- Will citizens expect to keep retirement ages low even though they are living longer and aren't paying a bigger premium? (ie payroll tax) (G2A Living Longer)
- Will they expect those who saved and invested to pay for their retirement benefits like some welfare queen?
- Or will they only ask for what they put in plus some reasonable interest rate minus some insurance premium? (ie disability and survivor's benefit coverage)
Well at least we have 2 proposals on the table, now we will see what happens... Will we tip towards even more gov't forced wealth transfer, or will personal property rights be honored?
Thoughts?
Reuters Fiscal Cliff Offers Compared
Republican Offer
28 comments:
"Will citizens expect to keep retirement ages low even though they are living longer and aren't paying a bigger premium? (ie payroll tax)."
The Democrats are proposing an increase in revenue. Where is that in the Republican proposal?
--Hiram
"* $800 billion in new revenue through tax reform;"
What tax reforms? Republicans refused to specify how they would raise revenues during the campaign and they aren't doing it now.
* unspecified healthcare program savings of $600 billion;
"unspecified"? Is that an offer? Meanwhile, during the campaign Republicans attacked the president for the health care program savings he actually specified.
* other savings from changes to unspecified mandatory spending programs of $300 billion;
There's that word "unspecified" again.
* tying cost-of-living increases for federal benefit programs to the Consumer Price Index to get savings of $200 billion;
So what does this mean? Are the cost of the programs themselves limited despite the fact that they will serve a growing number of recipients? What happens when the cost of care grows faster than the cost of living which will surely be the case as Americans age?
* and further unspecified savings to domestic spending programs of $300 billion.
The third proposal in a row where what the Republicans are advocating is left unspecified. In baseball, when you get three strikes in a row, you return to the dugout.
--Hiram
I agree the GOP has their problems and it is hard to support their poor organization.
Yet it sounds like you are voting for 1 & 2.
Turn SS & Medicare into a welfare system that is paid for by those that worked, saved and invested.
I think Republicans ought to just say they are waiting to see the President's budget pass the US Senate before making any further proposals. They've made as many as 20 over the last 3 years, including 3 complete budget bills that passed the House. The Senate has none, the President has none. Why should the Republicans have to propose anything at all? Obama likes to say he won, so why doesn't he lead?
J. Ewing
New revenue isn't tax reform, it's a tax increase. And the president is on record as favoring a tax increase. What Republicans want is lower taxes on the wealthy, tax cuts to be paid for by everyone else. What Boehner is proposing is what Romney proposed during the election, and Romney was the guy who lost.
I am certainly in favor of cutting Medicare costs. But when the president during the campaign actually proposed something specific, that 700 billion dollar cut, he was opposed by Republicans. And it's pretty much a given that any attempt to rein in costs will be fiercely attacked by Republicans as socialized medicine, rationing, death panelism, etc. It's a basic rule of life Republicans ignore, you can't cut costs without actually reducing expenditures. Without detailing those reductions, what you have is nothing more than wishful thinking.
As for the senate thing, on the whole, I think the president can deliver a majority in support of the president's proposal. That isn't the sticking point here. The issue is what will come out of the house.
--Hiram
Just cutting payments without cutting expectations and calling it savings isn't fixing the problem. Worse yet was when Obama says they were gotten by reducing waste and profits.
Now if he had said, we have implemented price controls which may limit your access to care, or reduce the quality of your care... Then he would have shown character and been honest.
It seems to me the GOP is being more honest. They are trying to adjust people's expectations...
"Our savings rate was too low to pay for the Entitlements, we need to adjust the Entitlements to be aligned with what our payroll tax can afford."
I like this Simpson guy...
CNN Simpson
It must be nice to be able to say what one is thinking... After being a politician.
Fiscal Commission Moment of Truth
I have often wondered why politicians think they know so much about markets.
--Hiram
And Boehner wanted this job??? These politicians are a unique breed. Fox News Backlash - Boehner
I think Simpson is right on. If the Democrats insist on raising dividend and capital gains tax rates, I am guessing a bunch of people will be selling big positions over the next few weeks.
They may buy back right away into another stock, but they will absolutely want to take the capital gain this year. And it is unlikely they will pay as much for dividend paying stocks if they have to pay higher taxes on the return.
Maybe cash, gold or real estate will look better to them for awhile. It doesn't matter though, right? Liberals keep inferring that only the Rich benefit from the low capital gains and dividends taxes.
Oh I forgot almost all of our personal retirement vehicles have some share of their assets in the stock market. (ie pensions, IRA, 401Ks, etc) Buckle your seat belt !!!
I think people tend to overestimate the effect of tax consequences on the decision to buy or sell stocks. For one thing, selling stocks now which have a capital gain means paying some tax. Not selling means deferring the tax altogether. Let's bear in mind that huge portions of America's stock inventory are held in various tax protected accounts like IRA's. Changing tax rates has no impact on them.
Let's keep in mind that stocks didn't perform well in the Bush years despite lower tax rates, and did perform well in the Clinton years despite higher tax rates.
Let's keep in mind that the rationale many offer for paying off the debt is that it would push people to invest in stocks. It would seem therefore that going off the fiscal cliff might have a positive impact on stock prices, especially if it was seen as a matter of America getting it's fiscal house in order.
I am not making any predictions here really one way or another. But what I am saying is that there is a lot of conventional wisdom out there concerning the potential impact of the fiscal cliff on markets, and that conventional wisdom is often a lot more conventional than it is wise.
I wonder where Simpson was when Congress was doing something that very clearly had a negative effect on markets, that is, threatening to dishonor America's debt by refusing to raise the debt ceiling.
