Newsweek Mitch McConnell Calls to Cut Social Security, Medicare
"After instituting a $1.5 trillion tax cut and signing off on a $675 billion budget for the Department of Defense, Senate Majority Leader Mitch McConnell said Tuesday that the only way to lower the record-high federal deficit would be to cut entitlement programs like Medicare, Medicaid and Social Security.Maybe he has decided to start supporting the DEMs in this years election? I can already hear the attack ads...
"It’s disappointing but it’s not a Republican problem," McConnell said of the deficit, which grew 17 percent to $779 billion in fiscal year 2018. McConnell explained to Bloomberg that "it’s a bipartisan problem: Unwillingness to address the real drivers of the debt by doing anything to adjust those programs to the demographics of America in the future." The deficit has increased 77 percent since McConnell became majority leader in 2015.
New Treasury Department analysis on Monday revealed that corporate tax cuts had a significant impact on the deficit this year. Federal revenue rose by 0.04 percent in 2018, a nearly 100 percent decrease last year’s 1.5 percent. In fiscal year 2018, tax receipts on corporate income fell to $205 billion from $297 billion in 2017."
"Don't vote for Senator ??? because he will support the Republican agenda of cutting your benefits and kicking you out of your home!!!"Thoughts?
36 comments:
On the upside at least one GOPer is starting to think about the deficit again.
This is the old okey-doke that Republicans constantly try to pull. When you're already living paycheck to paycheck, you can't afford to take a lower-paying job. But that's what Republicans did for the country, and now are trying to solve the problem by telling Grandma she's going to have to give up her blood pressure medication.
There's just no bottom with this crew of Republicans.
It's not that Republicans aren't for great stuff. They are just in favor of other stuff more. Republicans want tax cuts a lot more than they want to shore up things people are actually entitled to.
--Hiram
Did anyone really think that after enacting the largest tax cuts in history, Republicans wouldn't try to pay for them by cuts to Social Security and Medicare? I am no big fan of logic, of course, but can anyone see how logic compels any other solution?
--Hiram
It’s disappointing but it’s not a Republican problem
So why isn't it a Republican problem? That's because the people Republicans represent are financially better off. They see themselves as less dependent on entitlements than Americans generally. While they are in some sort of vague in favor of entitlements, for Republicans it can't be at the expense of tax cuts which are their number one priority.
This is so basic to Republican thinking and the way they divide us. In the Republican world view, so many American problems are not Republicans problems. For Republicans, so many Americans just do not count.
--Hiram
Hiram,
Please provide a source for your inaccurate claim...
"the people Republicans represent are financially better off"
Because I have a source here that says differently.
Now if you were to say that "the people Republicans represent believe in learning, working and few government handouts", you may be more accurate.
I wonder when government welfare programs got renamed to entitlements?
I mean a simple change in the law could remove all of those long term liabilities. No one is entitled to all that welfare no matter what taxes they paid in the past. Social security, Medicare, SS Disability, Medicaid are just welfare programs...
"the people Republicans represent are financially better off"
that's why they are concerned about tax cuts. The tax cuts Republicans push hard don't benefit poor people that much. What benefits poor people are things like Social Security which rich people don't care much about.
--Hiram
"Federal revenue rose by 0.04 percent in 2018, a nearly 100 percent decrease last year’s 1.5 percent."
Adjusted for inflation and population growth, federal revenue per capita is down about 7% in 2018 versus 2017.
Krugman graph of FRED data
Hiram,
This is an opinion... "The tax cuts Republicans push hard don't benefit poor people that much."
The GOP reality is that most of us work for companies, and the goal is to attract more companies and jobs into the USA... While improving the capabilities of American workers, thus driving up wages.
Where as the liberal view is that somehow raising taxes, supporting dead beats, dissuading companies from moving here and handing out money with few expectations is a leads somewhere good... I personally do not think so.
Sean,
I like the response he got...
Here is the Big Picture
One can definitely see the revenue impact of the ~2001 tax cuts, the ~2012 tax increases and the 2017 tax cut...
This site has some interesting charts
"Here is the Big Picture"
Yes, revenue generally goes up, because of inflation and population growth. Thanks for that wonderful insight.
