WELCOME TO OPINIONS BASED ON FACTS (OBOF)
Name | Published |
OVERVIEW | Dec. 28, 2010 |
SOCIAL SECURITY PART 1 | Dec. 30, 2010 |
SOCIAL SECURITY PART 2 | Jan. 10, 2011 |
SOCIAL SECURITY PART 3 | Jan. 17, 2011 |
SOCIAL SECURITY PART 4 | Jan. 24, 2011 |
SOCIAL SECURITY PART 5 | Jan. 31, 2011 |
SOCIAL SECURITY PART 6 | Feb. 07, 2011 |
SOCIAL SECURITY PART 7 | Feb. 14, 2011 |
SPECIAL ISSUE | Feb. 18, 2011 |
SOCIAL SECURITY PART 8 | Feb. 21, 2011 |
SOCIAL SECURITY PART 9 | Mar. 01, 2011 |
SOCIAL SECURITY PART 10 | Mar. 07, 2011 |
SS & MORE PART 1 | Mar. 14, 2011 |
SS & MORE PART 1A | Mar. 21, 2011 |
SS & MORE PART 2 | Mar. 25, 2011 |
SS & MORE PART 3 | Mar. 29, 2011 |
SS & MORE PART 4 | Apr. 04, 2011 |
SS & MORE PART 5 | Apr. 11, 2011 |
SS & MORE PART 6 | Apr. 18, 2011 |
SS & MORE PART 7 | Apr. 25, 2011 |
SS & MORE PART 7A | Apr. 29, 2011 |
SS & MORE PART 8 | May 02, 2011 |
SS & MORE PART 9 | May 09, 2011 |
SS & MORE PART 10 | May 16, 2011 |
SS & MORE PART 11 | May 24, 2011 |
SOCIAL SECURITY & MORE PART 11
IN THIS ISSUE
1. Opening thoughts.
2. Developments regarding the "Gang of Six."
3. Statement by Senator Tom Coburn (D. OK.)
4. The problems with Gangs.
5. Political mis-statements.
6. The risk today is greater than in 1995.
7. Ronald Reagan - National Debt.
8. Social Security.
9. Faithful reader comments.
O P E N I N G T H O U G H T S
If you want to get your mind in a tornado whirl, just spend a few hours checking out, even a small part, of what is available on the resources I use, that I listed two weeks ago. That is where I am now. Everything that I put in these messages is available to all of you on the internet. All that I do is try to review as much of the material as I can and edit a little along with it. Believe me, you could work at this 24/7 and still not get all of it that will affect our lives.
I have to make an announcement. Due to health reasons I am going to have to post new messages every two weeks instead of every week, until further notice. I am not sure how many of you are reading this anyway, so it probably won't make a lot of difference to most of you. For those of you who do read my blog, I thank you. I'll be talking with you again on June 6, 2011.
As I have said a number of times, while I am a Progressive Democrat, I try to be fair in looking at both Parties. At the same time, I have not been backward about how I feel regarding the Republican Party, as a whole. I think they are irresponsible, radical and unreasonable. They have proven that they are not willing to negotiate in good faith and there is only one way - their way.
As I said in the Part 11 Preview, I believe we have to know the position of both Republicans and Democrats. Also, we have to recognize that as individuals, there are some serious thinkers in the Republican Party and their points of view must be listened to and seriously considered. In this regard, I first want to include, in this posting, a paper released by Senator Tom Coburn.
But first, I want to refer back to Posting Part 8 on May 2, 2011.
Some time ago, sorry I don't know when, a group of three Republicans and three Democrats from the Senate got together and have spent hundreds of hours trying to come up with a solution to the deficit problem. Senator Kent Conrad, (D-N.D.) is Chairmen of the group known as the "Gang of Six." In an interview with ABC News' Jon Karl, Senator Conrad said, when asked about deficit reduction, "If it doesn't happen this year, it's certainly not going to happen next year, so it's really got to happen now."
In a conversation with radio host Laura Ingraham, Senator Tom Coburn (R-OK.) said "There's no plan to have a significant tax hike on anyone." He further said "Will some people pay increased taxes? I'm sure they will."
Developments regarding the "Gang of Six"
As of two weeks ago, a disagreement between Senator Coburn and some other member or members of the group, occurred. There were a lot of rumors about what took place, but I don't deal in rumors. The resulting fact is that Senator Coburn withdrew from the Gang of Six. From a factual standpoint, that is all I know. Since his departure, Senator Coburn has released a statement that I think needs to be included in this posting. Note particularly, his statement that he will be releasing his own version of deficit reduction in the near future.
