USuncutMN says: Tax the corporations! Tax the rich! Stop the cuts, fight for social justice for all. Standing in solidarity with http://www.usuncut.org/ and other Uncutters worldwide. FIGHT for a Foreclosure Moratorium! Foreclosure = homelessness. Resist the American Legislative Exchange Council, Grover Norquist and Citizen's United. #Austerity for the wheeler dealers, NOT the people.

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Sunday, July 31, 2011

Congressman Raul Grijalva : Latest News : Progressive Co-Chair Rep. Raúl M. Grijalva Statement on Emerging Debt Deal

Cenk (rah) lashes out at GREEDSOS !!

Matti Taibbi has a new article in Rolling Stone that explains how both Democrats and Republicans would like to include a so-called 'tax holiday' in any budget deal so that corporations can repatriate their overseas profits in the United States without penalty (i.e. not pay taxes). Cenk Uygur and Ben Mankiewicz discuss.

Read the article here:http://www.rollingstone.com/politics/blogs/taibblog/holiday-in-scambodia-2011...

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News & Politics

Senate ‘very close’ to debt deal: McConnell - MarketWatch

Saturday, July 30, 2011

Hawk Nation: A Guide to the Catastrophic Debt Ceiling Debate

http://www.newdeal20.org/2011/07/11/hawk-nation-a-guide-to-the-catastrophic-debt-ceiling-debate-51211/

Monday, 07/11/2011 - 2:13 pm by James K. Galbraith | 47 Comments

President Obama’s proposed debt ceiling deal is a disastrous solution to an imaginary fiscal crisis, but the pain it causes will be all too real.

News reports hold that President Obama scored a political victory by agreeing to put Medicare and Social Security on the chopping block to achieve a “go-big” $4 trillion deficit reduction. Speaker Boehner had to concede that Republicans won’t vote for any package that includes tax increases – and the deal died. So the gambit worked and the President emerged with a solid image as the alpha deficit hawk.

To which one can only say: how nice for him.

We’re in a summer that only Salvador Dali could paint, a reality so twisted that one almost yearns for the simple verities of the War on Terror or even the invasion of Iraq. Then as now, to be serious one must be a “hawk.” (The dove is a weakling, a loser, and the owl for practical purposes does not exist.) So let’s review some of the strange and mysterious faces of this ugly, vicious bird.

The debt ceiling was first enacted in 1917. Why? The date tells all: we were about to enter the Great War. To fund that effort, the Wilson government needed to issue Liberty Bonds. This was controversial, and the debt ceiling was cover, passed to reassure the rubes that Congress would be “responsible” even while the country went to war. It was, from the beginning, an exercise in bad faith and has remained so every single second to the present day.

Today this bad-faith law is pressed to its absurd extreme, to force massive cuts in public programs as the price of not-reneging on the public debts of the United States. Never mind that to force default on the public obligations of the United States is plainly unconstitutional. Section 4 of the 14th amendment says in simple language that public debts, once duly authorized by law and including pensions, by the way, “shall not be questioned.” The purpose of this language was to foreclose, to put beyond politics, any possibility that the Union would renege on debts and pensions and bounties incurred to win the Civil War. But the application is very general and the courts have ruled that the principle extends to the present day.

What is going on in Congress at this moment already violates that mandate. It is an effort to subvert the authority of the government to meet and therefore to incur obligations of every possible stripe. It is an attack on the concept of government itself – as the “Tea Party” by its very name would no doubt agree. It therefore paints those deficit hawks who are using the debt ceiling to take budget hostages as enemies of the United States Constitution.

The President, though supposedly a constitutional expert and though sworn to “preserve, protect and defend” the Constitution, will not say this. Instead he appears to treat the Constitution as an optional matter, to which he will not resort, in the hope that by negotiating with the hostage- takers he can reach some reasonable outcome that will preserve everyone’s good name. (The great Harvard legal scholar Laurence Tribe recently argued that the President cannot defy the debt ceiling on his own. That’s a debatable point.) It is as though Lincoln in 1861 faced with the siege of Sumter had sat down with Confederate commissioners to see what could be worked out.

Daily Kos: $22 trillion Social Security surplus revealed on C-SPAN

byDeep Harm Follow

When Peter Coy, the Bloomberg Businessweek Economics Editor, appeared this morning on "Washington Journal," he brought along a chart for his discussion of the magazine's cover article, "Why the Debt Crisis is Even Worse Than You Think." But, the chart, purported to show a national fiscal gap, did not match Coy's talking points. As Coy concluded commenting that cuts would be needed to Social Security and other entitlements, C-SPAN moderator Susan Swain pointed out that Coy's chart showed a long-term surplus for Social Security of $22 trillion. Coy confirmed as accurate her interpretation of the chart and, after some stumbling, admitted that, "The trust fund is not the crucial issue." Indeed, his own figures show that it is not an issue at all. So, why did he continue to insist that Social Security cuts are needed?

