How to Make tax Cuts Permanent?

[Donutboy 0]

Fed chief: Pay for tax cuts by trimming Social Security

By Martin Crutsinger

The Associated Press

WASHINGTON — Federal Reserve Chairman Alan Greenspan said yesterday that Congress should make President Bush's tax cuts permanent and cover the $1 trillion price by trimming future benefits in Social Security and other entitlement programs.

Greenspan told the Senate Banking Committee that Congress, "as a first order of business," should restore budget rules that cap discretionary government spending and require increases in entitlement benefits or cuts in taxes to be offset by other program cuts or other tax increases.

Greenspan was asked how he would come up with the decade-long cost of $1 trillion to pay for extending the 2001 and 2003 individual tax cuts. "I would argue strenuously that it should be taken out on the expenditure side," he answered.

Greenspan, chairman of a commission that recommended solutions to a Social Security funding crisis in 1983, said he has felt for a long time that the promised program benefits greatly outweighed the government's ability to pay for them.

He recommended two items for study in terms of trimming benefits: linking the retirement age to the population's longer life spans and tying annual cost-of-living benefits in Social Security to a less-generous inflation index than the Consumer Price Index.

Committee members questioned whether such proposals could pass Congress, especially because they would cut benefits for 77 million Americans in the baby boom generation who are nearing retirement age.

But Greenspan said it was precisely as a result of that looming wave of retirement that legislators need to update Social Security, Medicare and other entitlement programs.

"We have constructed a good deal of the benefit structure over the last quarter century without a real firm look at whether or not the real resources were there to meet those benefits," Greenspan said. "And I suggest that what we have to do, as difficult as it's going to be, is to relook at some of these commitments."

Greenspan said it would be far better to do that now than to discover later that the government does not have the resources to meet baby boomers' needs.

"My real concern is that when the time comes to start to pay these benefits, we're going to find that we are in very serious fiscal difficulty," Greenspan said. "I do think it's important for the people who are retiring to have a sense of security that what is being promised to them as they retire will indeed be there."

The budget rules that Greenspan favors reinstating expired in late 2002. He wants those "pay as you go" rules to apply to both spending and taxes so the deficit does not worsen; Bush is recommending they cover only spending.

If Bush had his way, he would not have to come up with the estimated $1 trillion needed to make the tax cuts permanent.

Greenspan came out in support of the administration on the permanent tax cuts, even in the face of deficits estimated to reach a record $521 billion this year.

At a critical point three years ago, the Fed chairman also endorsed the president's first tax cut, at a price of $1.35 trillion, as a good way to handle surpluses then projected to total $5.6 trillion over the next decade.

Also during the hearing, Greenspan was questioned about a recent tell-all book written about former Treasury Secretary Paul O'Neill, whom Bush fired in December 2002.

In the book, O'Neill said he and Greenspan had a secret agreement that Greenspan publicly would call for a mechanism to be included in the 2001 tax cut that would tie cuts in future years to continued budget surpluses. If the $5.6 trillion in projected surpluses did not materialize, the trigger would roll back the cuts.

Greenspan said he believed at the time that such a mechanism, which O'Neill said he also advocated but was vetoed by Bush, needed to be part of the president's first tax cut because budget forecasts "are so difficult and we could not be certain that the surpluses were going to be in place."

Let's review. This administration thinks losing jobs overseas is good for America and now there's reason to believe he'll look at cutting Social Security benefits to our parents and grandparents to fund his tax cuts for his wealthy friends!!

[War Eagle 96 10]

President Bush's tax cuts permanent and cover the $1 trillion price by trimming future benefits in Social Security and other entitlement programs

[DKW 86 7,726]

Cut the money We are throwing down the rat-hole called Social Security?

We would ALL be better off to just invest the money we are throwing away in SS into decent, honestly run mutual funds and slowly shut down SS as it is now, over the next 30 years or so. Longterm, SS is not sustainable due to the incredibly large number of baby boomers. It is just a numbers thing. No amount of taxation on our kids will be able to support us all.

[Donutboy 0]

Cut the money We are throwing down the rat-hole called Social Security?