Why is the Senate stalling on the debt debate?
By Tom Coburn,
Where is the Senate?
Our country is facing the greatest threat to our freedom and future since 1941. Any honest view of our debt, deficits, size of government and demographic challenges shows we must make major changes if we are going to pass on the American way of life to our children. Each week seems to bring new warning signs: slower-than-expected growth (already as much as 25 to 33 percent every year, some estimate), higher-than-expected unemployment numbers, admonitions to get our act together from the international financial community.
If these facts are true — and very few policymakers deny them — why has the U.S.
The lack of leadership and initiative in the Senate is appalling. As of this week, the Senate has held just 72 roll call votes this year, about one per legislative day on mostly noncontroversial and inconsequential matters. By this time last year, we had taken more than twice that number of votes (152). By this time in 2009, we had taken 192 votes. If we continue to avoid tough choices, we will lose control of our economic destiny and go down in history as the Senate that lost America
For the past several months I have been meeting with a small group of senators from both parties, informally known as the Gang of Six, that was designed to force the idle — not gridlocked — Senate, and then the House and the president, to enact a long-term deficit-reduction package. Our talks reached an impasse this week when, in my view, it became clear we would not be able to produce a balanced, specific and comprehensive deal that would improve on, and in some ways meet, the standard set by the Bowles-Simpson plan.
I understand the disappointment, and real danger, associated with our impasse. The question, though, is not how we tried and failed but why the Senate has not even tried. Commissions and “gangs” form when members lose confidence in the institutions in which they serve. Working groups have their place — but they should support, not replace, the open work of the full Senate. The truth is that we already have a permanent standing debt commission. It’s called Congress.
We are facing what Democrat Erskine Bowles calls the most predictable economic crisis in history. There is no excuse for not having bills on the Senate floor with an open amendment process that allows the American people to fully comprehend not only the magnitude of our problems but the possible solutions. The people need to hear the Senate debate the central issues of our time. The limited progress that has been made to bring sobriety to Congress, such as the end of the earmark orgy, was made possible through a relentless floor campaign publicizing amendment after amendment and cut after cut. Change happens when the American people see real debate, not partisan political theater.
As the Senate majority leader, Harry Reid bears special responsibility for failing to direct attention to the central challenges of our time. His floor strategy seems to be focused on saving Democrats more than democracy. I would relish a debate on tax earmarks, spending cuts and competing budgets (if there were competing budgets), yet the votes he seems most interested in scheduling — such as tax breaks for big oil companies — are designed for short-term political gain rather than long-term deficit reduction.
It is not realistic to expect six members to pull the Senate out of its dysfunction and lethargy. Some will ask why we should have more hope in an open, deliberative process, in which all senators are engaged, when a dedicated few did not succeed. The America
Getting there, however, will require the Senate to put forward specific solutions and win public support for serious entitlement reform and tax reform. In the coming weeks I’ll be putting forward my own proposal that puts everything on the table and cuts $9 trillion in spending over the next decade. I hope my colleagues present their ideas as well. I’m confident that in a free and open debate, the best solutions for America
History has not been kind to republics that pretend they can borrow and spend beyond their means indefinitely. We can cheat history, but only if we act quickly. If senators put our national security ahead of our political security, the American people will see there is no problem we cannot solve. Let the debate begin.
Senator Coburn is known as the most conservative Senator in the Senate, BUT, recently he has made statements that are more responsible and reasonable with regard to our deficit, revenues, and Social Security than any Republican I have heard about, either in the Senate or the House. For example: "The public rightly prefers spending cuts over revenue increases, but numerous polls indicate the vast majority of Americans would support the only type of plan that would ever make it out of Congress and be signed into law: one that favors spending cuts over revenue increases but includes both." I put in the last underline.
I, for one, am looking forward to seeing his upcoming reduction package that he reports will save $9 trillion in the next decade.
In all fairness, I must point out that, at this time, I have not found anything that would be a rebuttal from Senator Reid, regarding the statements Senator Coburn has made about the operation of the Senate.
THE PROBLEM WITH GANGS
By Ezra Klein Washington
Tom Coburn's "break" is bad news for the “Gang of Six.” Mike Crapo and Saxby Chambliss are both conservatives in good standing, but it was Coburn who really had the credibility to make something like this work, Coburn who felt secure enough to go toe-to-toe with Grover Norquist over taxes, Coburn who persuaded the press there was something worth covering here.
