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From the monthly archives: November 2011

We are pleased to present below all posts archived in 'November 2011'. If you still can't find what you are looking for, try using the search box.


NCPSSM President/CEO, Max Richtman, took calls and questions today on CSpan about the Supercommittee, Social Security, Medicare and Medicaid and ongoing efforts in Congress to cut these programs.         

Let’s Give Thanks for Stopping the Supercommittee

For months, Hands Off-No Cuts activists have taken to the streets, met with their Members of Congress and placed literally thousands of phone calls and emails urging Congress to reject flawed fiscal policies that send the bill for those failures straight to the middle class.  It’s been an incredibly successful campaign and we wanted to highlight just some of your successes in this video.      Economist Dean Baker also provides this wonderful perspective on how we got here and what’s ahead.

Since the supercommittee's real agenda was to bypass Congress and cut social security, let's give thanks for the 99%

Congress gave us a wonderful Thanksgiving present when we got word that the supercommittee "superheroes" were hanging up their capes. While many in the media were pushing the story of a dysfunctional Congress that could not get anything done, the exact opposite was true. The supercommittee was about finding a backdoor way to cut social security and Medicare, and create enough cover that Congress could get away with it. It is important to remember the basic facts about the budget and the economy. Contrary to the conventional wisdom in Washington, it is easy to show (by looking at the website of the Congressional Budget Office) that we do not have a chronic deficit problem. In 2007, prior to the collapse of the housing bubble and the resulting economic downturn, the deficit was just 1.2% of GDP. The deficit was projected to remain near this level for the immediate future, even if the Bush tax cuts did not expire, as originally scheduled in 2011. If the tax cuts were allowed to expire, then the budget was projected to turn to surplus. All this changed when the collapse of the housing bubble wrecked the economy. The story is simple, the housing bubble generated over $1tn in annual demand by stimulating record levels of construction and causing a home equity-driven consumption boom. This demand disappeared when the bubble burst. This is what created the large deficits that we are now seeing. The $1tn-plus deficits are replacing lost private-sector demand. Those who want lower deficits now also want higher unemployment. They may not know this, but that is the reality – since employers are not going to hire people because the government has cut its spending or fired government employees. The world does not work that way. While this is the reality, the supercommittee was about turning reality on its head. Instead of the problem being a Congress that is too corrupt and/or incompetent to rein in the sort of Wall Street excesses that wrecked the economy, we were told that the problem was a Congress that could not deal with the budget deficit. To address this invented problem, the supercommittee created an end-run around the normal congressional process. This was a long-held dream of the people financed by investment banker Peter Peterson. Their strategy was derived from the conclusion that it would not be possible to make major cuts to social security and Medicare through the normal congressional process because these programs are too popular. Both programs enjoy enormous support across the political spectrum. Even large majorities of self-identified conservatives and Republicans are opposed to cuts in social security and Medicare. For this reason, they have wanted to set up a special process that could insulate members of Congress from political pressure. The hope was that both parties would sign on to cuts in these programs, so that voters would have nowhere to go. However, this effort went down in flames this week. Much of the credit goes to the Occupy Wall Street (OWS) movement: OWS and the response it has drawn from around the country has hugely altered the political debate. It has put inequality and the incredible upward redistribution of income over the last three decades at the center of the national debate. In this context, it became impossible for Congress to back a package that had cuts to social security and Medicare at its center, while actually lowering taxes for the richest 1%, as the Republican members of the supercommittee were demanding. Now that the supercommittee is dead, Congress must be forced to address the real crisis facing the country: the 26 million people who are unemployed, underemployed, or out of the labor force altogether. This would not be difficult if we had a functional Congress. The teenage unemployment rate is 25%; the unemployment rate for African American teenagers is 45%. A youth employment program simply putting people to work cleaning up parks and abandoned buildings could put many of these people to work. If we got adequate funding to state and local governments, they would not be paying off 30,000 workers a month. We have a serious need for rebuilding our infrastructure. Major projects take time – but unfortunately, time we have: no projections show the economy recovering until at least 2016 or 2017. In these circumstances, we can promote work-sharing, which would encourage employers to keep workers on the job instead of putting them on the unemployment rolls. These are the sorts of things that Congress should be debating right now. As the financial markets keep telling us, the budget deficit is not a problem – otherwise, the interest rate on 10-year Treasury bonds would not be 2%. There is a long-term issue with the deficit, but as every budget analyst knows, this is a healthcare story. If the United States fixes its healthcare system, then the deficit will not be a major problem. If we don't, then our broken healthcare system will wreck the economy regardless of what we do with Medicare, Medicaid and other public sector healthcare programs. So, everyone should enjoy their Thanksgiving, grateful that the supercommittee turkey is dead. If the 99% can keep up the pressure, Congress will return to reality after the holiday.

