SMOKINCHOICES (and other musings)

October 2, 2012

Fiscal Cliff averted hopefully


Group says cuts avert ‘fiscal cliff’

By Richard Cowan REUTERS

WASHINGTON — The independent watchdog group Taxpayers for Common Sense will unveil a $2 trillion deficit-reduction proposal today in hopes of averting an economic debacle at year’s end known as the “fiscal cliff.”

The group plans to detail about 130 specific deficit-reduction steps Congress could take to replace across-the-board spending cuts of $1.2 trillion that are scheduled to take effect on Jan. 2. These would occur just as tax increases for all income groups are due to kick in.

The combination of looming spending cuts and tax increases is commonly referred to in Washington as a fiscal cliff because economists say it would knock the struggling U.S. economy back into recession early next year.

Taxpayers for Common Sense noted that Congress and President Barack Obama were responsible for the August 2011 budget and debt limit deal that included the potentially harmful automatic-spending cuts scheduled to begin in January with a $109 billion installment.

  • Targets of the group’s plan include agriculture subsidies, the oil and gas industry and defense projects.

With members of Congress campaigning for reelection more than addressing the country’s fiscal problems, private groups are stepping up with their own deficit-reduction plans. They fear that if such work is left for a short session after the Nov. 6 presidential and congressional elections, Congress might end up letting the country go over the fiscal cliff.

The Taxpayers for Common Sense’s proposal would eliminate all government crop subsidies, saving $56.5 billion over 10 years, end a manufacturing tax break cherished by the oil and gas industry, for a $17.2 billion savings, and stop production of some big military projects, such as the V-22 Osprey, a tilt-rotor aircraft built by Boeing Co. and Bell Helicopter, a unit of Textron Inc.

The group’s proposal, obtained by Reuters, does not address some of the thorniest problems facing Washington budget writers: the accelerating growth of huge government-backed retirement and health-care programs related to an aging U.S. population.

For example, the nonpartisan Congressional Budget Office estimates that outlays for the Social Security retirement and disability programs will grow from $725 billion last year to $1.35 trillion in 2022.

Similarly, the Medicare health-insurance program for the elderly is projected to expand from $560 billion last year to nearly $1.1 trillion in 2022, CBO estimates.

  • Voters have not signaled a willingness to support significant cuts to these programs and any reforms could take Congress many months, or years, to address.

In a move to save $645 billion over a decade, the group calls for placing new limits on the tax deduction on home-mortgage interest.

(This sounds like some have truly been working on this and it should be honored.    However, this mess was not created by this administration nor by the actions of our president.    True he was a party to this agreement for 1-2-13,  but under extreme duress with a proverbial gun in the ribs.  It should be tossed out and started over.   We could so easily be guilty of the absurd “Austerities   seen in the Eurozone.  We ARE  on the path to recovery and that is the direction which should be taken.

There are still other things which would be appropriate as almost everyone would agree (except those with greatest wealth) who will be fine no matter what is done.   1) means testing on Medicare benefits > the wealthier need less here, with no burden whatsoever.   2) eliminate those infernal Bush tax cuts for the wealthy – it never should have happened in the first place.   3) Finally, to renegotiate the pharmaceutical costs of medicines to the government for the purpose of getting costs in line with the costs of all other countries in the world.  There was never any reason to do such a thing as sticking it to America,  just because they could and the never-ending supply of politicians who would gladly go along with it while lining own pockets.     Its about time to start playing by those rules higher ups like to speak of.     Jan) 


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