Obama Team's Deficit Cutting Proposal: Benefit the Few, Harm the Many - by Stephen Lendman
Some background. In his January 27 State of the Union address, Obama announced plans to "freeze government spending for three years," starting in 2011, saying he'd establish a bipartisan fiscal commission by executive order to cut the deficit by imposed austerity. In other words, harm the many by social spending cuts, including Social Security and Medicare, not defense, banker handouts, other corporate favorite subsidies, or the rich.
Then on February 18, a White House press release announced the commission's establishment - a "bipartisan National Commission on Fiscal Responsibility and Reform (NCFRF)," co-chaired by two deficit hawks, former Senator Alan Simpson (R. WY) and Erskine Bowles, former Clinton White House Chief of Staff, heading an 18-member team stacked with like-minded members. Their mandate: slash Medicare, Social Security and other social spending. Fiscal austerity for the many, unlimited wealth opportunities for the few, an agenda from hell.
On November 10, New York Times writer Jackie Calmes headlined, "Panel Seeks Social Security Cuts and Tax Increases,' saying:
Obama's commission presented "a politically provocative and economically ambitious package, (igniting) a debate that is likely to grip the country for years." Among others, its proposals include:
-- ending or capping middle class tax breaks, including deductions for home mortgage interest and tax-free employer provided medical insurance;
-- taxing capital gains and dividends the same as ordinary income; long-term capital gains and qualified dividends are currently taxed at 15%;
-- lowering income tax rates dramatically to 9, 15 and 24%, down from six current brackets ranging from 10 - 35% for income over $373,650;
-- slashing corporate tax rates from the top 35% rate to 26%, combined with eliminating some deductions;
-- making permanent the research and development tax credit;
-- making deeper Medicare cuts; increasing Medicaid co-pays; slashing $54 billion from graduate medical education; and enacting "comprehensive tort reform," making it harder for aggrieved patients to file malpractice suits;
-- raising the Social Security retirement age to 69 by 2075; reducing cost-of-living increases, now based on annual inflation rates; raising the payroll tax ceiling to $200,000, letting million dollar earners off the hook like now;
-- cutting the federal work force 10% by 2015, adding to the unemployment rolls;
-- raising the federal gasoline tax by 15 cents a gallon and imposing "user fees" on motorists - to have workers fund the federal transportation and highway spending program; and
-- cutting $100 billion in military spending, including administration, inefficiencies, "unnecessary" weapons (likely ones Pentagon brass don't want in lieu of others they won't sacrifice), force contingents on overseas bases, and healthcare benefits for military retirees through enacted premiums and higher co-pays; unmentioned is the Pentagon's open-ended black budget, supplemental Iraq and Afghanistan appropriations, and commitment to continued imperial wars; also that military spending will grow annually, unimpeded;
Overall, by 2020, NCFRF proposes cutting growing deficits by about $3.8 trillion, half of the expected $7.7 trillion otherwise incurred.