But perhaps we shouldn't be surprised. Gangs, groups and gaggles haven't had much success at bridging broad partisan gaps in recent years. The original Gang of Six, the one that Max Baucus and Chuck Grassley led in search of a health-care reform law acceptable to both sides, went down in flames. The Wyden-Bennett process, which had many more than six senators signed onto a bipartisan health-care reform law, dissolved without so much as a floor vote. The Lieberman-Graham-Kerry talks did not result in a cap-and-trade law. Success, rather, has run through more customary channels: the leadership of both parties gathering to hash out the December tax deal, or the relevant committee chairman writing the health-care law and passing it in a party-line vote.
Gangs of well-meaning, bipartisan-leaning leaders embody how we want Washington Washington
The proliferation of gangs and groups suggests that the normal order is so dispiriting and unpleasant that even those who're most intimately involved are searching for another way. But the fact that none of them have succeeded suggests they haven't found it yet. The Gang of Five is meeting today, and who knows, they might emerge with legislation yet. But it's often worth listening to Mitch McConnell, whose peculiar honesty and tight control over his members has made him one of Washington
1) The Gang of Six is now the Gang of Five, report Philip Rucker and Lori Montgomery: "Since January, six senators have engaged in difficult negotiations and made painful concessions in a politically dangerous quest for something that has long eluded Washington: a bipartisan compromise to control the nation’s mounting debt. By Tuesday evening, however, the 'Gang of Six' was on the verge of collapse. Sen. Tom Coburn (R-Okla.) withdrew from the bipartisan working group, saying the senators simply could not overcome the polarizing political pressure that each faces. The group’s two other Republicans said it would be hard to continue without Coburn. 'The debt is still $14 trillion. It’s got to be solved in a bipartisan way'” Sen. Saxby Chambliss (R-Ga.) told reporters Tuesday night."
1) The Gang of Six is now the Gang of Five, report Philip Rucker and Lori Montgomery: "Since January, six senators have engaged in difficult negotiations and made painful concessions in a politically dangerous quest for something that has long eluded Washington: a bipartisan compromise to control the nation’s mounting debt. By Tuesday evening, however, the 'Gang of Six' was on the verge of collapse. Sen. Tom Coburn (R-Okla.) withdrew from the bipartisan working group, saying the senators simply could not overcome the polarizing political pressure that each faces. The group’s two other Republicans said it would be hard to continue without Coburn. 'The debt is still $14 trillion. It’s got to be solved in a bipartisan way'” Sen. Saxby Chambliss (R-Ga.) told reporters Tuesday night."
2) Coburn quit over Medicare, reports Brian Beutler: "A source with knowledge of the negotiations says Coburn ultimately broke ranks after members of the group rejected his proposal to introduce a global cap on Medicare spending that would have cut $150 billion from current beneficiaries. 'The issue we have now is, over the last couple weeks Coburn has been slow walking this and it's become clear that he's not been negotiating in good faith,' the source said. 'He came yesterday with demands that we make immediate and deep cuts to current Medicare beneficiaries.' Coburn did not attend the group's Tuesday afternoon meeting, and [spokesman John] Hart's statement suggests he won't make an appearance Wednesday either. Hart did not immediately respond to a request for comment on Coburn's Medicare proposal."
POLITICAL MIS - STATEMENTS
Both a Republican Presidential candidate and a member of the Senate have been getting their tongue wrapped around their eye tooth and can't see what they're saying. Senator Harry Reid (D) Nevada, Majority Leader in the Senate, recently, called them out about their recent contradictory statements relating to Medicare and the Ryan Budget, which is to be voted on in the Senate Thursday.
Without using names, but no mistake as to who Sen. Reid was talking about, Newt Gingrich (Ga.) former House Speaker and present Presidential candidate and Senator Scott Brown (Mass.). Reid said "We all saw how quickly one prominent Republican presidential candidate spun himself into circles last week," referring, of course, to Gingrich. He further said "First he, Gingrich, called the plan for what it is: "radical." He said it was "right-wing social engineering." Hours later, after Republicans had gotten all over him about his statement, he reversed himself and said "I support the plan to kill Medicare.
Also, the Medicare issue has been a problem for Senator Brown (R. Mass.). He told a Massachusetts
The Republicans are walking a tight rope and lose their balance every now and then, so much so that you don't know where they will lose their balance tomorrow.