To watch the interview, go to the video and fast-forward to the 28 minute mark. Discussion of the Social Security surplus occurs around the 30 minutes mark.

Following is my transcript of the interview. (Note: I've highlighted in bold the discussion of the Social Security surplus.)

SWAIN: Let me turn from that to the thesis of your cover story, which is "Why the Debt Crisis is Even Worse Than You Think." It's accompanied by this chart or graphic which I'd like to put on the screen which is the debt deluge in which you show what everyone is talking about and what everyone should be talking about which is the fiscal gap what's this all about
COY: Fiscal gap is a different way of measuring out problems Everyone focuses on the national debt..which of course is important to focus on but, the national debt is backward looking it tells you what's obligations have already accumulated
What it doesn't tell you fully is the debt to come..or the obligations we are incurring now based on the way we've created formulas for social security, medicare and medicaid. If you look at those and you go out into the indefinite future.to make sure that there's not some kind of accounting problem on the distant horizon..you find that the gap...between everything we expect to receive --tax revenue-- and everything we expect to spend is $211 trillion ...trillion dollars...stated in today's dollars
SWAIN: So, what does Washington do with that?
COY: Well, what you do is what people have been talking about doing. You've got to tackle the entitlements because that's by far the bulk of the problem. Entitlements of course being social security and medicare. You also have to tackle medicaid. You also have to deal with the outlying years. You have to create formulas that will be sustainable. And you have to figure out how to something about with healthcare costs which are rising at a rate that's unsustainable, presumably by changing the incentives. This has been said on C-Span and elsehwere but it's not just talk it's like the economists that look at the longterm future say if that doesn't happen things just kind of blow up. Even 212 trillion wouldn't be enough.
SWAIN: Well one thing just to note..as you're saying Social Security is part of the solution....In this illustration you have here...social security...taxes... let's see.one side is revenue and one side is debt. It shows social security in a surplus. Right. 132 in what is receives versus 110 trillion? Am I reading that correctly? [Coy responds, "Yeah."] So, people who social security be set aside we've paid into it it's really solvent for right now. Why should that be part of the discussion?
[Transcriber's note: The left side of the chart (debt) reads, "Social Security $110 tn." The right side (receipts) reads "Social Security taxes $132 tn."]
COY: That 's a good point. The social security numbers...the trust fund is not the crucial issue. That's why people say that medicare is where the bigger problem...but, social security...um...[is] probably going to have to have a higher...um...retirement age..but, you know...funny thing...I think that's a good point you're making there. I'm going to go back and look at that more closely for next week's story.
SWAIN: Well, thank you very much for outlining the concerns of the financial market, which you say right now are more muted than you expected, and for giving us some background on your cover story, "Why the Debt Crisis is Even Worse Than You Think," as Washington continues to find a solution for the debt ceiling. Peter Coy, joining us for Bloomberg Business Week, thanks for your time.
[end of interview]

Of course, next week will likely be too late for Peter Coy's re-evaluation of the fiscal gap data to have any impact on the Congressional debate that proposes to make Social Security cuts by Tuesday...unless, Americans hurry to point this out to Congress ourselves.

If Bloomberg's analysis of the "fiscal gap" is correct, any cuts to Social Security benefits will simply increase the already projected surplus of $22 trillion. That surplus is highly vulnerable in a "debt crisis" to being purloined to cover the $212 trillion gap resulting from other government expenditures. That would make Social Security, at least in part, a regressive tax program for general expenditures, because lower income workers pay a higher rate than those with high incomes.

The content of Bloomberg Businessweek's cover article goes beyond coming to an erroneous conclusion, as it does here.

[C]uts in benefit formulas for Medicare and Social Security are painful but necessary. And they should apply at least in part to current beneficiaries. Given how hard-pressed young workers are, it’s unfair to put all the adjustment on them while completely insulating today’s elderly.

Bloomberg engages in unseemly fear mongering about the fiscal clout of the nation's elderly, described in the article as "the gray deluge."

The U.S. is in danger of reaching a generational tipping point at which older Americans have the clout to vote themselves benefits that sap the strength of the younger generation—benefits that can never be repeated. Kotlikoff argues that we may have reached that point already. He worries that the U.S. could become Argentina, which went from one of the world’s richest to lower-middle income in a century of chronic mismanagement.
Senior citizens are being told by their own lobbyists, repeatedly, that any attempt to rein in the cost of Social Security and Medicare is an unjust attack on earned benefits. “Stop the liberals from raiding the Social Security Trust Fund once and for all!” says a recent mailing from the National Retirement Security Task Force. Similar messages aimed at Democratic voters make the same charge against Republicans. No wonder Obama and Boehner were rebuffed by their own parties for putting entitlements on the table. In the end neither the House nor the Senate debt-ceiling proposals touched Social Security or Medicare. Not pretty.

