Specifically, the commission calls for a short-term goal of stabilizing the portion of the national debt held by private investors at 60 percent of the nation's gross domestic product by 2018. Debt held by private investors currently stands at about 63 percent of GDP.
To get there, the commission recommends a new law called the "Sustainable Debt Act" that would establish that borrowing goal and set annual targets for spending and revenues. In a major change, the tax-writing committees would be held to tight limits, as the spending committees are now, in an effort to rein in the explosive growth of tax breaks for various businesses and groups of individuals known as tax expenditures.
If Congress failed to meet those targets, the commission recommends a tough new enforcement regime that would cut all spending - including entitlements such as Social Security and Medicare - across the board and add a broad-based surtax to all forms of federal taxation.
The commission also recommends beefing up the congressional budget committees by adding House and Senate leaders, as well as the chairs of the appropriations and tax-writing committees, to their ranks. It urges Congress to adopt multi-year budget plans - rather than the current single-year proposals - to help keep them on track.
And it suggests creating long-term goals to restrain the growth of the major drivers of the nation's budget problems: Social Security, tax expenditures and the soaring health-care prices that are pushing up the cost of Medicare and Medicaid. Triggers would make automatic adjustments to those programs if the goals were not met.
Oh, this ought to be good. Across the board entitlement cuts and a national surtax? Wow. Hey wait a minute, did you say Peterson Foundation? As in billionaire Pete Peterson?
Wall Street billionaire Pete Peterson is making his move. Today in front of a Washington-centric audience at the Newseum, and flanked by deficit peacocks Kent Conrad and Evan Bayh, he launched OweNo (my sentiments exactly), a $20 million dollar ad campaign designed to “start a discussion” about deficit reduction, and by “start a discussion” I mean “cut your retirement savings and your health care.” Sam Stein reports:
Titled “OweNo”, the campaign, which promotes a mock presidential candidate irreverently named Hugh Jidette (get it? Huge debt), doesn’t take on Social Security reform directly. But the connections are fairly obvious and it has the program’s defenders deeply wary about being outgunned. The Peterson Foundation, for one, has never shied away from its push to reform the entitlement program. And in introducing the $20 million effort, the organization’s founder, former Nixon commerce secretary and fiscal conservative Pete Peterson made it abundantly clear that Social Security is in his sights.This begins a Sherman’s march for the deficit hysterics, a series of reports and fearmongering culminating in the release of the cat food commission report on December 1. Before that time, several reports calling for austerity will land, including the Pew-Peterson Commission report (funded by Pete Peterson), a report from Robert Greenstein and Charles Blahous saying that Congress should address Social Security changes “sooner rather than later” (The report is funded by Pew and Peterson), and the Bipartisan Policy Center Debt Reduction Task Force report from Alice Rivlin and Pete Domenici (Rivlin sits on the Pew-Peterson Commission and is therefore funded by Peterson as well).“Solving our fiscal issues without fundamental entitlement reform is a statistical impossibility,” he said. “Entitlement reform must provide benefits for the most vulnerable. But if we wait too long to reform and we confront a crisis, the politics may become brutal and even violent and in such a situation there would be no assurance that the safety net, even for the most vulnerable, might not be seriously frayed.”
Oh hey, so it's like a major Wall Street titan is trying to stack the deck to suggest the only way out for America is more tax cuts for the wealthy and to decimate Social Security and Medicare to pay for them.
Nobody could have predicted, etc. You know, except for DDay and Digby, who have been warning America about the drastic cut recommendations that would of course be coming down the pike just after the midterms. no matter who won. They've had these Peterson guys cold for over a year now. And now, everything in Washington will be framed in the need for austerity.
I called this Catfood Commission/Alan Simpson crap back before the midterms too. With this first report dropping, now we see what the real plan has been all along.
Oh, but it gets worse. Also dropping today are the draft recommndations from the President's Bipartisan Fiscal Commission itself. Its main recommendation?
Massive government spending cuts across the board.
- Index the retirement age to longevity -- i.e., increase the retirement age to qualify for Social Security -- to age 69 by 2075.
- Index Social Security yearly increases to inflation rather than wages, which will generally mean lower cost of living increases and less money per average recipient.
- "Increase progressivity of benefit formula" -- i.e., means test part of Social Security benefits by 2050.
- Increase the Social Security contribution ceiling: while people only pay Social Security taxes on the first $106,800 of their wages today, that's only about 86% of the total potentially taxable wages. The co-chairs suggest raising the ceiling to capture 90% of wages.
- The co-chairs suggest capping both government expenditures and revenue at 21% of GDP eventually.
- Freeze federal worker wage increases through 2014; eliminate 200,000 federal jobs by 2020; and eliminate 250,000 federal non-defense contractor jobs by 2015.
- Establish co-pays in the VA medical system and change the co-pays and deductibles for military retirees that remain in that system.
- Eliminate NASA funding for commercial space flight.
- Require the Smithsonian museums to start charging entrance fees and raise fees at the national parks.
- Eliminate funding to the Corporation for Public Broadcasting -- which many conservatives suggested in the wake of the firing of former NPR contributor Juan Williams.
- Reduce farm subsidies by $3 billion per year.
Oh, did I mention that all these government spending cuts are needed because the top tax rate would be cut from 39.6% to 23%? Never mind that this is exactly the opposite of what voters actually want.
This is a complete disaster. I can't think of a single politician that would support this. Of course, as Digby reminds us, that's the point.
Now, in reality, keep in mind that all this is just to form the basis for "bipartisan cooperation." So, I wouldn't expect that in the end we'll see any cuts to the VA or farm subsidies. I think we know very well that there will be no tax hikes of any kind. And as I mentioned defense and Homeland security aren't on the menu. This is just an exercise designed to create a new "bipartisan"starting point for the destruction of social security.
But here's the absolute best part: Obama will get 100% of the blame for this, even if 0% of the proposals are adopted before the 2012 elections. And he did this to himself. You thought the Tea Party hated him before? Obama just became Public Enemy #1 to anyone over 60. Republicans will print these recommendations as gospel truth in every attack ad, flyer, and circular over the next two years. The Kenyan Usurper is gonna take your Medicare!
And he did it to himself. If I'm a GOP strategist, I'm already designing the ads.
Catfood, catfood uber alles...
New tag: Catfood Commission...because that's all you're going to be able to afford to eat in your retirement.