Super Committee’s Rejection of Cuts to Social Security, Medicare and Medicaid Is Not a “Failure”

Statement from Co-Chairs of the Joint Select Committee on Deficit Reduction

(Washington D.C.) – Today, the Co-Chairs of the Joint Select Committee on Deficit Reduction, Representative Jeb Hensarling and Senator Patty Murray, released the following statement. "After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline. "Despite our inability to bridge the committee's significant differences, we end this process united in our belief that the nation's fiscal crisis must be addressed and that we cannot leave it for the next generation to solve.  We remain hopeful that Congress can build on this committee’s work and can find a way to tackle this issue in a way that works for the American people and our economy. "We are deeply disappointed that we have been unable to come to a bipartisan deficit reduction agreement, but as we approach the uniquely American holiday of Thanksgiving, we want to express our appreciation to every member of this committee, each of whom came into the process committed to achieving a solution that has eluded many groups before us. Most importantly, we want to thank the American people for sharing thoughts and ideas and for providing support and good will as we worked to accomplish this difficult task. "We would also like to thank our committee staff, in particular Staff Director Mark Prater and Deputy Staff Director Sarah Kuehl, as well as each committee member's staff for the tremendous work they contributed to this effort.  We would also like to express our sincere gratitude to Dr. Douglas Elmendorf and Mr. Thomas Barthold and their teams at the Congressional Budget Office and Joint Committee on Taxation, respectively, for the technical support they provided to the committee and its members."

Reaction from Max Richtman, President/CEO of National Committee to Preserve Social Security & Medicare

“The super committee’s so-called “failure” to sign off on yet another bad deal for average Americans could be the first indication that Washington has begun to listen to the American people who’ve said they don’t want their benefits cut for deficit reduction.  They’ve finally realized that it is wrong to get our budget house in order by targeting the very people hurt most by this difficult economy. The American people do want fiscal sanity returned to Washington but the vast majority of all ages and political persuasions have said Congress should not cut vital programs like Social Security and Medicare in the name of deficit reduction. They know Congress can cut the deficit without further stacking the deck against the poor and the middle class if it focuses on improving the economy and asking those who have done extremely well in the last decade to finally pay their fair share. In the past few months, hundreds of thousands of concerned citizens delivered that message during rallies, protests and marches and in email, phone and petition campaigns to Congress.  Americans were engaged in this deficit debate because they know the value of Social Security, Medicare and Medicaid for American families. This has become painfully evident in an economy where the middle class has already shouldered enough of the financial burden through lower home values, job loss, shrinking savings and stagnant wages. In the case of the supercommittee, failure to support a flawed deficit deal that would target our social insurance safety net while protecting the wealthy isn’t a failure at all—it could be Washington’s first successful step in closing the growing disconnect and  economic gap between America’s haves and have-nots.”  Max Richtman, NCPSSM President/CEO And while the blame game will be in full throttle tonight and tomorrow, here is a good primer laying out the super committee time line showing just how far Democrats were willing to compromise (too far) and how little (none) the GOP was willing to give (not "one red cent" as co-chair Jeb Hensarling famously bragged).

