Older Americans don’t want benefits slashed — and they vote
Shutterstock.comWall Street has been betting that Donald Trump will get his big tax cut plan through Congress — which would be supposedly good for stocks and the people who own them.
But those tax cuts were always a long shot — even before the health-care debacle.
The political pundits can jawbone all they want. But the logic is painfully simple:
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1. Even with tax rates as they are, the U.S. budget is heavily in deficit and the national debt is predicted to keep spiraling upwards — as the Congressional Budget Office has confirmed.
2. Tax cuts will increase that deficit still further. (No, tax cuts do not “pay for themselves,” unless maybe you are cutting them from those ridiculous 70%-90% levels seen after World War II. Cutting taxes today might in theory stimulate enough extra growth to clawback some of their cost, but they will not generate a net gain.
3. Republicans cannot credibly push a plan that increases the deficits, because most of them — including Donald Trump — ran on a platform of saying the deficit, and the spiraling national debt, is a disaster.
4. Therefore, if Republicans want to pass the tax cuts, they will need to cut federal spending.
5. Trump is already pushing to raise spending on defense and infrastructure, making the challenge even greater.
It is impossible to cut spending overall without cutting Social Security and Medicare as well as Medicaid.
6. Mathematically, it is impossible to cut spending overall without cutting Social Security and Medicare as well as Medicaid. Along with debt interest, which cannot be cut, they already take up 58% of the budget and that figure is rising. Throw in defense and veterans and we’re talking about 77% of the budget now, and an estimated 83% in 10 years.
To put it another way, in 10 years’ time those three social programs, along with debt interest, defense, and veterans are projected to consume more than 100% of federal tax revenues. They’ll put the budget in deficit even if Congress eliminates all other programs.
7. Congress might in theory find some efficiency savings in Medicare and Medicaid. But the biggest ticket item is Social Security, and it just consists of checks sent to grandma. There is no way to cut Social Security without slicing into those checks. There is no mystery X-factor to eliminate and only hurt “bureaucrats.”
8. Any cutbacks would risk producing serious hardship for the elderly. We have a retirement crisis in this country. Few people have adequate savings for a life after age 65 that may last 30 years. Only a third of those in work today say they’ve saved over $100,000, and a quarter have less than $1,000. America’s retirees will continue to depend on Social Security and Medicare — and Medicaid in many cases — just to live. Meaningful cuts just aren’t credible.
9. Older people vote. They vote more than the young. Everyone in Congress knows this all too well.
10. Furthermore, there is no political majority in America — none — for cutting Social Security or Medicare, least of all to pay for tax cuts.
Instead, a succession of opinion polls conducted in recent years shows that majorities favor raising taxes over cutting back on entitlements. Other polls have found that only a third of the public supported scaling back Social Security benefits to deal with the budget deficit. Many more, well over 50%, preferred raising taxes instead. And those who felt strongly about defending benefits outnumbered those who felt strongly in favor of cuts by two to one.
Anyone who opposes cutting Social Security to control the deficit isn’t likely to favor slashing Social Security to pay for tax cuts. Some 61% told Gallup last year that the rich paid too little tax, including 46% of self-styled “conservatives.” Moreover, 67%, of the general public thought corporations paid too little tax.
Logically, therefore, Donald Trump can expect to get his tax cuts passed only if the Republicans in Congress agree to raise the deficit still further, or cut Social Security and Medicare.
Good luck with that.
Spot the condradiction in #2. He is in effect saying that raising taxes could be more of a stimulant.
Good catch, Mark. He is indeed a got dang genius. Why didn’t I think of raising taxes as a stimulus?
Workers and Employers are paying big bucks for Social Security and Medicare Insurance for when they become Seniors; and literally being mugged to pay for the vast and generous Web of Welfare Handouts to the FSA. Our Insurance should not be cut unless the Welfare Handouts (including Medicaid) are cut even more.
“Mathematically, it is impossible to cut spending overall without cutting Social Security and Medicare as well as Medicaid.”
Why?
And why is SS Mecicare, and Medicaid the only thing anti tax cut people seem to mention when talking about tax cuts when things like AFDC, Planned Parenthood and other such programs, healthcare subsidies for the non productive class under Obamacare, NEA, PBS, an excessive number of low productivity Federal workers and the non essential programs that employ them, and on and on and on are never even mentioned?
