This year's version of the financial battle in Washington has been coined by the Corporate Media Propagandists (CMP) as "The Fiscal Cliff".
The "game' is going once again in the Good-Cop/Bad-Cop scenario with the Good Cop vowing to lower taxes on all up to $250,000, while increasing the tax rate for those making more than that. Of course one has to look hard and long in order to find any of those making over $250,000 who are paying anywhere near 35%. In fact there are more paying far less than the average taxpayer than there are those paying more. Most of the wealthy are paying half of the rate in terms of percentage than are the average taxpayer, primarily because they have tax loopholes that the average payer doesn't have. Therefore, the Good Cops are being given credit for something that means little in the real world.
These Good Cops are calling for lower tax rates while at the same time saying we need more revenues in order to pay down the deficit. They want us to believe that lowering tax rates will increase revenues. Of course the last time we had this discussion remember President Obama did cut F.I.C.A. taxes. At a time the propaganda line was the Social Security System was bankrupt he proposed we cut the amount going into the Fund, thus speeding up the process of bankruptcy. It was also the first time Social Security became a bargain chip in negotiations. Previously it was "hands off".
The Bad Cops, on the other hand, are standing their ground to cut spending in order to pay down the deficit. Their proposal is to attack what they call "entitlements", meaning Medicare and Social Security.
In order to give somewhat of an idea of where the Bad Cops are coming from I give you a message I received from Senator Rob Portman, Ohio:
" Dear Dennis,
Thank you for contacting me to express your views on Social Security. It is good to hear from you.
As you know, Social Security faces long-term challenges that demand a lasting solution. This is particularly true as more "baby boomers" reach retirement age. Social Security is too important and too many seniors rely on it for us to ignore the fact that, according to the Trustees of the Social Security Trust Fund, the Social Security program is running a cash deficit of about $53 billion this year, and will be in deficit into the foreseeable future. This means that the payroll tax receipts are less than the benefits being paid out, reflecting the unsustainable financing of the program.
Some background: Social Security is a pay-as-you-go program, meaning that current payroll taxes finance current retirees. This works as long as there are enough taxpayers to finance current retirees.
Washington had long known that 77 million retiring baby boomers would eventually strain Social Security's finances. So in 1983, lawmakers enacted reforms resulting in Social Security running a large surplus between 1983 and 2009. This surplus was supposed to be large enough to finance the program's deficits from 2010 through 2033. However, instead of saving that money in a trust fund for future retirees, Washington simply spent those surpluses each year -- and promised to pay Social Security back later. No funds were actually saved.
While the promise to repay the raided Social Security Trust Fund is backed by the full faith and credit of the federal government, there is no pot of money available to do so. Thus, Social Security's current deficits will have to be financed by new spending cuts, tax increases, or increased borrowing -- which is the same situation as if no trust fund had existed at all.
The Social Security Trust Fund's lack of any actual economic assets was noted back in 2000 by President Clinton's Office of Management and Budget, which wrote that, "These balances are available to finance future benefit payments ... only in a bookkeeping sense. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits, or other expenditures."
While Social Security must rely on outside funding sources to repay the trust fund, the program's trustees note that the trust fund itself lasts only until 2033, at which point no more outside funding can be transferred into program. At that point, beneficiaries will see an approximate 25 percent decrease in benefits.
This must not happen. Social Security is vital to millions of our seniors who currently rely on it, and should be in place as a core safety net for future generations. We need to strengthen and preserve Social Security. I am committed to a bipartisan solution to ensure the sustainability of the program, and to avoid the drastic cuts to benefits that would result if the Trust Fund were exhausted.
We must act sooner rather than later to avert massive tax increases or benefit cuts that would result from further inaction. I will keep your views in mind as I work to strengthen and preserve the program for future generations.
Thank you again for taking the time to write. For more information, I encourage you to visit my website at http://www.portman.senate.gov. Please keep in touch.
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