Robert Rubin: The risk is greater today than it was in 1995
By Ezra Klein Posted 5/17/2011 Washington
The last time Congress allowed the debt ceiling to elapse was November of 1995, when the Gingrich-led House attached cuts and conditions to a debt-ceiling increase that were unacceptable to the Clinton-led White House, The standoff continued for four months, requiring the Treasury secretary, Robert Rubin, to do some extraordinarily fancy fiscal footwork to keep the government from defaulting altogether. Last night, I spoke with Rubin, now co-chairman of the Council on Foreign Relations, about why 2011 is a more dangerous moment for a debt-ceiling showdown than 1995, whether we can pay back the market but default on other commitments, and whether we need a debt ceiling at all. An edited transcript of our conversation follows.
Ezra Klein: The
Robert Rubin: Your job as secretary of the Treasury is to do exactly what Tim Geithner has been doing, which is carefully and candidly explaining to the American public and to policymakers the severe consequences of failing to raise the debt ceiling and failing to meet our commitments. Meanwhile, you need to identify with legal counsel all of your options if the debt ceiling isn’t raised so you can continue to meet the commitments of the federal government for as long as those options allow. He has done that and has calculated we can meet our commitments without another increase in the debt limit until about August 2nd.
EK: There seem to be a couple of different camps in the debt-ceiling negotiations. One camp wants to quickly pass a clean bill raising the debt ceiling and taking default off the table. Another argues that the debt ceiling is a useful forcing mechanism for a broader fiscal deal that brings down the deficit and changes various features of the state. Where do you fall?
RR: Defaulting on our commitments is unthinkable and dangerous, and the debt ceiling should be raised now without conditions. But as a separate matter, our fiscal outlook is unsustainable and deeply threatening and must be effectively addressed through our political processes on both the revenue and the spending sides.
EK: Some Republicans have advanced the argument that these are all scare tactics, that so long as we clearly state our intention to pay back our bondholders, refusing to raise the debt ceiling wouldn’t have major consequences in the market. In fact, it could be a good thing, as it’ll force us to live within our means. Do you think that’s a plausible view?
RR: No. I don’t think it’s even remotely plausible. That would be viewed by markets as a failure of the U.S. United States
EK: When you sat down with your lawyers in 1995, what stalling mechanisms did you come up with?
RR: I wouldn’t call it “stalling.” What we did was borrow from the public-service pension funds. When you borrow from these funds, that isn’t considered debt. So as long as those resources lasted, we could meet the federal government’s commitments. And we were forced to do that from roughly November 13th of 1995 to March of 1996 to avoid default.
EK: Did that have adverse consequences for those funds?
RR: No. The pension funds get paid back and there were no adverse consequences. There is the adverse consequence for confidence in theU.S.
EK: I’ve gone back and looked at the market’s reaction to the debt-ceiling fight in 1995, and it’s very hard to detect much concern. The market seems pretty calm all the way through. And yet people who know the market seem very worried that it could flip unpredictably, and in particular, that the market might give us less time to pass the debt ceiling than we think we have. How concerned are you about a timing problem like that?
RR: I think the risk of having some serious reaction is much greater today than back then; and back then, I thought it was unacceptable. When the debt-limit fight occurred in 1995, we had already put in place a powerful deficit-reduction program in 1993 and our fiscal position was repairing. Today, you have an unsustainable fiscal outlook. The longer the debt-ceiling debate goes on, the greater the risk is that markets will look at our political system and decide they don’t like what they see, and that the market’s confidence in our political system’s ability to address our fiscal situation will be negatively affected. And once you’ve catalyzed that change in the market’s psychology, it’s not at all clear that raising the debt ceiling would change the course of that psychology. None of this is a risk worth taking.
EK: Do you think we should have a debt ceiling at all?
RR: No, it’s an anachronism.
EK: When you sat down with your lawyers in 1995, what stalling mechanisms did you come up with?
RR: I wouldn’t call it “stalling.” What we did was borrow from the public-service pension funds. When you borrow from these funds, that isn’t considered debt. So as long as those resources lasted, we could meet the federal government’s commitments. And we were forced to do that from roughly November 13th of 1995 to March of 1996 to avoid default.
EK: Did that have adverse consequences for those funds?
RR: No. The pension funds get paid back and there were no adverse consequences. There is the adverse consequence for confidence in the
EK: I’ve gone back and looked at the market’s reaction to the debt-ceiling fight in 1995, and it’s very hard to detect much concern. The market seems pretty calm all the way through. And yet people who know the market seem very worried that it could flip unpredictably, and in particular, that the market might give us less time to pass the debt ceiling than we think we have. How concerned are you about a timing problem like that?