I’ll start paying attention to them and their arguments when they tell the truth and start mentioning, say, something like “without cutting useless EPA regulations, Planned Parenthood, alternative energy subsidies, and even PBS” instead of the already paid for by its recipients programs of SS, Medicare and such.
As far as SS goes if they would just eliminate the cap on earnings, the program could probably remain solvent for years. And someone please tell me why we have to spend so much on the military? I thought his platform was no more regime change? I don’t mind spending on infrastructure but I really don’t think we need to pay for more $150 toilet seats.
plus the bloated Pentagon budget
Actually they could eliminate the whole deficit by removing the undocumented. They could double or triple the tax base by getting rid of “affirmative racism” and get companies to hire Whites.
But they won’t. They’ll ride this plane all the way to the ground.
“There is no mystery X-factor to eliminate and only hurt “bureaucrats.””
Really? Not even firing a million or so of them? I’m no award winning financial journalist, so maybe I can be excused for not being able to see what he means.
Every time the gubermint uses terms like ” REFORM ” or ” MODERNIZATION ” or ” AFFORDABILITY ” the middle class gets it in the arse good and hard. That’s been common knowledge for at least 3 decades.
Only two things can fix this mess and it’s not about taxes: ” COLLAPSE ” and ” RESET ” !! …. nature’s cure for excess and corruption that should have taken place in 2008. Absent this overdue purge, the debt super-cycle predictably grows bigger and more dangerous each passing day.
Politicians will chew off their left arms before they voluntarily start cutting into voter’s benefits, no matter how rational the reasoning might be. Tinkering with the tax code is just one segment of the problem in a country with a very serious borrowing and spending problem mixed with a stagnating economic future. I like simplicity in all things, but fixing a gargantuan debt problem is no simple matter. People need to come to the realization that obscene levels of debt-fueled growth is not a good thing for the longer term health of any society.
C and R … sadly, it looks to be the only feasible solution.
Another of the favorite terms of late is “common sense changes” when in reality anyone with any common sense would not present them.
DING DING DING…..we have a winner. The ONLY solution is collapse. Why? I will just take one scam – the medical insurance scam. This scam is employing a big part of the middle class (if there is still such a thing) and even though most deplorables in theory want to end all the crap, in reality, if they hear that their job would be eliminated, which would happen if just this ONE scam was fixed, then they would howl to the moon.
Why is collapse the ONLY answer, because NO ONE can be objective when their paycheck depends on looking the other way….If you took out all of the grift and scams in today’s America, you would probably have 50% unemployment. No joke….
Lets get on with the carnage.
The author offers no insightful evidence to support any of his claims, nor looks to analyze potentialities beyond the very surface thoughts of how he wants his information to be understood.
Given the debacle that we have been in over the past couple decades, when was the last time we actually saw any kind of a “tax cut” to give any kind of data comparison?
When several states went to a no income tax platform people were screaming how they would all fail too, but in truth the areas failing are most often blue run and poorly negotiated pension contracts for gov workers, aside form that there have been some successes.
If dealing in econometrics and outcomes from decisions and the effects they will have overall, more research has to be done than simply copying anothers “research” that was most likely a paper done on someone else’s research.
Point is that in cutting taxes in the right places combined with changing trade and monetary policies, as well as trimming the fat in government spending, could produce an environment in which a jump started economy (which has happened in the past) would produce significant net gains on the books and stabilize the debt. As long as there isnt a huge dip in the standard of living most folks will hardly notice and that is the key.
A couple of things.
Medicaid mostly goes to nursing home care for grandma.
For those of you who own or manage a business,if you had to choose just one,which would it be,a tax cut or a massive cut in regulations along with a commitment of minimal interference?
Eliminating regulations is my choice.
Shouldn’t this article be in the Atlantic or the SPLC journal? I’m sure the Times or Post would gladly post this kind of thing.
I haven’t read anything this funny since Grubber exlained how Obamacare would benefit us all.
Cuts of any sort won’t do a thing. It’s economic game over. Ifvthe ballooning debt doesn’t come first, the technology wiping out the tax base will. I’m guessing we’ll never see a universal basic income here like everyone else is looking to implement. We’ll just have starvation and killing in the streets. A regular Green Soylent scenario. Good times ahead!