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Senate Nears Debt Ceiling Consensus Which Demands Change In CPI Definition
Politico reports that the latest development in the constantly changing and oh so theatric "struggle" to find a compromise on how to raise the debt ceiling by $2.5 trillion, is one which will not only not do anything to fix the deficit situation but will in fact set America back, as a key part of the "savings" will come precisely from the same change in the definition of inflation courtesy of the Chained CPI introduction, which the democrats previously blasted, and for good reason: because it will be an implicit theft from Social Security. Recall that the last time this was proposed the AARP started foaming in the mouth within minutes. The broad strokes of the plan are as follows: "The once moribund Senate “Gang of Six” regained new life Tuesday after Oklahoma Sen. Tom Coburn unexpectedly rejoined the group — and more senators are now coalescing around a new proposal that would cut the debt by as much as $3.7 trillion over the next decade. According to a copy of the plan, obtained by POLITICO, the group would impose a two-step legislative process that would make $500 billion worth of cuts immediately followed by a second bill to create a “fast-track process” that would propose a comprehensive bill aimed at dramatically restructuring tax and spending programs. The plan calls for changes to Social Security to move on a separate track, and establishes an elaborate procedure for considering the measures on the floor." And here is the kicker: "The $500 billion in cuts would come from a range of sources, including shifting to a new consumer price index to make cost-of-living adjustments to Social Security." Care to wager what the bulk of this $500 billion will come from: that's right - social security, whose deliverable obligations will plunge as suddenly the inflation variable in the actuarial calculation will very mysteriously be cut courtesy of Senate-endorsed theft.
More from Politico:
To enact a comprehensive deficit plan, the group calls for congressional committees to report legislation within six months that would “deliver real deficit savings in entitlement programs over 10 years,” the plan says.
It calls on the Finance Committee to permanently reform or replace Medicare’s Sustainable Growth Rate - an outdated formula aimed at determining the amount to reimburse doctors for treating Medicare patients - by $298 billion.
The Finance Committee would be instructed to deliver “real deficit savings” through simplifying the tax code and raise as much as $1 trillion. It would do this by establishing three tax brackets with rates of 8-12 percent, 14-22 percent and 23-29 percent. It would permanently repeal the $1.7 trillion Alternative Minimum Tax. And it calls for establishing a single corporate tax rate, between 23 percent and 29 percent, and to move to a competitive territorial tax system.
Overall, the group claims it would result in a $1.5 trillion net tax decrease.
The group punts many of the specifics to other committees, which would be asked to find savings in discretionary and mandatory spending. This includes: $80 billion out of Armed Services; $70 billion out of Health, Education, Labor and Pensions; $65 billion out of Homeland Security and Government Affairs; $11 billion out of Agriculture; $11 billion out of Commerce; $6 billion out of Energy and Natural Resources. The Judiciary Committee would be asked to find savings through medical malpractice reform.
Who is pushing the Chained CPI bill?
Senators in the Gang of Six - Kent Conrad (D-N.D.), Dick Durbin (D-Ill.), Mark Warner (D-Va.), Mike Crapo (R-Idaho) and Coburn - discussed the proposal with 43 senators Tuesday morning on the first floor of the Senate, after more than six months of struggling to broker a deal.
And here are the next steps in the theater:
If any committee cannot propose cuts, it would would impose “across-the-board” cuts to programs under the panel’s jurisdiction. It would exempt programs aimed at low-income communities.
To avoid gridlock, floor amendments that upset the deficit-reduction goals would be ruled out of order. Any bill that could receive 60 votes would be held at the desk until the Senate considers the separate Social Security bill.
Once a comprehensive deficit plan has the votes, a measure aimed at ensuring 75-years of solvency of Social Security would head to the floor. The Finance Committee would be required to recommend the Social Security changes.
Bottom line: our initial prediction that absolutely nothing will change now appears been optimistic, as the net result will be a far worse outcome, one which effectively changes the rules vis-a-vis inflation tracking, making stealth devaluation a core premise of this and any other future "deficit reductions."
Once again, middle-class America is about to be raped by its own "representatives" while the banking oligarchy flourishes.
Congratulations.
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Exactly. AKA the non-elite finance community cheers for the carcass to be delivered to them so they can strip the bones before the curtain falls.
Obama doesn't agree to the cuts and it doesn't have a balanced budget amendment, so it's dead in the House of Representatives. D.O.A.
damm you professional politicans!!!(waving fist in air)
Mr Market luvs it.... fukin' rally ho!
