There was a breakthrough of sorts yesterday with the Gang of Six, a bipartisan group of Senators, that agreed to $3.7 trillion deficit reduction plan that they believe can break a filibuster in the chamber. The proposal was viewed favorably by President Barack Obama. Even Larry Kudlow, host of CNBC’s The Kudlow Report, had nice things to say about it.
Most of us following the budget debate know that President Barack Obama’s threat to hold Social Security payments hostage is empty. The Treasury Department will have the cash flow available to make these payments. Really what this fight over the budget has done more than anything else is expose the myth of the Social Security Trust Fund, but no one is paying attention to that.
The administration needs a scare tactic and they are taking full advantage of it. This weekend on CNN’s State of the Union, White House Budget Director Jacob Lew wouldn’t answer a direct question on prioritizing payments, including Social Security:
Hoping he can manage to get a favorable district during reapportionment, Alan Grayson, who was fired by the voters of Florida’s Eighth Congressional District last year, announced yesterday that he will make another go of it in 2012:
WFTV learned on Monday that former U.S. Congressman Alan Grayson is running for office again.
On Monday, Grayson said he doesn’t plan to do anything different. He said he’s running again because of all the people who have reached out and asked him to. Grayson already raised nearly $100,000 in donations before filing his paperwork on Monday.
“We need somebody who’s gonna stick up for what’s right. Somebody with guts,” Grayson said.
Grayson said his approach this time around depends on the circumstances, but for the sake of supporters who sent him donations before he announced he’s running again, he said he has no plans to hold back.
“We’re fighting for our survival. We’re fighting for our jobs, our homes. We’re fighting for Social Security and Medicare,” said Grayson.
Grayson may not be running for his old seat with redistricting under way right now, he may end up running for a newly created seat for Orlando. It’s still to early to know who he will be running against.
While House Majority Leader Eric Cantor (R-VA) signaled yesterday that closing tax loopholes wouldn’t be off the table for his caucus, President Barack Obama will offer Medicare and Social Security cuts as a way to break through the ice to reach a compromise on the budget and debt ceiling deadlock that has leaders from both parties working overtime:
As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal. The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from the assault on government spending.
“Obviously, there will be some Democrats who don’t believe we need to do entitlement reform. But there seems to be some hunger to do something of some significance,” said a Democratic official familiar with the administration’s thinking. “These moments come along at most once a decade. And it would be a real mistake if we let it pass us by.”
Rather than roughly $2 trillion in savings, the White House is now seeking a plan that would slash more than $4 trillion from annual budget deficits over the next decade, stabilize borrowing and defuse the biggest budgetary time bombs that are set to explode as the cost of health care rises and the nation’s population ages.
Nancy Pelosi famously said that we needed to pass ObamaCare to find out what was in ObamaCare. They did that. So what do we find out is in the law? Well, it seems that a buttload of people who don’t qualify now can qualify for Medicaid under the new law according to a report by the Associated Press.
WASHINGTON – President Barack Obama’s health care law would let several million middle-class people get nearly free insurance meant for the poor, a twist government number crunchers say they discovered only after the complex bill was signed.
The change would affect early retirees: A married couple could have an annual income of about $64,000 and still get Medicaid, said officials who make long-range cost estimates for the Health and Human Services department.
After initially downplaying any concern, the Obama administration said late Tuesday it would look for a fix.
Maybe it’s just me, but perhaps the time to have fixed that was before this thing got crammed down the American People’s throats! Here we are with the budget problems we currently have, and we get a massive expansion of Medicaid and no one noticed? How much of an oops is it going to take here for people to realize there’s a problem with the way we create laws in this country?
The AP report details how this seems to have happened. Basically, today we consider Social Security as income for determining eligibility for Medicaid. Under the new health care law, that no longer is the case. The complexity of the law probably contributed to this going under the radar until just now.
It has been conventional wisdom that Rep. Paul Ryan’s budget plan hurts Republicans and gives Democrats an advantage in the 2012 election. However, a new Wall Street Journal/NBC poll suggests otherwise:
A Wall Street Journal/NBC poll asks Americans whether they would be more likely or less likely to vote for a candidate who “supports changing Medicare for those under 55 to a system where people choose their insurance from a list of private health plans and the government pays a fixed amount, sometimes called a voucher, towards that cost.”
The results: 38% are more likely to vote for a candidate who supports Ryan’s Medicare reform, 37% are less likely to vote for that candidate, while 18% say it makes “no difference” in determining their vote, and 7% are not sure.
If that number stands, that’s pretty great news for Republicans.
And one could even quibble with the question wording. It uses the much feared “voucher” word, which Ryan’s reform technically isn’t. And it simply says future beneficiaries could put their voucher toward “private health plans,” potentially leaving the wrong impression that some seniors could be denied coverage in the open marketplace. The private plans would be regulated by the government and required to offer coverage to all beneficiaries.