Super Committee Members Say The Only Deficit Deal They’ll Make Is — Benefit Cuts for the Middle Class & Lower Taxes for the Rich

The Republican supercommittee Co-Chair couldn’t be clearer about his party’s priorities for deficit reduction—the GOP will only agree to a deficit plan that includes massive cuts in middle-class benefits combined with even lower taxes for the wealthy.  With just days left before its deadline,  it is obvious that the only deal that will come from this supercommittee is one that slashes benefits to middle class Americans while cutting taxes for the rich.  In other words, a doubling down of the failed fiscal policies which got us here in the first place.   You’ve got to give Rep. Jeb Hensarling credit.  At least, he’s made the GOP’s position crystal clear -- there will be no discussion of shared sacrifice or a balanced approach in this supercommittee.  With just days left before the committee’s deadline Hensarling proudly and defiantly told CNBC the GOP won’t support adding even one penny of new net revenue.  Here’s TPM’s coverage:
 “We have gone as far as we feel we can go,” Hensarling said. “We put $250 billion of what is known as ‘static revenue’ on the table, but only if we can bring down rates [but] any penny of increased static revenue is a step in the wrong direction. We can only balance that with pro-growth reform and frankly the Democrats have never agreed to that…. if we can’t get any type of reforms in health care, which has helped drive the nation towards insolvency, then, no, there’s no reason to frankly put any static revenues on the table.” When Hensarling says “static,” he means revenue that will actually, predictably come into the Treasury. Republicans claim in a Laffer-ite way that their preferred tax policy will create enough economic growth to raise revenues even if the math says it won’t. Democrats reject that kind of analysis. In a moment of candor, Hensarling said Republicans would fight to make sure they never have to harm their own interests. If they refuse to raise taxes and the committee fails then they’ll also focus their efforts on changing the enforcement mechanism — put in place to force both parties to compromise — to make sure that the part they don’t like gets changed before it kicks in in January 2013.
As a reminder, here is what the GOP tax plan offered in the supercommittee actually includes:
…the Republican proposal would significantly shift tax burdens from high-income to lower- and middle-income taxpayers.  High-income taxpayers would benefit enormously from the proposed cut in tax rates, while lower- and middle-income taxpayers would suffer disproportionately from the proposed reductions in tax expenditures, since the plan shields the main tax expenditure for the highest-income Americans — the highly preferential treatment of capital gains and dividend income. Not a First Step Toward Balanced Deficit Reduction- Center for Budget and Policy Priorities
So while some Democrats on the supercommittee have already offered up billions in cuts to benefits for millions of average Americans--even that capitulation isn’t enough.  Republicans want even more benefit cuts for the middle class to pay for even lower taxes for the wealthy.  The only deal that these not-so supercommittee members will sign onto is yet another bad deal for working Americans who’ve already sacrificed in an economy that benefits the wealthiest among us. Permanent tax cuts for millionaires (passed either now or by yet another committee later) and gutting Medicare is the only offer Hensarling says the GOP will accept:
 Rep. Jeb Hensarling said Tuesday Republicans will not alter their supercommittee offer until Democrats put forward a plan to reform entitlements. “What I haven’t seen, again, is a commitment to structural reform of a program that I believe fundamentally is beginning to ration health care for my parents, would not be around for my children and is helping drive our country into insolvency,” Hensarling told reporters.
If this is the best proposal this supercommittee can come up with then members should just WALK AWAY.  Working Americans have made it clear they don’t support cutting vital programs like Social Security and Medicare in the name of deficit reduction. They know these programs didn’t cause this economic mess but they certainly do improve the lives of the very people who’ve suffered most in this economy. In fact, the vast majority of Americans want the wealthy to finally pay their share through higher taxes, not lower.  Unfortunately, it’s clear America’s plan is not  the deal even being discussed by the supercommittee.  Today, Washington’s fiscal hawks even went so far as to promise supercommittee members that, you, the American people will support their efforts targeting the middle-class for benefit cuts:
"This group can do it. And they need to know, if they are bold, if they are brave, if they go big, we will stand with them, and the American people will stand with them," said Senate Budget Committee Chairman Kent Conrad, D-N.D.
We know the average working American won’t stand by this time.  The anger and frustration we hear every day is growing.  But clearly Washington still hasn’t heard it. So, now is the time for you to ensure your voice cuts through Congressional efforts to destroy Social Security and Medicare under the guise of deficit reduction.  Don’t let Washington be deluded into believing that it’s OK…you really won’t mind if Congress destroys America’s safety net.   