"The GOP reality is that most of us work for companies, and the goal is to attract more companies and jobs into the USA... "
Maybe they should actually pursue some policies that do that, then! Because these tax cuts are not doing that. How many times does this cycle need to be repeated?
The taxes companies pay depend a lot on how they manage them. Jared Kushner doesn't pay taxes. The argument one could make against people like me, is that the notion that tax cuts don't benefit the rich because the rich pay so little to begin with. That is in fact an argument along with it's variations that many people believe and helps to explain why they vote Republican.
One can argue about tax policy, but my point was a simpler one. Republicans want tax cuts because they benefit the people they represent. Democrats want entitlements because they benefit the people they represent.
--Hiram
Sean,
Yes revenue goes up and down for a variety of reasons, however overall revenue has stayed pretty constant relative to GDP... Which I think is a good thing. The problem as we have discussed many times. The spending has gone up relative to GDP.
Figure 5 Here is Interesting
And this one has more historical data
OK, so what?
From my perspective that would indicate that spending is the problem that needs to be resolved...
By the way, I added the graphs to the post.
The tax cuts and tariff work are a new twist... Maybe it will work this time...
It would really help if American consumers would reduce their buying foreign to save a buck...
From my perspective that would indicate that spending is the problem that needs to be resolved...
Is it spending or the things on. Maybe we need to buy less stuff.
--Hiram
"Maybe it will work this time..."
Everything that has happened since the tax cuts were passed is exactly as opponents of the bill predicted -- the deficit is way up, most of the proceeds went to the rich in the forms of buybacks and dividends, and there's been no fundamental change in overall economic performance.
We have 40 years of history that shows us that this is what happens every single time.
Hey... I was against the tax cuts and the spending increases...
And yet the politicians do as they do...
Another interesting graph
My preferences are that we take both revenue and spend to 20% of GDP until growth works down the debt as a percent of GDP.
Or better yet... Take revenue up to 20% and spend down to 19%...
The stuff Republicans want to cut is the stuff that doesn't go to their wealthy backers.
--Hiram
"And yet the politicians do as they do..."
There's only one party that consistently cuts taxes and raises spending at the same time.
The GOP folks do seem to be hopeless positive thinkers:
- tax cuts will lead to massive growth...
- massive growth will "float all boats"...
- we will make spending cuts this time...
The DEM folks are similar but different:
- tax increases will not harm the economy...
- people will improve if we give them free stuff...
- and we can offer even more free stuff if we raise taxes...
And both sides acted like a teenager with their Parent's credit card.
Hiram,
Actually I think they want to cut Federal payments to individual citizens who should have learned, worked and saved during their lives...
Instead of not learning, not getting married, having more kids than they could afford, worked less than they could have, spent more than they should, etc.
"The DEM folks are similar but different:"
No, they aren't. There's a huge difference.
GOP folks say "tax cuts will lead to massive growth". History shows this doesn't happen.
DEM folks say "tax increases will not harm the economy". History shows this proves to be true.
Pre-Cost Effective Globalization I may have agreed with you that taxes really did not matter so much... However now with jobs, companies, wealth, etc being relatively free to move around the globe at will, I think I disagree...
A country's global competitiveness and the well being of it's citizens can be impacted by many factors, one of them being tax policy. And another being people getting money for doing nothing of value for the country.
I have no problem with raising the tax rates on all individuals, however I think we want to encourage companies to come here and set up shop...
"However now with jobs, companies, wealth, etc being relatively free to move around the globe at will, I think I disagree..."
40 years of evidence versus "I think I will disagree". That pretty much sums up this blog in a nutshell.
And we want to push citizens to learn, work and contribute to our tax base... Instead of being a burden to it.
How do you know tax increases over the past 40 years did not harm the economy?
Or help to create the wealth gap?
Do you think companies only moved operations overseas for low wages and reduced regulations?
I don’t have certain answers, but I know enough to understand that attracting and keeping good jobs in one’s community and/or country is not straight forward.
And I know that costs are one of the factors.
I have no problem with raising the tax rates on all individuals, however I think we want to encourage companies to come here and set up shop...
the things taxes pay for help.
--Hiram
Hiram,
I agree that infrastructure, the rule of law, stability, etc encourage companies to move here...
I am not sure that HUGE public pensions and HUGE welfare obligations and HUGE regulatory and HUGE Defense ongoing obligations are what us investors and companies find attractive...
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