Wash DC salaries should only be paid out from budget surpluses, bottom line.
A top marginal tax of 29%? A flat tax with capital gains on the block? How do you go from 35% to 29% without it?
getting rid of the AMT is a good idea.
Pushing on Strings (Squared)
It won't matter. There are 10,0000 Boomer retiring everyday, which are no longer paying into the system, but withdrawing from it. Even Freezing payment increases won't matter, as the real problem is the growing number of retirees collecting entitlements.
AGuy,
NO...........that's the EFFECT.
The CAUSE is theft of funds,thank you LBJ.
When this sorry Ckskr allowed the SS Trust Funds to be put into the General Fund, is when the SHTF.
Before most of you were born.I see no way to resolve this without a NEW Gv't structure,(meaning a damned gopod HOUSE cleaning) TOP to Bottom, and mass trials, and hangings/life imprisonment fopr Politicians.
OR there will be a Civil War.
AGuy,
NO...........that's the EFFECT.
The CAUSE is theft of funds,thank you LBJ.
When this sorry Ckskr allowed the SS Trust Funds to be put into the General Fund, is when the SHTF.
Before most of you were born.I see no way to resolve this without a NEW Gv't structure,(meaning a damned gopod HOUSE cleaning) TOP to Bottom, and mass trials, and hangings/life imprisonment fopr Politicians.
OR there will be a Civil War.
AGuy,
NO...........that's the EFFECT.
The CAUSE is theft of funds,thank you LBJ.
When this sorry Ckskr allowed the SS Trust Funds to be put into the General Fund, is when the SHTF.
Before most of you were born.I see no way to resolve this without a NEW Gv't structure,(meaning a damned good HOUSE cleaning) TOP to Bottom, and mass trials, and hangings/life imprisonment for Politicians.
OR there will be a Civil War.
No way to fix it all!
Heres how I currently expect this to pan out:
1. Fed prints money to pay for entitlments since Congress will not permit major entitlement cuts or raise tax rate (to 90% of income to pay for entitlements)
2. Dollar devalues to the point it becomes nearly worthless.
3. States print there own currencies in order to trade with overseas (oil imports for example).
4. Federal gov't is basically made powerless. US breaks up into regional nations (ie New England as one nation, NY,NJ,PA,MD another nation, etc.
This is based upon what has happened in the past for former first world nations, Rome, Holy Roman empire, Ottoman Empire, England, and most recently the Soviet Union. Once a nations finances collapse, the nation collapses and breaks up into smaller nations.
10-1, private sector will fail before the government sector in US.
The betting event already occurred... the private sector as taken a bath while the government sector is largely untouched... obviously the tides are turning, but the government employees are putting up a helluva fight as compared to their private counterparts...
what a surprise...another okie-doke this way comes...
So even if the ludicrously rosy predictions of this "proposal" come to fruition you're still talking about roughly doubling the national debt over the next 10-years. Right?
Evidently the Baskster Squid thinks there's still some meat left on the rancid carcas that is the US economy.
Damned be the DCriminal motherfuckers!
A foot becomes 10 inches when you change the way it is measured.
Lets see all those stoner Baby Boomers who let Government run fucking wild and bankers run wild.. lets see them get up and do something other than talk about how much it must hurt someone else to be raped!
Lets see these peace love and weed old fucks get off their fat lazy asses and do something other than have a sit in..
Lets see these fucking Hippies Care, not about future generations! but their money!
It could not have happened to a more useless fucking demo graphic! good for them!
JW,
Only a very "tiny" portion of that( my) generation did that shit.
To broad stroke brush ALL in that age group is ignorant on your part.
Also, I am not fat,nor lazy........put in 35+ yrs at the gristmill of work.(And no I do not have to have SS to live on, I retired at 54yrs old,not from sitting on my so called fat ass.
The Woodstock bunch is what just left under Clinton's regime,some vestiges are still there, and dug in like an Alabama tick.
I paid my dues, many times over.
And before you make some dumb ass remarks like you did,think(maybe an alien concept to you) sucks the big one.
"Think" before you type,it might help.
Do not lump all Boomers into selfish SOB's,we have given more to charity,the poor, and indigent, and the world, than likely any generation before us.
Remember, we were brought up still under a Constitutional Republic, and had parents that taught us, and schools that did also, what it meant to be a real American.
What we have for leaders now, could not carry my boots.
The senators are out to steal from us through shifty economic trickery? How Ferengi.
