the plan demands $3 in spending cuts, and that was acceptable to panel member Tom Coburn, a Republican senator from Oklahoma. "If we do the cuts, I'll go for it," he said. "We may have to go for some revenues at some point."
The entire commission is supposed to report a deficit-cutting plan on Dec. 1, but panel members are unsure whether they'll be able to agree on anything approaching deficit cuts of the size proposed. And even if they could, any vote in Congress this year would be nonbinding, Simpson said.
"This is not a proposal I could support," said panel member Rep. Jan Schakowsky, D-Ill. "On Medicare and Social Security in particular, there are proposals that I could not support."
The release of the plan follows midterm elections that gave Republicans the House majority and increased their numbers in the Senate. During the campaign, neither political party talked of spending cuts of the magnitude offered Wednesday, with Republicans proposing $100 billion in cuts to domestic programs passed each year by Congress -- but with no specifics.
Wednesday's proposal would leave Obama's new health care overhaul in place, while greatly strengthening its cost control provisions, including a board with the power to make cuts in Medicare payments to providers.
For most Americans with job-based health coverage, the biggest change would be to limit or eliminate altogether the tax-free status of employer-provided health benefits, which would provide a stiff nudge to force people into cost-conscious insurance plans.
To deal with the rising costs of Medicare and Medicaid, the giant health care programs for seniors and low-income people, the proposal calls for limiting annual spending increases to no more than 1 percent above the growth rate of the economy.
It outlines a series of strategies to achieve that goal, including changing provider payments to reward quality instead of sheer volume, demanding rebates from drug companies that want to participate in Medicare and raising cost-sharing for Medicare recipients while also putting in place a limit on their out-of-pocket costs.
"It's a very provocative proposal," said a Republican panel member, Rep. Jeb Hensarling of Texas. "Some of it I like. Some of it disturbs me. And some of it I've got to study."
Other proposals by Bowles and Simpson include:
--Increasing the gasoline tax by 15 cents a gallon to finance transportation programs.
--A three-year freeze in the pay of most federal employees and a 10 percent cut in the federal work force.
--Eliminating all congressional pet projects, known as earmarks.
The plan also calls for a major overhaul of both the individual income tax and the corporate tax systems with the idea of lowering overall tax rates, simplifying the tax code and broadening the taxpayer base.
For individuals and families, the proposal would eliminate a host of popular tax credits and deductions, including the child tax credit and the mortgage interest deduction. However, it would significantly reduce income tax rates. The top rate would drop from 35 percent to 23 percent.
The deduction that companies take for providing health insurance to their employees would be eliminated, but the corporate income tax rate would be reduced from 35 percent to 26 percent, and the government would stop taxing overseas profits of U.S.-based multinational corporations.
Even with the dramatic proposals, the Bowles-Simpson plan would leave deficits of about $380 billion in 2015, the year by which Obama tasked the group with balancing the federal budget, except for interest payments on a national debt that now stands at $13.7 trillion. If the changes to Social Security are dropped, the deficit would be about $400 billion in 2015.
Associated Press writers Martin Crutsinger, Stephen Ohlemacher, Tom Raum and Ricardo Alonso-Zaldivar contributed to this report.
November 11th, 2010
By Sam Stein
WASHINGTON -- President Barack Obama's top adviser suggested to The Huffington Post late Wednesday that the administration is ready to accept an across-the-board, temporary continuation of steep Bush-era tax cuts, including those for the wealthiest taxpayers.
That appears to be the only way, said David Axelrod, that middle-class taxpayers can keep their tax cuts, given the legislative and political realities facing Obama in the aftermath of last week's electoral defeat.
"We have to deal with the world as we find it," Axelrod said during an unusually candid and reflective 90-minute interview in his office, steps away from the Oval Office. "The world of what it takes to get this done."
"There are concerns," he added, that Congress will continue to kick the can down the road in the future by passing temporary extensions for the wealthy time and time again. "But I don't want to trade away security for the middle class in order to make that point."
It has been widely assumed that the president would have to accept an across-the-board deal of some kind, but Axelrod's remarks were the first public confirmation of that fact -- and by a figure regarded as closer to Obama than any other White House staffer.
Also dealing "with the world as we find it," Axelrod declined repeatedly to comment on any of the controversial debt-reduction measures suggested by the chairs of the president's own commission -- even those, such as raising the Social Security retirement age, that go against Obama campaign pledges and strike at the heart of Democratic constituencies.
He said that the White House would wait until the commission made its final recommendations on Dec. 1 before adding, "the president's commitments haven't changed."
By giving ground on taxes and remaining silent on budget suggestions that others, including Speaker Nancy Pelosi (D-Calif.) and AFL-CIO head Richard Trumka, quickly denounced, Axelrod showed the subdued caution of an adviser to a humbled boss.
But the top Obama aide also erected some barriers against newly-emboldened Republicans and their Pentagon allies.
Axelrod said that his boss would veto repeal of his cherished health care law, though he would "work with people" who "have constructive ideas about how to strengthen" it. The veto threat was not unexpected, but it was the first time that a top administration figure had issued such a threat on the record. And in doing so, Axelrod predicted that Republicans would be making a major misstep by challenging the White House's commitment on this front.
"I'm not going to prejudge what they are going to do," Axelrod said of Republican opposition to the legislation. "But I will tell you this -- we are firm in our commitment, we are willing to work with people to improve this plan we are not going to stand for those who want to undermine it and destroy it."
"The notion of spending the next two years fighting over this, I think, is a complete misreading of what the American people want," he added. "They want us to focus on the economy. They don't want us to fight the battles of the last two years. But we are not going to stand by and go back to allowing people with preexisting conditions to be discriminated against, go back to the situation where people can be thrown off their insurance simply because they become seriously ill or you can't get on your parents' insurance after the age of 20. There are so many things that are just central."