RR: I think the risk of having some serious reaction is much greater today than back then; and back then, I thought it was unacceptable. When the debt-limit fight occurred in 1995, we had already put in place a powerful deficit-reduction program in 1993 and our fiscal position was repairing. Today, you have an unsustainable fiscal outlook. The longer the debt-ceiling debate goes on, the greater the risk is that markets will look at our political system and decide they don’t like what they see, and that the market’s confidence in our political system’s ability to address our fiscal situation will be negatively affected. And once you’ve catalyzed that change in the market’s psychology, it’s not at all clear that raising the debt ceiling would change the course of that psychology. None of this is a risk worth taking.
EK: Do you think we should have a debt ceiling at all?
RR: No, it’s an anachronism.
Ronald Reagan: Defaulting on the debt ‘would be unthinkable’
By Ezra Klein - Washington
In 1987, Ronald Reagan’s secretary of the Treasury, James Baker, warned of “unprecedented and catastrophic repercussions” if Congress failed to lift the debt ceiling. His boss agreed. “This country cannot be allowed to default on its financial obligations for the first time in history,” Reagan warned. “This would be unthinkable.”
And it wasn’t just Reagan. Robert Rubin, Treasury secretary under Bill Clinton, said default “is not something we should ever contemplate.” John Snow, who served as Treasury Secretary under George W. Bush, cautioned that failure to raise the debt ceiling could “seriously undermine the full faith and credit of the United States
But what Reagan called unthinkable is being thought. “By defaulting on the debt, in the short and long term, it could benefit us to go through a period of crisis that forces politicians to make decisions,” said Rep. Devin Nunes. Paul Ryan assured CNBC that the market would accept a default “for a day or two or three or four.” Republicans have glommed onto comments from hedge-fund manager Stanley Druckenmiller, who said that “technical default would be horrible, but I don't think it's going to be the end of the world,” though as Business Insider notes, Druckenmiller is “standing apart from basically everyone else” on this one.
In other words, Republicans are trying to convince themselves and their base out of fearing the consequences of a default. And that is very, very scary.
This country has a proud and bipartisan tradition of risk aversion when it comes to the country’s credit rating. Democratic administrations don’t default on our debt. Republican administrations don’t default on our debt. We don’t default on our debt. We don’t default strategically, as a way of detonating a fiscal bomb in the hope that the ensuing chaos will create an opening for policy measures that wouldn’t pass in normal times, and we don’t default temporarily, for a day or two or three or four. We simply don’t default. That was Reagan’s position and Clinton
And that’s what will scare the markets. The real danger of the debt ceiling is not that a temporary default will make our bondholders poor. It’s that by doing something that the American political system has previously regarded as unthinkable, the market will cease to believe the stories it tells itself about the safety, security and predictability of the American political system. And we won't get a mulligan on that if Paul Ryan and Devin Nunes and Stanley
In 2006, the market thought it knew that housing prices never go down all at once and that bonds that Moody’s rated AAA were safe and that Lehman Brothers would be around forever. In 2007 and 2008, it found out that it was wrong. We’re still recovering. Defaulting on the debt will be like that, but much, much worse, because the market is much more invested in the belief that the American political system works than it was in the belief that the housing market in Fresno would never dip at the same time as the housing market in Reno. Reagan called the consequences of this "unthinkable." Republicans should listen to him.
By 02:30 pm ET 05/19/2011
SOCIAL SECURITY
SOCIAL SECURITY
This paints a very clear picture relating to revenue and Social Security expenses and what the extension of the Bush tax cuts would mean.
Posted at 02:31 PM ET, 05/24/2011
Social Security has a taxing problem, not a spending problem
By Ezra Klein
There was a real good chart with this posting, but it will not transfer to the blog. I blieve that I can explain what it showed and it will make sense with the following print.
The chart showed a share of GDP over 75 years.
It showed that the total of the Bush tax cuts represented 1.8% of GDP over 75 years. It also showed that the Bush tax cuts for just those making over $250,000 represented 0.7% of GDP over 75 years and finally it showed that the Social Security shortfall for the same period was 0.8% of GDP“
The revenue loss over the next 75 years from making all of those tax cuts permanent would be two and one-half times the entire Social Security shortfall over that period. Indeed, the revenue loss just from extending the tax cuts for people making over $250,000 — the top 2 percent of Americans — would itself be almost as large as the Social Security shortfall over the 75-year period. Members of Congress cannot simultaneously claim that the tax cuts are affordable while the Social Security shortfall constitutes a dire fiscal threat.”
A REAL FRIEND
One of my faithful readers has again posted a comment on last week's posting, for which I am very appreciative. He is very frustrated, as many of us are, and he finished by asking "What can we do to get this thing turned around?" He, of course, is referring to the mess we have in Washington Washington
Talk with you in two weeks, June 6.
Floyd