We would ALL be better off to just invest the money we are throwing away in SS into decent, honestly run mutual funds and slowly shut down SS as it is now, over the next 30 years or so. Longterm, SS is not sustainable due to the incredibly large number of baby boomers. It is just a numbers thing. No amount of taxation on our kids will be able to support us all.

I don't oppose changing the face of Social Security by investing in mutual funds, but I don't advocate cutting the funds of the current recipients to pay for a tax cut for the wealthy. These seniors have paid into the system for their entire lives and I think it's very crass to even discuss cutting their benefits. It's not a political position I'd want to take this fall!!

[War Eagle 96 10]

but I don't advocate cutting the funds of the current recipients to pay for a tax cut for the wealthy.

Are you talking about "high income earners"?

The wealthy, i.e. people that don't work, because they have so much money left to them by their ancestors etc., don't even pay income taxes....because they don't earn income. You can have 10 BMW's, 10 houses, a bank account with $10millioin it and 10 ladies in waiting (now that's wealthy) and not pay income taxes. In fact, if you are that wealthy and don't earn an income, you actually earn a spot in the govt's "poverty" statistics.

When you say "wealthy" in terms of this tax cut issue, do you even realize you're talking about a working couple earning $100K a year (that'd put them in the top 5% of income earners)?

You need to watch the words you're slinging around. You're not talking to a bunch of idiots.

[TrueBlue72 0]

If I could have invested all the money I paid into social(ist) security over the 39 years I contributed, I would be a wealthy man! It is highly unlikely that I will ever get back the money I contributed, much less any of the interest that should have accumulated over those years.

Social Security is income redistribution, pure and simple. It was a political ploy of the Democratic administration of FDR and was based on the principle that there would always be many more younger, working people than older, retired people. It was bad policy then and continues to be bad policy.

Before you libs start bashing me, realize that I'm not some young guy complaining about the deductions; I'm retired and collecting from SS!!!!! Even with that, I am not a believer in the program. I could have done a hellava lot better with my investments than the bureaucrats in Washington did.

[TitanTiger 20,708]

Just for clarification, the top 5%, as of 2001, made just under $128,000 or more. And don't forget, that's $128,000 no matter where you live or what your cost of living is. AND, that's gross income, not what you have after taxes. Do you think $128,000 goes very far in a larger city such as Chicago, New York, Dallas, or San Francisco? That may seem like a lot living in Alabama, but in some places, because of home prices, property taxes, and other cost of living differences, that money doesn't buy you what it will in others.

But also, you have to also mention that the top 5% of earners in this country account for over 50% of all income taxes paid. So it's not like they aren't doing their part, especially in proportion to their numbers.

Want to hear something else that will make you sick? The top 10% (those who have a combined household gross income of $92,754 or more) pay just under 65% of all the income taxes. And the top 25% (those who make $56,085 or more) pay just under 83% of all income taxes paid! No frickin' wonder most of the tax cut went to people the top wage earners...THEY ARE JUST ABOUT THE ONLY ONES PAYING INCOME TAX IN THE FIRST PLACE!!

That's why Democrats love to use terms like "the wealthy". It's nebulous enough to allow people to think of millionaires when many may not realize that they or people they know that aren't exactly future candidates for "Lifestyles of the Rich and Famous" would fall into that "wealthy" category.

[War Eagle 96 10]

Just for clarification, the top 5%, as of 2001, made just under $128,000 or more. And don't forget, that's $128,000 no matter where you live or what your cost of living is. AND, that's gross income, not what you have after taxes. Do you think $128,000 goes very far in a larger city such as Chicago, New York, Dallas, or San Francisco? That may seem like a lot living in Alabama, but in some places, because of home prices, property taxes, and other cost of living differences, that money doesn't buy you what it will in others.

But also, you have to also mention that the top 5% of earners in this country account for over 50% of all income taxes paid. So it's not like they aren't doing their part, especially in proportion to their numbers.

Want to hear something else that will make you sick? The top 10% (those who have a combined household gross income of $92,754 or more) pay just under 65% of all the income taxes. And the top 25% (those who make $56,085 or more) pay just under 83% of all income taxes paid! No frickin' wonder most of the tax cut went to people the top wage earners...THEY ARE JUST ABOUT THE ONLY ONES PAYING INCOME TAX IN THE FIRST PLACE!!