Meanwhile, on the war in Afghanistan -- an expensive and increasingly unpopular conflict -- Axelrod pushed back hard against the notion, floated in some recent stories quoting "senior administration sources," that the deadline for beginning troop withdrawals had been pushed back from July 2011 to some time in 2014.
"If it is being sourced to senior administration officials, then someone has bad administration sources," Axelrod said. "There is no change in the president's position. There is no change in that basic commitment."
But there is just such a change on taxes.
Although the president "took the position he felt was the right position" -- favoring a continuation of the cuts only for families earning up to $250,000 -- Axelrod portrayed this "optimal" stance as unrealistic in the lame-duck Congress that begins next week.
For one, time is not on the administration's side. All of the tax cuts, enacted in 2001 and 2003, will expire at the end of this year unless Congress acts. The Republicans in effect "built in tax increases," Axelrod said. And separating out different categories of tax cuts now -- extending some without extending others -- is politically unrealistic and procedurally difficult, he added.
"We don't want that tax increase to go forward for the middle class," he said, which means the administration will have to accept them all for some unspecified period of time. "But plainly, what we can't do is permanently extend these high income taxes."
In other words, the White House won't risk being blamed for raising taxes on the middle class even though, arguably, it is the GOP's refusal to separate the categories that has put Obama in this bind. The only condition, at least initially, seems to be that the tax cuts for the wealthy not be extended "permanently."
A student of history and a onetime political reporter, Axelrod expressed curiosity and even some optimism about the tea party, suggesting that Obama could work with them on matters such as a ban on spending earmarks and on winding down the war in Afghanistan.
If so, Obama would turn the Clinton-era triangulation strategy on its head, reaching out not to the moderates in the other party but to the new breed of conservatives who could bring the ideological arc of Congress full circle.
Can the White House work with them? "It is a fascinating time in our history," he said, "and I don't think anybody really knows. I mean I have watched carefully some of these folks on television. I don't think this is nearly as predictable as people think."
President Obama, in fact, has called every new Republican senator-elect and many of the incoming GOP House members -- "well over 100 calls" in all, said Axelrod.
That's how a shellacked president spends his plane time on a trip to Asia.
November 11th, 2010
"Republicans In Name Only"- A Rino is a hybrid elected political creature which exhibits features often synonymous with both the dreaded Liberal and the neo-Conservative. They can be evidenced, in large part, by an uncanny ability to reach across the isle creating havoc and often ruining a principled stand by their Party's leadership. Rinos, rarely being grounded by any sort of Conservative principles, can easily be blown off of a pending course by the prevailing breeze of the day.
* You Can Help! Send us your Rino articles or a link to each and we will, after due consideration, include your entry.
November 10th, 2010
Bachmann's failed bid pitted her against Texas Republican Jeb Hensarling, and her entry into the race generated a cool reaction from Speaker-in-waiting John Boehner's lieutenants. Bachmann announced her endorsement of Hensarling on Wednesday evening.
"Jeb Hensarling has my enthusiastic support for his candidacy to become Republican House Conference Chair," Bachmann said. "Jeb has demonstrated his commitment to limited government, reduced spending and lower taxes and he will be a strong voice for the Tea Party's call for these values."
"I look forward to continuing my consistent support of the Tea Party," she continued. "I plan to advance the Tea Party ideals through their listening arm, the Tea Party Caucus. It is my wish to bring new faces to the caucus, including freshmen members."
In a statement, Hensarling announced that he is "humbled to earn" Bachmann's support for the GOP Conference Chair post.
One possible reason for Bachmann's failure to win the position, as HuffPost's Ryan Grim wrote last week, is that she was known as stingy with her campaign war chest:
Though the Minnesota firebrand has a phenomenal ability to raise money from the Tea Party base, she has been fairly parsimonious with it. A review of her campaign's giving the past cycle reveals she only donated to 41 Republican House members and challengers, far below what would assist a real bid. The typical contribution was just $1,000, well under the maximum $2,400 she could have given. October 11th is the last date of any contribution, so there may have been a flurry of generosity that hasn't yet been reported, but Bachmann raised more than $11 million and with two weeks left in the campaign still had $2.5 million on hand. Were she making a real bid for leadership, she'd have unloaded that money. Her spokesman has released a statement saying that she has been encouraged to run by colleagues and is weighing doing so, but has yet to make a decision. A GOP aide notes that Hensarling is as conservative as Bachmann but has given much more to and worked harder on the campaign trail for fellow Republicans, an assertion that a review of Hensarling's FEC files confirms, though he raised only $1.6 million.
Hensarling's full statement:
"Michele Bachmann is a committed movement conservative whose effective voice played an important role in America's decision to trust House Republicans once again. She is a dear friend, and I am humbled to earn her support. I look forward to her energetic leadership in a united House Republican Conference during the 112th Congress.Get HuffPost Politics On Twitter, Facebook, and Google Buzz! Subscribe to the new HuffPost Hill newsletter! Know something we don't? E-mail us at email@example.com
"My campaign to serve as Chairman of the House Republican Conference is not complete. I am committed to reaching-out to every Republican Member-elect and current House Republican before Wednesday's vote to seek their counsel and support. If elected, I look forward to working with other Republican leaders to demonstrate that we heard a very clear message on Election Day. Americans want us to focus on principle-based approaches to job creation and cutting the out-of-control spending that is threatening our children's and grandchildren's futures with a tsunami of red ink.
"Our nation is at a tipping point. The days ahead will be full of opportunities and challenges. If House Republicans remain committed to the values of faith, family, free enterprise, and freedom, and if we remain both courageous and smart, together we can preserve the torch of liberty for the next generation."