So they default on the debt and then turn the big guns outward and tell anyone who wants to come get the money to take a number. You go full protectionist and actually bring back some manufacturing and industry because nobody will sell to you anymore.
It all seems fairly easy ... except where do you get oil? The Canadians can pump us 2-3 mbpd, but what about the other 22 mbpd? 5 mbpd domestic?
So they default on the debt and then turn the big guns outward and tell anyone who wants to come get the money to take a number. You go full protectionist and actually bring back some manufacturing and industry because nobody will sell to you anymore.
It all seems fairly easy ... except where do you get oil? The Canadians can pump us 2-3 mbpd, but what about the other 22 mbpd? 5 mbpd domestic?
Well,the paper chasers bought it..................knocked the PM's on their ass..........
All our problems are SOLVED!!!!!!!!!!!!
Glory Hallelujah!
Stupid Servers........do any here hate Windows 7?
More points to consider:
COLA and COLA adjustments affect all government levels, local, state, and federal, and affect virtually all of the private sector as well.
A) Anyone whose earnings or pensions are tied to COLA (both public and private workers) will be denied pay increases.
B) Inasmuch as anyone's income rises, they will experience tax bracket creep. The brackets will purportedly not need to be adjusted because there will be no official inflation.
C) Federal cutbacks likely push the costs to local governments. Any who are pushed into poverty because of federal cutbacks or freezing of pensions, disability payments, food stamps, medical coverage, etc. will likely add to the burdens of their respective local government. (And yes, there are many elderly, disabled, children, and others legitimately receiving federal benefit payments).
rwe,
Pls, your correct.
But, do not leave out the illegals who have GAMED this system, and have been paid billions out of our SSI/MC/MA trust funds.
Can't blame them,the left (socialistas) run the programs and dole it out.
the measure of CPI should be turned over to a non-governmental agency, and the UST should place SSN trust fund money in 30 year TIPs. Those funds should invested as real dollars, and real dollars should be indexed against investment dollars. Real economic growth would result in a lower ratio, phony or monetary or credit gorwth would result in a higher ratio. A higher ratio would mean fewer dollars at term, and would cause a deficit in the Treasuries books. A lower ratio would mean a surplus.
Excuse me, where is there money in today's SSN trust fund?
It is full of non-marketable bonds, i.e. unbacked promises that money can be raised, through selling real treasuries to real people, or through tax revenues, sometime in the future.
the money is currently an intangible, but placing the money in a trust fund, 30 yr TIPs would make it tangible. Then forget CPI, index the contribution, in real dollars to investment dollars. The rate of inflation through credit is much higher than inflation through the printing of real dollars, and the Fed really has no way to get those real dollars into the economy, short of people demanding payment for their paper. The Fed would be much less willing to control the economy by printing hard cash, economists fail to make this distinction. Denominate SSN in real cash, and as one and done if necessary, simply print the money, and then buy 30yr TIPs. It would be inflationary yes, but if you buy TIPs the inflation is offset, and it doesn't go into the general economy anyway. And you think My God the Fed is sitting on trillions in cash, yes, and when they need to put new money in the economy, or toss it out of helicopters, which is a fallacy, they have to work through this stock before they can do their little inflation dance. in other terms the SSN recipients are taken care of first, we preprint their money, and issue them 30Yr TIPs, to offset the inflationary effect, instead of pouring credit money into the banks, whic is the current stupid solution. Take care of the people that's who the currency is made to serve.
You sound like a (soon to be) retiree: let's make sure I get mine!
Reminds me of a saying I read about the struggle in Madison, Wisconsin: "They are fighting over money that doesn't exist."
You cannot legally enforce what is economically impossible. The state and gov't workers with their guaranteed pensions will soon discover that too.
By the way TIPS are "inflation-protected" such that they are linked to the CPI, and we are just watching the latest show on that.
I wonder if the change in the CPI will apply to federal income tax brackets as well. If so, then inflation is cleared for take off.
BUY.GOLD.NOW
I understand all registered holders of physical gold would be sent a schedule K at the end of the year. On a schedule K you pay the gain or loss in market value each year.
As long as the people take it they get screwed even more. They get exponentially screwed and the elite get’s exponentially hubres.
RECAP: Obama Scam: Obama and lawmakers are considering cutting Social Security and increasing revenue by changing the way the government measures inflation
Same could happen in the US policestate: Argentina: Criminal Offense To Report The Rate Of Inflation
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