That's why Democrats love to use terms like "the wealthy". It's nebulous enough to allow people to think of millionaires when many may not realize that they or people they know that aren't exactly future candidates for "Lifestyles of the Rich and Famous" would fall into that "wealthy" category.

So right.

[clantontiger 0]

Great post titan. Dems always try to use the "us" against "them" tactic. Class warfare at its best.

[DKW 86 7,726]

Great post titan. Dems always try to use the "us" against "them" tactic. Class warfare at its best.

Well, when it is all you have.....

Great post Titan!

[DKW 86 7,726]

Cut the money We are throwing down the rat-hole called Social Security?

   

We would ALL be better off to just invest the money we are throwing away in SS into decent, honestly run mutual funds and slowly shut down SS as it is now, over the next 30 years or so. Longterm, SS is not sustainable due to the incredibly large number of baby boomers. It is just a numbers thing. No amount of taxation on our kids will be able to support us all.

I don't oppose changing the face of Social Security by investing in mutual funds, but I don't advocate cutting the funds of the current recipients to pay for a tax cut for the wealthy. These seniors have paid into the system for their entire lives and I think it's very crass to even discuss cutting their benefits. It's not a political position I'd want to take this fall!!

but I don't advocate cutting the funds of the current recipients

Who the heck said that? I think I was brutally clear on phasing it out over 30 years.

[Jenny AU-92 0]

Even tho I have been working for a number of years, my SS benefits (such as they may be in thirty years) will not be as high as my peers because I worked for municipalities for the first several years of my working life. Like other government workers, I was allowed to invest in a SOCIAL SECURITY REPLACEMENT PROGRAM - which means what would have been my SS contributions for those years are instead sitting in a nice little IRA type set up, safe and sound, just waiting for me to retire. Can't be touched, don't go to pay anyone else - it's ALL MINE.

I still don't get why the same federal workers who receive this benefit (including Congresspeople) are so opposed to letting everyone else do it too.

[tigereyes 19]

Cut the money We are throwing down the rat-hole called Social Security?

We would ALL be better off to just invest the money we are throwing away in SS into decent, honestly run mutual funds and slowly shut down SS as it is now, over the next 30 years or so. Longterm, SS is not sustainable due to the incredibly large number of baby boomers. It is just a numbers thing. No amount of taxation on our kids will be able to support us all.

I agree. It will hurt older people but remember that they are the ones who started the Socialist Security System. They had the chance to set this up right in the beginning and they blew it and now it is coming back to bite them in the butt. They could had set it up as a private retirement program that each person would own for themselves, but they had to set up an entitlement program.

[swensks 0]

Cut the money We are throwing down the rat-hole called Social Security?

We would ALL be better off to just invest the money we are throwing away in SS into decent, honestly run mutual funds and slowly shut down SS as it is now, over the next 30 years or so. Longterm, SS is not sustainable due to the incredibly large number of baby boomers. It is just a numbers thing. No amount of taxation on our kids will be able to support us all.

I agree...but you can't shut it down because it's broke. Broke as in 'has no money left.' The money we all pay in each month is what is getting redistributed Robin-the-Hood style. There won't be any phasing out or getting rid of it I don't think.

Titan...very good post. I've also seen that the top 2% of earners in the US paid over 50% of the taxes last year. So 2% made 50% of the contributions...that is sick. All that while those making little to nothing pay nothing at all and get credits for all their kids. Does that seem a bit much?

[War Eagle 96 10]

getting redistributed Robin-the-Hood style.

Actually, Robin Hood took from the govt and gave the booty back to the people who earned it. U.S. govt. is Robin Hood in reverse.

[swensks 0]

getting redistributed Robin-the-Hood style.

Actually, Robin Hood took from the govt and gave the booty back to the people who earned it. U.S. govt. is Robin Hood in reverse.

Well, either way the money is being taken from the rich and given to the poor. The rich and poor are just reversed.

You're right though.

[Tiger Al 0]

I think I'm beginning to see! All these years I thought my progressive views actually helped the lesser ones of our society by allowing them to lean on those of us who were more secure in our footing. That's crazy! No old person deserves to get any of MY money anymore. If they didn't prepare for their retirement themselves then too bad. Die in the street for all I care, just don't bother me by dying on mine! They should've been smarter than to expect that we'd support their lazy duffs their whole lives anyway. It's MY money and I'm tired of everybody taking it from ME!

