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I warned in August that Obama's deficit commission would come back with a proposal to raise the retirement age for Social Security.
What's coming after the midterms is a proposal from the packed-with-deficit-hawks Commission which will recommend a reduction in SS benefits, most likely with some consumer price indexing smoke and mirrors, and, my favorite, a raising of the full-SS retirement age to 70.
I also pointed out at the time that Social Security does not contribute to the deficit.....the deficit which Obama's commission was..umm...commissioned to study and then report back with recommendations.....
Social Security is running a big surplus and does not add to projected deficits until at least 2037…..and that's if NOTHING is tweaked (rasing the cap on SS income) for the next 20 years.
Yesterday, all media were abuzz with the early release of the deficit commission's co-chair report. Here's some of what would happen to Social Security, which, don't forget, doesn't contribute to the deficit for at least 20 years....
•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 a lower inflation rate, which will generally mean lower cost of living increases and less money per average recipient.
•"Increase progressivity of benefit formula" -- i.e., reduce benefits by 2050 for middle, and, especially, higher earners, relative to current benefits.
•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.
Take a look at this chart....
It isn't Social Security or even discretionary spending which is projected to balloon the national deficit. Clearly, our national deficit threat going forward derives itself from Medicare and Medicaid.....health care costs. Obama's health care legislation was designed specifically to start addressing this reality-based threat to our projected deficits. The health care legislation GOP'ers plan on repealing.
At the same time that Erskine Bowles and Alan Simpson tell Americans that non-deficit threatening Social Security must be cut....unbelievably, or perhaps not, these deficit hawks also suggest this....
.....reducing the tax brackets to three personal brackets and one corporate rate while eliminated all credits and deductions. Without any credits or deductions (including the EITC and mortgage interest deductions), the 3 tax rates would be 8, 14 and 23 percent.
The suggested corporate tax rate would be reduced from 35% to 26% under this oh-so-very-serious deficit commission report.
In those two recommendations alone.....increasing the SS age while reducing the benefits, while simultaneously lowering income and corporate tax rates....Obama's Commission demonstrates that they are not really a deficit commission at all, but simply another tool in today's conservative movement toolbox to be used to redistribute even more government revenue to help America's wealthiest.
This is all no surprise whatsoever,....after all.....the billionaire, Pete Peterson, a very visible and vocal player in the Deficit Commission's proceedings, has made it his life's goal to slash entitlements for the people....so that taxes on our nation's richest don't increase....ever.
Now...here's how I think this "rape-regular-Americans-while-making-tender-love-to-the-rich" plan is going to work out.....
The debt-ceiling problem is coming up next year. Republicans already have said that they plan to hold the nation hostage over raising that credit limit. Meanwhile, Republicans have already begun to write the ransom note. Mitch McConnell refers to the ransom note as "some strings attached." Jim DeMint said that the debt ceiling won't be raised unless it is "combined with some path to balancing our budget."
My guess is that the faith-based-for-the-sake-of-the-wealthy bunch will insist on coupling some of the nastier-for-regular-Americans suggestions from the Commission with a vote to lift the debt ceiling. The tax cutting for the group which has accumulated more of America's wealth in the last 20 years than at any other time in American history.....will be the most important component of the GOP ransom note. A reduction from 35% to 23% in the income tax rate alone is a whole big bunch of money to the top 1%.
I'm afraid that all or nothing...it will be. Either the filthiest of the rich get even more filthy rich on the backs of tens of millions of regular workers in America....or the whole world gets it.
I agree with Kevin Drum......this isn't about cutting the federal deficit....this preliminary report from the co-chairs of Obama's Cat Food Commission is about cutting the federal government, and specifically, the part of the federal government which benefits the most Americans.
In other words, it's a faith-based, Tea Bagger bong-hit, report meant to set the parameters for John Boehner and Mitch McConnell's ransom note writing early next year.