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All Da King's Men

Finally, A Democrat Deficit Reduction Plan

By Da King Published: July 10, 2011

The Democrats in Congress may not be able to do their jobs and produce a budget, but they have finally been embarrassed into producing a plan to address our record deficits. All hail the Democrats ! It's about time, since the Dems control the Executive Branch and the Senate. In other words, the Dems are the majority. The Republicans only control the House.

The first thing I noticed about the Democrat deficit plan doesn't get rid of the deficits. Here's the Washington Post's charitable description of the Democrat effort:

Senate Democrats have drafted a sweeping debt-reduction plan that would slice $4 trillion from projected borrowing over the next decade without touching the expensive health and retirement programs targeted by President Obama.

Sounds great, long as you don't actually think about it. The Democrats "sweeping" plan would cut $4 trillion from President Obama's projected 10-year deficits of $9.5 trillion, leaving us with an accumulation of $5.5 trillion in new deficit spending over the next decade. With interest, that would increase the national debt by another $7.5 trillion or so. That doesn't exactly solve the problem, does it ? Keep in mind that the all-time debt runner-upper champion, prior to Obama, was President Bush II. Bush ran up the debt by around $5 trillion over 8 years. Obama has already run up the debt by $4 trillion in 2 1/2 years, and the Dem "deficit plan" would add another $7.5 trillion to this. Normally, such a plan would be referred to as "going from the frying pan into the fire" rather than being hailed as an achievement, but politics leads people to make silly claims.

Being a Democrat deficit-reduction plan, it's pretty easy to figure out what their major recommendations would be - tax increases and cuts in defense spending.

...Senate Democrats are proposing to stabilize borrowing through sharp cuts at the Pentagon and other government agencies, as well as $2 trillion in new taxes, primarily on families earning more than $1 million year, according to a copy of the plan obtained by The Washington Post.

"stabilize borrowing". LOL. Good one. Do you get the feeling this WaPo article was written by a Democrat ? If not, this next part should convince you:

With debt-reduction talks under way between Obama and congressional leaders, Senate Democrats are unlikely to adopt the blueprint. However, it has gained broad support among those eager to chart a path to solving the nation’s budget problems without making politically painful cuts to Social Security and Medicare.

See, the Democrats aren't going to actually adopt their own deficit reduction plan (because actual leadership by the Dems would create political risk), but the Dem poseurs want to show they can solve our budget problems without dealing with SS or Medicare, according to this WaPo writer. Never mind that the Democrat deficit reduction plan DOESN'T solve the budget problems, and that's precisely BECAUSE it doesn't deal with SS or Medicare, which comprise the majority of the budget.

One Democrat did comment on the plan:

“The very strong feeling was we needed to get this into the conversation, because it provides an alternative view,” said a Senate Democrat familiar with the blueprint, who spoke on condition of anonymity because it has not been publicly released. “What’s striking is how modest the changes need to be to get us back on track.”

Running up $5.5 trillion in new deficits over the next decade will "get us back on track" ? I assume this anonymous Democrat must be a co-sponsor of Barney Frank (D-MA) and Ron Paul's (R-TX) bill to allow states to legalize marijuana. He's definitely smoking something. The only way the Dem plan could be considered "on track" is if you believe returning to Bush-level deficits is on track. I do not. We'll only be on track when our budget is back in the black.

The real reason Senate Democrats produced a deficit plan is a political one. They want to counter the current negotiations between President Obama and House Republicans (legislation must originate in the House):

On Friday, Senate Budget Committee Chairman Kent Conrad (D-N.D.) visited the White House to brief Obama and Vice President Biden on the blueprint, which differs significantly from the framework under discussion with House Speaker John A. Boehner (R-Ohio) and other leaders.

“I explained to the President and Vice President how the Senate Budget Committee Democrats developed a plan that achieves $4 trillion in deficit reduction in a balanced and fair way,” Conrad said in a statement. “It is my hope the plan will help influence the bipartisan negotiations and help them reach a comprehensive and balanced deficit reduction agreement.”

By "balanced deficit reduction", the Democrats mean, 'let's raise taxes". By "fair", they mean raise taxes on the wealthy. They know the Republicans will not agree to raising taxes in such a weak economy, with unemployment at 9.2%. Speaker Of the House John Boehner (R-OH) just said he would accept a smaller debt ceiling deal of $2 trillion in spending cuts rather than raise taxes.

I suppose I shouldn't be too critical of what's going on. At least both the Democrats and Republicans are now proposing ways to reduce deficits and debt, rather than increasing them radically, as both Bush and Obama have done. That is a step in the right direction.

Here are some details of the Democrat plan:

Under the blueprint, the top income tax rate would rise to 39.6 percent for individuals earning more than $500,000 a year and families earning more than $1 million. That group, which constitutes the nation’s richest 1 percent of households, would also pay a 20 percent rate on capital gains and dividends, rather than the 15 percent rate now in effect.

In addition to raising rates for the very wealthiest families, the blueprint proposes to obtain fresh revenue by targeting offshore tax havens and corporate shelters. It would also scale back the array of tax breaks and deductions known as tax expenditures, perhaps by focusing on the wealthiest households, which claim an average of $205,000 in tax breaks each year on average income of $1.1 million.

The blueprint would take nearly $900 billion from the Pentagon over the next decade — the same amount recommended by Obama’s fiscal commission. It would slice more than $350 billion from domestic programs. And it would produce interest savings of nearly $600 billion attributable to reduced borrowing.

Only about $80 billion would be cut from Medicare, Medicaid and other federal health programs, and nothing from Social Security

As usual, the Democrats want to go after corporations and investment capital, but that also goes after job creators and wealth producers, not a great idea right now (when are liberals ever going to learn that you can't be pro-job and anti-business at the same time ?). No wonder White House spokesmen have been saying people don't care about the unemployment rate or GDP growth. They must think we're pretty dumb. I think those White House spokesmen are pretty dumb, because we do care, at least those of us who haven't been brainwashed into believing corporations and investment capital are evil.



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