And, if some guy got his arms amputated in a mill that's HIS problem. He should have been more careful. Those missing arms don't stop him from stealing MY money, does it? He'd better hope to GOD that he was financially prepared to lose his ability to work forever because WE shouldn't have to be responsible for him.

And don't get me started with the handicapped. Their parents just want to steal MY money because they're too LAZY to get a job or two or three. Why is their re**** kid MY problem? Surely to God it could find work doing something so it wouldn't have to steal MY money. They're lazy too. If they got jobs they'd see they're not as handicapped as they think. They probably just act that way so they can steal more of MY money.

Yeah, SS is definitely a crock! I was talking to a guy just now about my newfound "freedom" and he started in on how these people on SS now fought in wars and all and how they sacrificed for us, blah, blah, blah. I don't really see how that's either my problem or my concern. They chose to do that, I didn't make them fight anybody. Somehow that justifies them stealing MY money every chance they get! If they can't (won't, most likely) then let 'em beg for money, just stay away from me because you've stolen from me for the last time! And, if you're too "proud" to work or beg then, again, you can die in the street! (but not MINE!)

I'm sure once I get used to my new outlook I'll find some more ways these lazt a-holes are stealing MY money.

[channonc 466]

Great post, Al!!!

[TitanTiger 20,708]

Unable to work is one thing...as is "not working, but seriously looking". Able and unwilling is what gets my dander up and for those people, I'm sorry, it is not my, your, or the this country's responsibility to do a darn thing for them.

[War Eagle 96 10]

Actually, Al, all of those problems can be handled out of the goodness of our hearts. Through churches, philanthropies, families, friends and "outreach" organizations all this would be taken care of. If I had even 50% the other half of my income that goes to the govt., I would have a lot to give to charities and such.

But, instead, that money is taken from me by way of the police power of govt. and is wasted, squandered and spent on USELESS programs for the most part instead of being used to help relieve those problems you speak of.

But, nice try with all of those emotional appeals. They don't work on me.

I think about those issues logically and try to put the "feelings" aside. Try it sometime.

[Tiger Al 0]

Actually, Al, all of those problems can be handled out of the goodness of our hearts. Through churches, philanthropies, families, friends and "outreach" organizations all this would be taken care of. If I had even 50% the other half of my income that goes to the govt., I would have a lot to give to charities and such.

But, instead, that money is taken from me by way of the police power of govt. and is wasted, squandered and spent on USELESS programs for the most part instead of being used to help relieve those problems you speak of.

But, nice try with all of those emotional appeals. They don't work on me.

I think about those issues logically and try to put the "feelings" aside. Try it sometime.

SCREW THAT!!! I'm not going to give any poor deadbeats any more of MY money than I have to. "Tithe" is just another "entitlement program" as far as I'm concerned. To be "needy" is just a sugarcoated way of saying "lazy." Get out and WORK and leave MY money alone!

[Weagle98 119]

Except tithing is voluntary, not forced upon us.

[TitanTiger 20,708]

SCREW THAT!!! I'm not going to give any poor deadbeats any more of MY money than I have to. "Tithe" is just another "entitlement program" as far as I'm concerned. To be "needy" is just a sugarcoated way of saying "lazy." Get out and WORK and leave MY money alone!

Exaggerate much?

[Tiger Al 0]

Except tithing is voluntary, not forced upon us.

You believe in the Bible, boy?

[DKW 86 7,726]

Tithing IS totally voluntary. "The Lord loves a cheerful giver."

I support many able charities. The difference between charities and the govt is that real charities answer for the money and donations they spend. The govt has absolutely no oversite on the money they waste. Al, that is the point. I doubt that one of us would be upset about SS, Medicare, Medicaid, Foodstamps etc. if they wer managed correctly. They arent by a long shot tho.

The last figures I saw for the Food Stamp program was that only .28 cents of every dollar actually got to the kids. .72 of every dollar was eaten up overhead and payroll. Any business or charity run that poorly would be gone in no time.

Al, looked at another way, think about all the more help you could give out if the govt would just adopt real business practices. We could feed the poor and hungry and actually have retirement for us too.