Pitting young people against their grandparents would be distasteful in any case, but to do so based on information that, in fact, argues the opposite is despicable. Thank goodness for C-SPAN and its eagle-eyed journalist Susan Swain.

How a flush country could be in debt trouble

View Photo Gallery — The U.S. national debt has climbed to a stunning $14.3 trillion. Who are our biggest creditors, according to recent data from the U.S. Treasury?

By Zachary A. Goldfarb, Published: July 29

The United States isn’t broke. The government collects $2 trillion in tax revenue a year and has been able to borrow even more at very low interest rates.

Beyond government, U.S. companies led by giants such as Apple and General Electric have saved nearly $2 trillion at home and $1 trillion more overseas. U.S. banks have up to $2 trillion available to lend.

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Graphic

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After rejecting a GOP bill passed by the House, Senate Democrats pursue their own plan to avert a government default in a messy legislative showdown.

Can a giant platinum coin save our credit?

Read story

Yet the U.S. government confronts a debt crisis, and fears are mounting about a possible default. How could this be?

The answer comes down to politics and math.

While the U.S. government’s $14.3 trillion debt is an eye-popping figure, the country has plenty of resources. It’s just that over many years Americans and their leaders have chosen not to tap them to pay the government’s growing bills.

So the United States could be deemed an international deadbeat for a debt load that it has the financial wherewithal to pay off.

Consider the government’s debt. Almost half, or $6 trillion, is money the government doesn’t owe anyone but itself, for instance to the Federal Reserve or Social Security. An additional $3.9 trillion is owed to U.S. investors, investment funds and companies.

So what does the government owe to the rest of the world?

It’s about $4.4 trillion. But when the government, U.S. businesses and individuals are taken together, the country as a whole owes the rest of the world only a far more modest $2.5 trillion on balance. That’s because of the trillions of dollars that Americans have invested abroad in foreign companies, gold and other assets, offsetting much of the debt.

As a share of the country’s total wealth — or of what Americans produce every year — the country’s debt to the world is small. And it has remained fairly constant over the past decade.

The United States is a lot like a rich businessman who owns two homes, a yacht and millions of dollars in stock but is in debt because he took out a big loan to buy a private plane.

This fellow could always have used some of his wealth, for instance his stock, to pay cash for the plane. But he didn’t want to. Now, with the weak economy, he’s finding it hard to pay off the plane simply out of his salary. By putting most of his wealth beyond reach, he has boxed himself in.

Likewise, U.S. politicians have made a value judgment that they shouldn’t tap much of the country’s wealth to pay for government programs. That judgment, in turn, reflects the preference that many Americans themselves have expressed over the years for leaving private resources in mostly private hands.

Political leaders have actually reduced taxes — personal and corporate — to some of their lowest levels in generations and carved out a series of loopholes and policies that allow American companies and individuals to save money. And some of this money ends up leaving the country altogether.

The government, for instance, has encouraged savings in tax-shielded retirement accounts, which in part are invested abroad.

Corporations, likewise, have enjoyed preferential tax treatment through a range of loopholes and breaks that allow many large U.S. companies to pay far below the 35 percent corporate tax rate. Again, some of these corporate savings end up invested overseas.

Money generated by companies abroad isn’t taxed until it is returned to the United States — which companies are loath to do.

Frank Warnock, a professor at the Darden School of Business at the University of Virginia, said the government decided to make major expenditures — such as two wars — without coming up with the money to pay for them.

But while the country is flush with assets, it doesn’t mean the government can seize them to pay for public debt. “I don’t think you can say there are buckets of money and let’s grab it,” Warnock said.

The United States finds itself in a very different situation from Greece, Portugal and other European countries that are struggling with debt and trying to avoid default. These Europeans have far less wiggle room, owing the vast majority of their debts abroad while owning relatively few assets.

What’s more, these countries have poorer prospects for economic growth. They are being charged interest rates to borrow money that one might expect at a payday lender. And they are locked into a single currency — the euro — which deprives them of a crucial tool: devaluing your currency to make your products cheaper and more attractive to customers in other countries.

The U.S. economic picture is not that rosy either. But economists still expect growth to pick up over the coming years, which will boost tax revenue and make it easier for the nation to afford its obligations. U.S. companies remain competitive, and if firms put their cash to work, it could fuel growth even more.