--Hiram
I forgot almost all of our personal retirement vehicles have some share of their assets in the stock market. (ie pensions, IRA, 401Ks, etc) Buckle your seat belt !!!
As I said, a huge portion of stock holdings are in retirement accounts. Changes in tax rates will have no impact on those holdings. Indeed, they will be looking for bargains if such appear.
--Hiram
I don't think the older wealthy folks have that much of their stock assets in tax deferred shelters. Remember, we limited their use of them. So they may want to pay the 15% tax now rather than a 39% percent tax later. Only time will tell...
Looks like the Aug 2011 stock market impact was pretty short lived.
Stocks took a hit in 2011, not because of concerns of about capital gains taxes, but because of worries that Congress would dishonor America's debt. That, obviously, is a real concern for markets, both domestically and internationally, and it's effect was very real. Although debt limit issues are a part of the current negotiations, they don't seem to be at the forefront, and this time, it's the president who is pushing them in a way the markets will view very positively.
The concern with the fiscal cliff is austerity. It means lower profits for corporations, which is the way it one way it could affect stock prices. It also means lower consumer demand, since it would raise taxes pretty much across the board. That also isn't good for business. It would be anti stimulative. It is , policy writ large, and I am not in favor of going over the cliff. But the president learned a bit hopefully about engaging in hardball negotiating tactics from the Republicans in 2011 and he is in the power position now the result of the failed gamble Republicans made when they agreed to the cliff.
Wasn't it Rahm Emmanuel who said something about every crisis being an opportunity? This is an opportunity to put the fiscal affairs back in order in a number of ways. It would be a shame if the president misssed it.
--Hiram
Here is what scares me about voices of moderation:
http://www.washingtonpost.com/opinions/matt-miller-fiscal-cliff-forever/2012/12/04/3894e350-3e69-11e2-ae43-cf491b837f7b_story.html?hpid=z2
"As for the senate thing, on the whole, I think the president can deliver a majority in support of the president's proposal. That isn't the sticking point here. The issue is what will come out of the house. " --Hiram
HA! The last 3 Obama budgets were defeated unanimously in the US Senate-- not a single vote, Democrat or otherwise. Harry Reid then refused to produce a budget-- contrary to law, mind you-- and steadfastly refused to vote on any of the many budgets passed by the GOP House. Obama is fond of saying "I won," but when it comes time to actually discharge the responsibilities of the post, he's MIA. Budget-wise, the GOP should just say "not my job."
J. Ewing
The last 3 Obama budgets were defeated unanimously in the US Senate-
I am not sure what the relevance of that is here. Executive budgets generally don't get much support in the legislature until they are at the point of passage. In Minnesota, in the last legislative session, Mark Dayton's budget got virtually no support from Democrats in the legislature when it had no chance of passage. But no one doubts now that the governor will be the dominant player this time around.
--Hiram
If austerity is what people fear about the cliff, why are the Democrats obsessed with tax cuts?
WP Miller Fiscal Cliff Link
It is an amusing opinion piece. Definitely written by a Keynesian that wants us to spend our way out of this mess. Personally I think Americans need a dose of reality, not some more government debt. G2A Recession
We seem to think we can keep our incredible standard of living going while spending most of our money overseas on cheap products... Very confusing...
The upside is that hopefully we are raising standard of living in the foreign countries so they can afford more of our goods.
Yet we will still need to compete...
My point is that neither Obama nor Senate Democrats have ever passed a budget document and sent it to the House, yet these "winners" who supposedly are running everything, sit back and chatter as if they can't do anything until Republicans come up with a detailed budget. Then, when the GOP DOES deliver, as they have multiple times, the Democrats simply refuse to consider it and continue to badmouth Republicans. It's all they have and it is NOT anything approaching good governance.
My point is that at the moment the president is engaged in negotiations with John Boehner, and whatever grievances there have been in the past shouldn't provide an excuse for not continuing the process.
Let's not get ahead of ourselves here. Should a deal be concluded with the house, it will then move on to the senate, where senators of both parties will have a say about it.
--Hiram
Exactly. And if I was Boehner I would just walk away and say, "what did you do with the last 20 budgets we passed?"
"Exactly. And if I was Boehner I would just walk away and say, "what did you do with the last 20 budgets we passed?"
We vetoed them. We shouldn't allow precedential value to failure.
So my question for Boehner is, why are you raising my taxes?
--Hiram
Obama never vetoed them. Harry Reid never even brought them up in the Senate, while unlawfully refusing to produce any budget of his own AND refusing to pass Obama's budgets.
Obama never vetoed them.
So Boehner never even passed something that could get by the senate? That hardly makes the case that he is an effective legislator.
We can establish more barriers for addressing our problems in a process that already has too many of them. Or we can sit down and make real decisions. I have no time and no interest in the former. When people are ready to talk, they will talk.
--Hiram
So when will Obama and the Democrats be ready to talk?
Obama and Democrats are always talking. Mostly it is to badmouth Republicans for trying to solve the problem.
That what Boehner got passed in the House didn't pass the Senate isn't Boehner's fault. The Senate never gave a one of the House budgets a hearing. And still produced nothing of their own-- no "counterproposal."
Maybe that's the whole problem here, that only one side is actually negotiating at all, let alone in good faith? I guarantee that if Boehner gave Obama everything he asked for, Obama would move the goalposts for the deal. The issue is of more value than the solution for them. It allows them to continually bash Republicans while never having to propose something themselves, which might be unpopular.
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