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Super Committee Sleight of Hand

The Congressional Super Committee has just over a week to present its deficit reduction plan.  Incredibly, it appears any illusion of finding a proposal with “shared sacrifices” or a “balanced approach is just that…an illusion.  So far, the only agreement that has support from members of both parties is that middle-class Americans will face benefit cuts immediately.  When it comes to tax loopholes for corporations and tax breaks for the wealthy it appears some on the super committee would rather pass that buck on to yet another committee(s) to worry about sometime next year. Simply put…the middle-class sacrifices again.  The wealthy are let off the hook again.
With a little over a week left to reach a deal, members of the Congressional deficit reduction panel are looking for an escape hatch that would let them strike an accord on revenue levels but delay until next year tough decisions about exactly how to raise taxes. “There could be a two-step process that would hopefully give us pro-growth tax reform,” Representative Jeb Hensarling of Texas, the top Republican on the panel, said Sunday on the CNN program “State of the Union.” Deficit Panel Seeks to Defer Details on Raising Taxes- New York Times
What are those “pro-growth” tax reforms Super Committee members want the tax writing committees in Congress to consider, next year? A permanent tax cut for the wealthy, even below the Bush tax cut rate, higher taxes for low- and middle-income taxpayers, and taking revenues off the table for future deficit reduction.
…the Republican proposal would significantly shift tax burdens from high-income to lower- and middle-income taxpayers.  High-income taxpayers would benefit enormously from the proposed cut in tax rates, while lower- and middle-income taxpayers would suffer disproportionately from the proposed reductions in tax expenditures, since the plan shields the main tax expenditure for the highest-income Americans — the highly preferential treatment of capital gains and dividend income. Not a First Step Toward Balanced Deficit Reduction- Center for Budget and Policy Priorities
This Super Committee sleight of hand would guarantee even more sacrifice will made by those who can least afford it yet any possible sacrifice by the nation’s wealthiest is deferred, and in this political climate, likely ignored.  If you have any doubt about the chances that true tax reform would even be considered next year, rest assured, those chances are virtually nil.  You don’t have to believe us.  Even the author of the no tax pledge isn’t worried:
Grover G. Norquist, the president of Americans for Tax Reform, whose antitax pledge has been signed by most Republicans in Congress, said in an interview, “I am not losing any sleep” over the Republicans’ latest proposal. Mr. Norquist said he was confident that, “at the end of the day, the Republican House will not pass a tax increase." “As a face-saving measure,” Mr. Norquist said, the deficit reduction panel “could give lots of instructions to the tax-writing committees.” In complying with those instructions, he said, the House and the Senate could pass very different bills.
National Committee President/CEO, Max Richtman, has urged seniors to get involved nowWrite, call or use Facebook and Twitter to contact their Members of Congress.
“Some members of the Congressional Super Committee apparently believe they’ve found a way to dodge their full responsibilities and continue Washington’s failed fiscal policies by passing more benefit cuts for the middle class this year but delaying tax reform until next year. Super Committee members of both parties appear eager to cut billions from Medicare, and change the COLA formula to cut Social Security benefits for all current and future beneficiaries. Yet, incredibly, some on the Super Committee are still looking for ways to protect the wealthy from paying their fair share toward deficit reduction. If the Super Committee employs this escape hatch political strategy then their mythology of “shared sacrifice” and “balanced approached” will finally be laid bare for all to see.  America’s middle class will be offered up as sacrificial lambs at the altar of deficit reduction. This Super Committee sleight of hand would guarantee that wealth and politics will trump the income and health security of America’s seniors, both now and in the future. Outside of the Beltway, the debate is over. Over 70% of the American people of all ages and political stripes soundly rejected the idea that cuts in Social Security, Medicare and Medicaid should be part of a deficit reduction package and these citizens have said they’ll hold Congress accountable for policies which continue to target the middle-class and poor.” Max Richtman, President/CEO
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