He has challenged the Conservatives to answer how they will balance the budget with cuts alone.
Repealing the stimulus, cancelling health care, raising the retirment age, reducing colas will not completely do the job; he states, and ignorning the incentives of broad based tax cuts and a pro growth agenda he seems to pretty much just want to raise taxes to cover the whole thing.
Now he states that "o" and his team are so good they should go on the road and cure Europe. He also has a lot, a lot, of vitriol for the TEA party movement.
OK, so let's see if you can address this little one.
What have "o" or the Democrats cut? Don't talk about the commission, its recommendations are in the future and we may be Greece by then. The "adults" are in charge you say? It seems that what those in charge have done is taken their parents credit card and spent more, planning on their children picking up the bill.
The TEA party wants smaller government which spends less money. Granted cuts alone might not balance the budget, but what is wrong with budget cuts...now!
So are you just for tax increases? What have the Democrats cut? And, even giving your party of adults the benefit of the doubt, that tax increases are inevitable, why no spending cuts?
Hard to defend.
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Unlike Jim, Hags, Mark C, Mark R, Riegel, Sara, etal, I will answer the challenge.
First - your laundry list of cuts not only will "not completely do the job", it won't even come close. Please stop pretending it will. Your broad-based tax cuts will reduce relative revenue, thus moving the deficit in the wrong direction. Please learn from history, my stubborn friend.
ANSWER to the first question: The Democrats have not made any material spending cuts that I am aware of during this Congress. When one is fighting the worst recession since the Great Depression, spending cuts are not the order of the day. One doesn't fight a severe downturn by pulling still more money from the system. Herbert Hoover (R) taught us that - even if the lesson was lost on his political descendants.
"The Tea Party wants smaller government which spends less money" except, that is, on Social Security and Medicare - the largest expenses in the budget, save for Defense. They shout about spending cuts without specificity. Sadly, the vast majority have absolutely no clue where they would cut or what it would add up to. Yet polls show they are very fond indeed of our two principal entitlements. Hypocrisy and ignorance rule the movement. It is the manifestation of what is wrong with our country and why we have a gaping hole in the federal budget.
ANSWER to the second question: The deficit will be beat primarily through new taxes and economic growth. We need to arrest the growth of entitlement spending and cut where we can. The improving economy should allow for material spending cuts in 2011 forward.
Defense needs to be gradually reduced to approximately 3% of GDP (from 5%). This should be a 5 - 10 year plan, as modified by events.
Discretionary spending should be cut 10% and frozen until the budget is balanced (not including any Social Security surpluses).
The entitlement age for Social Security and Medicare should be gradually raised (perhaps 4 months per year) to 72 +/- with a formula attached that will continue to gradually raise the age if we keep living longer.
That's it for my spending cuts - achievable IMO in a grand bargain that also calls for new revenues.
My one favored tax cut: Treat dividends as expenses for corporations. This will eliminate double taxation as well as perverse incentives it creates. This is a biggie, guys, pay attention.
My revenue neutral tax change: Cut FICA to 2.9% for both employer and employee and eliminate the Medicare tax. Completely replace the revenue with broad based carbon taxes - all effective 1/1/2011.
My preferred tax hikes:
Scrap the current federal estate tax and replace it with the capital gains tax on the estate, taxed as though the deceased sold everything at death, with a $1mm exemption. The revenue from this will be off budget and applied straight to debt reduction. A 20% rate will hardly be worth doing back flips to avoid. Let the generation that ran ran up the debt pay it down.
Incorporate an inheritance tax. Any inheritance proceeds shall be taxed as ordinary income, with a one time $1mm exemption. Any receipts from a trust or other historical silver spoon tax dodge shall be taxed as ordinary income.
VAT - I would phase in a 15% VAT over three years in three equal increments. According to Bruce Bartlett, this will be applied over a base of 33% of GDP thus yielding$50B +/- per point, or $750B +/- per annum. This is also the amount that we are spending on Medicare/Medicaid. I would tie the revenue to the expense such that the VAT rate would rise or fall according to said spending. Thus, we will effectively pay as we go. VAT too high? Then lower Medicare/Medicaid costs rather than simply handing the tab to the next generation.
OK, Jim - I gave you very specific answers. I think my proposals would balance the budget in 3 - 5 years and create substantial surpluses to pay down the debt thereafter. I have obviously given a great deal of thought to this topic. Can the same be said about the conservatives on this board?
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