And if politicians could come to an agreement over government finances, most economists say the U.S. government could bring its debt to heel.

http://www.washingtonpost.com/business/economy/how-a-flush-country-could-be-in-debt-trouble/2011/07/27/gIQAIXPAiI_story.html

Social Security and the Deficit (ALSO SEE LINK - FACTCHECK)

Social Security and the Deficit
http://factcheck.org/2011/07/debt-limit-debate-round-up/
Democratic Rep. Xavier Becerra of California said that he would "fight to take [Social Security] off the table" in budget negotiations, because it "hasn't contributed 1 cent to the deficit that we face today, nor 1 cent to any of the national debt, the $14.3 trillion." We take no position on whether Social Security should be cut, but it's wrong to say it's not contributing to the deficit.
Social Security benefits paid were more than payroll taxes in 2010, leading to a cash deficit of $49 billion. For 2011, the Social Security and Medicare Boards of Trustees project a $46 billion deficit. And those figures don't include the billions more the government will have to borrow to cover that reduction in payroll taxes that was in last year's deal to extend the Bush tax cuts.
Twists and Turns on the Debt July 12

ACTION MPLS Juy 23rd versus Tax dodger, union busting FEDEX

State budget ‘deal’ not a deal for people with disabilities

http://www.leadershipandcommunity.com/2011/07/28/state-budget-%E2%80%98deal%E2%80%99-not-a-deal-for-people-with-disabilities/

SUE WARNER

– JULY 28, 2011POSTED IN: COMMUNITY

The following analysis of the State of Minnesota budget compromise was originally produced by Courage Center’s Public Affairs and Research Department. It gives a good summary of how the state budget deal impacts people with disabilities in general, and Courage Center clients in particular. This edited version is posted with permission:

What was in the final deal?

The approved state budget spends more in the next two years than the state did in the last two years, but significantly less than the projected growth of programs. That’s why both sides in this budget fight could claim victory: spending is growing, but there are big cuts in what would have been spent had changes not been made. The approved Health and Human Services budget for the biennium is $11.3 billion. This is a billion dollars more than the last biennium we just finished (at $10.2 billion), but also a billion less than DHS had projected would have been needed to provide the same level of services to a growing population. In this respect, people with disabilities and the organizations that serve them, including Courage Center, were hit hard.

So if the final budget agreement spends more, where did the revenue come from?

The added spending over the last biennium was funded solely through borrowed funds, not permanent increases in the revenues coming in to the state budget. Shifting school payments and borrowing money from future tobacco bonds brought in an extra $1.4 billion to prevent deeper spending reductions.

Does this framework build a foundation for future stability?

Unfortunately, the fundamental cost drivers – primarily health spending – were not addressed head on. Unless the state and national economic outlook brightens beyond the expectations of most experts, this deficit scenario will repeat itself in 18-24 months. The core issue – not enough funding for service levels either needed or provided – remains.

What are the immediate impacts of the budget agreement for Courage Center?

The biggest impacts affect our payments for people on Medical Assistance (MA):

– For physician services and therapies, rates will drop 3%;
– For community-based services like Independent Living Skills and Behavior Services, payments will shrink by 1.5%;
– Daily per diem payments for inpatient care in our Transitional Rehabilitation Program (TRP) are not cut, but other payments made to TRP will decline;
– Payments for any services provided to complex clients who have Medicare and MA coverage will drop significantly;
– While most rehab services (PT, OT, speech) were preserved, specialized maintenance therapy for adults was eliminated;
– Additional prior authorization requirements will be required before most rehab therapies can begin;
– Despite being passed by the state House and Senate earlier this year, a change sought by Courage Center to give us more flexibility to manage our MA population was not included in the final deal.

Are reform and policy changes addressed in this deal?

Both the Governor and legislature want significant health reform, and will be seeking permission from the federal government to adjust the way health care works in Minnesota. The good news is that Courage Center is very much on the forefront with our Primary Care Clinic (a health care home), supported by our strong measurement and data efforts perfectly positioned to capitalize on the reforms below:

– Assessing the needs of people with disabilities more often to better target (and limit) services;
– Pay specialists and hospitals less and primary care providers more;
– Focus on time-limited, low-cost services to avoid more expensive long-term care services; and
– Pay more to providers who achieve better health for their clients, and pay less to those who don’t.

What other changes will impact the disability community?

A big change will see people with disabilities automatically enrolled in managed care plans unless they “opt out.” This is a very big policy change. Other cuts that will affect Courage Center clients include:

– Co-payments for drugs and medical services will be higher;
– Less access to personal care attendant (PCA) services for those with mental health conditions.

What will the future bring?

The end of the longest shutdown in state history and the conclusion to the 2011 legislative session brings some relief, and will mean many things return to business as usual. However, we have difficult work ahead to provide our clients with the services they need while balancing our own organization’s budget in a continuously challenging economic environment.

US Uncut Minnesota

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