Earlier today, I noted the importance of Iowa to Tim Pawlenty’s hopes to capture the Republican nomination. And we’re there is going to be a lot of emphasis on that fact over the next two months, it’s worth noting that he had an excellent week last week:
A successful economic speech, one rival’s campaign implosion and another’s decision to skip an influential Iowa straw poll have given Tim Pawlenty a very good week.
His campaign hopes to keep the momentum going, getting the traction its needs to catapult the relatively unknown former Minnesota governor into a top contender for the Republican presidential nomination.
The mass staff resignations from Newt Gingrich’s campaign, combined with former Massachusetts Gov. Mitt Romney’s decision to skip Iowa’s Ames Straw Poll, gives Pawlenty an opening on which his campaign could capitalize.
The Pawlenty campaign’s gameplan has always relied on seizing moments in the race to help build the Minnesotan’s image and popularity.
Pawlenty was the most immediate beneficiary of the Gingrich implosion. Former Georgia Gov. Sonny Perdue (R), who was Gingrich’s campaign co-chairman, jumped to Pawlenty’s campaign following the mass resignations of the former Speaker’s staff.
Conservatives have also been swooning over Pawlenty after his “Better Deal” speech in Obama’s backyard, at the University of Chicago, on Tuesday. The plan, which would eliminate a number of deductions while slashing the top individual and corporate tax rates, won crucial praise from the right, whose support Pawlenty will need in the primaries.
In these troubled economic times, there’s been a stronger movement towards privatizing Social Security than I can recall seeing before. The most talked about proposal involves people aged 55 and younger being able to invest money instead of being roped into whatever Uncle Sam wants to pay out. Now, there’s legislation making a move towards privatization of social security:
House Republicans on Friday introduced legislation that would allow workers to partially opt out of Social Security immediately, and fully opt out after 15 years.
Rep. Pete Sessions (R-Texas), who chairs the National Republican Congressional Committee, and several other Republicans introduced the Savings Account for Every American (SAFE) Act. Under the bill, workers would immediately have 6.2 percent of their wages sent to a “SAFE” account each year.
That would take the place of the 6.2 percent the workers now contributed to Social Security.
Another 6.2% is sent to Social Security by employers. Under the Sessions bill, employers would continue to make this matching contribution to Social Security, but after 15 years, employers could also send that amount to the employee’s SAFE account.
Now, I’m still not thrilled about the idea of taking people’s money “for their own good”, which is all either Social Security or these new proposal really are. However, if it’s going to happen anyways, I’d rather have an opportunity to have some kind of say in the matter and possibly create an even better cushion. Not everyone seems to think that’s such a good idea (predictable):
While there are varying estimates on the unfunded liabilities (financial commitments that Congress has made), USA Today put out a sobering reminder yesterday of just how dire our fiscal solvency is:
The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record $61.6 trillion the total of financial promises not paid for.
This gap between spending commitments and revenue last year equals more than one-third of the nation’s gross domestic product.
Medicare alone took on $1.8 trillion in new liabilities, more than the record deficit prompting heated debate between Congress and the White House over lifting the debt ceiling.
Social Security added $1.4 trillion in obligations, partly reflecting longer life expectancies. Federal and military retirement programs added more to the financial hole, too.
The $61.6 trillion in unfunded obligations amounts to $527,000 per household. That’s more than five times what Americans have borrowed for everything else — mortgages, car loans and other debt. It reflects the challenge as the number of retirees soars over the next 20 years and seniors try to collect on those spending promises.
Matt Kibbe, president of FreedomWorks, wrote just last week that platitudes and promises of unicorns aren’t going to get us very far; Congress has to deal with entitlements, not by growing them or pushing growth-slowing taxes, but by repealing and reforming:
We may have our first high-profile primary against an incumbent for next year’s election. Rep. Jason Chaffetz, a Utah Republican currently serving in his second term, has indicated that he will run against Sen. Orrin Hatch (R-UT) next year:
Utah Rep. Jason Chaffetz has told several Utah political insiders that he plans to run against Sen. Orrin Hatch next year, setting up a major intraparty Republican 2012 battle.
All eyes have been on the second-term congressman for months. But five Utah politicos, speaking on condition of anonymity, said Chaffetz has told them directly in recent weeks that he will contend for the Republican nomination.
Chaffetz said Tuesday that he’s not making any official announcement yet, but he is moving toward a Hatch challenge.
“I have an increasing clarity,” Chaffetz said. “Until I walk up to the microphone to make an announcement, it’s not official. But it’s no secret I’ve been thinking about this and I’ve been gravitating in that direction.”
Hatch’s campaign manager, Dave Hansen, said he has heard that Chaffetz has made some calls to tell people he would get in, but hasn’t heard anything definitive.
While Sen. Mike Lee (R-UT), who was elected last year with tea party support, has not endorsed Hatch for re-election, the Club for Growth made it very clear yesterday that they would get behind Chaffetz; noting Hatch’s inconsistent record on economic issues: