Taxing Health Insurance and Mortgages, Cutting SS/Medicare And Other Plans For Political Hara-Kiri

The latest Senate Gang wants to cut Social Security and Medicare, and eliminate the mortgage interest deduction. Matt Yglesias is keen to increase the tax on health insurance.

Tim Geithner is thrilled about this kind of talk:

Mr. Geithner said “[. . . I]f you listen carefully now, you see the leadership of the United States of America, the president, the Republican leadership in both houses and the Democrats recognizing now that [. . .] we have to put in place now reforms that bring down our long-term deficits in ways that’ll help strengthen future growth. And that’s incredibly important recognition by people and we’d like to put something in place as soon as we can so we can begin that process.”

Funny, Mr. Geithner was not that concerned about deficits when he was touting tax cuts for the rich when The Deal was passed in December. The gamble by the Obama Administration, spearheaded by Mr. Geithner, is that the economy will be in good shape in 2012, so promises of long term reductions won't affect the President's reelection chances. That seems delusional to me. Time will tell.

Speaking for me only

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    Kiss the building (5.00 / 0) (#4)
    by Ga6thDem on Tue Apr 19, 2011 at 12:19:08 PM EST
    industry bye-bye too. Wow, I'm amazed that anyone would make suggestions this incredibly stupid.

    Talk about giving the GOP a chance to wipe the electoral map with Obama too.

    These people in Washington are so incredibly stuck in a bubble it's not even funny.

    Even if the economy starts going gangbusters tomorrow, I have read that the best we can hope for is 8% unemployment and this seems deemed to make unemployment higher. Oh, well, this is what PPUS has brought us to.

    Yes, but think how much worse things (5.00 / 1) (#6)
    by observed on Tue Apr 19, 2011 at 12:23:38 PM EST
    would be if we had a Republican.
    In fact, compare what's happened in the last 2 years to what happened with 8 years of Bush.

    I think that with almost everything (5.00 / 2) (#7)
    by Anne on Tue Apr 19, 2011 at 12:30:14 PM EST
    that's being discussed and proposed, the chances of the economy being in good shape in 2012 are getting smaller and smaller.

    Delusional doesn't begin to describe it.

    It's like they have the economic equivalent of anorexia, believing there is too much fat in the budget and cutting and cutting and cutting, even though the rest of us can see that they are slowly starving the economy to death.  The more they cut, the more they think they still haven't cut enough.

    This needs to stop.  And soon.

    IIRC Gang of Six proposals are based on (5.00 / 0) (#15)
    by MO Blue on Tue Apr 19, 2011 at 12:51:22 PM EST

    The deficit commission plan would cut taxes for the wealthiest Americans and corporations while slashing Social Security and Medicare benefits that working-class Americans rely on to make ends meet, Gage said.

    "It would do nothing to spur job growth and energize the economy. In fact, it would cut take-home pay for millions of workers while making the millionaires and Wall Street executives even richer," he added.

    Most of the savings proposed in the plan would come from cutting spending on federal programs and services that Americans rely on every day, like veterans care, homeland security, law enforcement and public health programs. The plan also would slash the size of the federal work force by 200,000 jobs, freeze federal wages for three years and consider major reductions to civil service and military pensions. link

    Not delusional (5.00 / 1) (#37)
    by BDB on Tue Apr 19, 2011 at 04:19:44 PM EST
    Sociopathic.  It's only delusional if you believe that they think the proposed budgets will help the average American, which I don't.  The bipartisan goal is to lower the standard of living in this country so as to lower wages so as to make more profits for their corporate masters.  High unemployment and having people scared and scrambling to make ends meet is a way to do that.  It's not delusional economics, it's the shock doctrine (no brought to you by both the Democratic and Republican parties!).  

    Or What Ioz Said (5.00 / 2) (#39)
    by BDB on Tue Apr 19, 2011 at 04:24:04 PM EST
    This says it better than I did:

    If you look at "high unemployment" as a public policy problem that "reduces demand" and prevents "a full economic recovery"--or, whatever, fill in the blanks with your own finance-pages-isms--then the behavior of the President and the federal government seem inexplicable.

    If you look at "high unemployment" as a desirable state in which the bargaining power of both the employed and the job-seeking is reduced to essentially zero, a state in which individuals and labor unions accept ever-more-disadvantageous wages and working conditions just in order to have a job; in which, in particular, workers desperate not to be fired increase hours worked and output even though their compensation is shrinking; in which profitability increases in part on the backs of those "productivity" gains . . . well, shit, it all makes a lot of sense. When nice liberals wonder why Barack Obama and the Democrats and the Republicans and Everybody are enacting policies to "harm the labor market," I would answer that they are enacting policies to harm the labor market.

    Unbelievable (5.00 / 1) (#9)
    by mmc9431 on Tue Apr 19, 2011 at 12:32:00 PM EST
    I can't imagine anything more devastating to the Democratic Party than cutting S.S. and Medicare, Throw in the mortgage part and the party will become extinct.

    If Obama is at all serious about these measures, he needs to step aside and let a real Democrat run in 2012.

    Hope springs eternal (5.00 / 0) (#21)
    by sj on Tue Apr 19, 2011 at 01:20:04 PM EST
    It's hard to let go of the idea that Obama wants to advance the Democratic Party, isn't it?

    Speaking of ending Medicare, (5.00 / 0) (#35)
    by Anne on Tue Apr 19, 2011 at 03:40:01 PM EST
    this is the ad the DCCC came up with to get the word out about Republicans voting to end Medicare.

    Maybe now we know what Jon Favreau is doing with his time, since it seems like only an overgrown frat boy would come up with an ad that mocks seniors as a way to hold Republicans accountable for their despicable policies.

    I mean, I'm guessing it's supposed to be funny, but what's funny about an old guy with a walker cutting lawns for extra money, or another old man getting work as a stripper?  

    Why on earth would Democrats make a joke out of this?

    No mention, of course, about the Dems' own plans to cut the program, along with Social Security; maybe they think we'll be too busy laughing at these kinds of ads that we won't notice.


    Oh god was that real? (none / 0) (#38)
    by sj on Tue Apr 19, 2011 at 04:20:07 PM EST
    Rotten from top to bottom this administration.  Sociopaths, the lot of them.

    But you gotta understand... (none / 0) (#41)
    by StephenAG on Tue Apr 19, 2011 at 05:39:07 PM EST
    ...That our beloved DCCC had really wanted to hire "Peggy", but she was otherwise heavily involved in "customer retraining program, yes" and just couldn't pull herself away for the new gig. Progress, baby!

    I think "Peggy" is running (5.00 / 1) (#42)
    by Anne on Tue Apr 19, 2011 at 05:42:30 PM EST
    HAMP...and all the people she supervises who are answering the phones are laughing their asses off at the desperate homeowners thinking they're going to get some actual help.

    That (none / 0) (#44)
    by Ga6thDem on Tue Apr 19, 2011 at 06:10:24 PM EST
    was downright insulting to everybody in it. It was freakin' embarrassing and yeah, it looks like yet another frat boy prank from Faveau. It is absolutely insulting to senior citizens and to women to boot. Those women's costumes at the end are representative of what? A bunch of strippers.

    I am 52 years old. (5.00 / 1) (#47)
    by Chuck0 on Wed Apr 20, 2011 at 11:23:08 AM EST
    I have been paying into both social security and Medicare since I was 14 years old. I knew I was gonna get screwed. This administration and congress is set to prove it.

    I think I'll be stocking up on ammo. (none / 0) (#48)
    by Chuck0 on Wed Apr 20, 2011 at 11:24:06 AM EST
    Since my best bet for retirement is my .357 and many, many liquor stores and 7-11's.

    Hara-kiri is a form (none / 0) (#1)
    by Big Tent Democrat on Tue Apr 19, 2011 at 11:55:02 AM EST
    of seppuku.

    no kidding (none / 0) (#2)
    by dandelion on Tue Apr 19, 2011 at 12:06:38 PM EST
    If Obama removes the home mortgage deduction he can kiss California goodbye.  

    FL too, if it is not already gone (none / 0) (#11)
    by ruffian on Tue Apr 19, 2011 at 12:37:46 PM EST
    Debbie Wasserman-Shultz will have a tough time selling that. I wonder if they have consulted with her on these plans?

    Lower rates better than sweet deals (none / 0) (#3)
    by Abdul Abulbul Amir on Tue Apr 19, 2011 at 12:10:25 PM EST
    Are you kidding? (5.00 / 1) (#12)
    by ruffian on Tue Apr 19, 2011 at 12:39:25 PM EST
    The mortgage deduction is the only one the middle class has. Millions more will be using the short form, so I guess that is one upside.

    They would have to cut rates pretty dramatically to make up for that loss.


    Recently had a brief (5.00 / 0) (#24)
    by sj on Tue Apr 19, 2011 at 01:29:32 PM EST
    interchange with someone... (MKS maybe?)  Who approved of eliminating the mortgage deduction and thought it was "progressive" because it would only be for "the rich".  S/he believed that the deduction was much too popular for them to even consider cutting it for us common folk.

    I might be relating it a bit incorrectly but that was the gist of it.  I had to stop "interchanging".


    Well, we could certainly (none / 0) (#43)
    by Zorba on Tue Apr 19, 2011 at 05:56:19 PM EST
    keep the mortgage interest deduction for those making under a specified amount each year (and/or for those houses which cost under a said amount, as well).  That would eliminate it for those with high incomes (I'm willing to say around $100,00/year or more, but I won't quibble about the exact amount) and keep it for those who really need it.  I don't think that anyone has suggested this.

    If (none / 0) (#23)
    by Abdul Abulbul Amir on Tue Apr 19, 2011 at 01:27:40 PM EST

    If you are at $82K in income at the top of the 25% bracket and paying $850 a month in interest a not very dramatic rate reduction to 20% is about a wash.  Plus the more deductions that go bye bye the more likely you can confidently do your own taxes.

    The wife and I are both wage earners, and don't have any income from property, investments, a business or the like.  But we still pay some guy to do our taxes.  With the tax code north of 75,000 pages it is too risky not to rely on an expert.


    Somehow (5.00 / 1) (#30)
    by chrisvee on Tue Apr 19, 2011 at 02:19:12 PM EST
    I have managed to itemize deductions without having to consult an expert.  I find the notion that we might as well get rid of the mortgage interest deduction because it makes tax preparation accessible to the taxpayer to be a little strange.  I'll keep the deductions, thanks.

    I've never, ever paid someone (5.00 / 1) (#50)
    by Chuck0 on Wed Apr 20, 2011 at 11:27:56 AM EST
    to do my taxes. I itemize and take the mortgage deduction as well. It's all pretty straightforward.

    Obviously it doesn't affect you (none / 0) (#25)
    by sj on Tue Apr 19, 2011 at 01:32:23 PM EST
    because if it did you would know it's not a "wash" it's a dunking.

    A wash (none / 0) (#27)
    by Abdul Abulbul Amir on Tue Apr 19, 2011 at 01:38:42 PM EST

    means you owe the same tax either way.  

    I understand what a wash is (5.00 / 0) (#33)
    by sj on Tue Apr 19, 2011 at 02:58:21 PM EST
    And this isn't one.

    You sound about like me (none / 0) (#28)
    by ruffian on Tue Apr 19, 2011 at 01:48:03 PM EST
    I use TurboTax, and I trust it. It doesn't recommend me doing anything risky. Just curious as to whether your accountant finds you any deductions.

    Really, if they do make it a wash, I am OK with it. I just don't know how they will do that while accounting for the wide range in amounts of interest that people pay. Maybe it is a wash for some people and not others.


    Oh brother (5.00 / 0) (#20)
    by sj on Tue Apr 19, 2011 at 01:16:09 PM EST
    What sudden sanctimony.

    You must never have had a mortgage. (5.00 / 1) (#49)
    by Chuck0 on Wed Apr 20, 2011 at 11:26:02 AM EST
    Being a single male, with no dependents to claim, my mortgage deduction is the best tax reducer I've got. I make less than 100K. Hardly one of the rich.

    Caps to make sure all of the safety net (none / 0) (#5)
    by MO Blue on Tue Apr 19, 2011 at 12:23:13 PM EST
    programs disappear completely.

    That's almost certainly an understatement. It's difficult to scrutinize a blueprint that hasn't been released, but in addition to Warner's comments, Sen. Tom Coburn (R-Okla.), another gang member, told Fox News yesterday that the agreement will also include spending caps on mandatory and discretionary spending, which is hopelessly insane. link

    The Gang of Six stuff (none / 0) (#8)
    by lilburro on Tue Apr 19, 2011 at 12:31:52 PM EST
    is ridiculous.  One would hope Obama has learned a lesson from entrusting bipartisan "gangs" to produce anything of worth.  Apparently not.

    Can somebody point me to where in the (none / 0) (#10)
    by Farmboy on Tue Apr 19, 2011 at 12:34:29 PM EST
    NY Times article Geithner endorses the Gang of Six? Or mentions them? Thanks.

    In the words of Gail Collins . . . (5.00 / 1) (#13)
    by Big Tent Democrat on Tue Apr 19, 2011 at 12:49:00 PM EST

    On a more serious note (none / 0) (#14)
    by Big Tent Democrat on Tue Apr 19, 2011 at 12:50:32 PM EST
    the Hill. But I am sure it is all just nasty lies.

    I am awaiting (5.00 / 0) (#16)
    by lilburro on Tue Apr 19, 2011 at 12:56:38 PM EST
    the 11th dimensional explanation of how Obama is going to preserve SS in its entirety.  Haven't seen any yet.

    It's far too advanced ... (5.00 / 0) (#17)
    by Yman on Tue Apr 19, 2011 at 12:59:50 PM EST
    ... for us to understand ... higher plain of thought, etc., etc. ...

    They'll preserve SS by still (5.00 / 0) (#18)
    by observed on Tue Apr 19, 2011 at 01:00:56 PM EST
    collecting the money---then using it for something else. That is a current GOP plan. They will permanently "borrow" 6 trillion from SS to balance the budget.

    Okay, so that article talks about the Gang of Six (none / 0) (#26)
    by Farmboy on Tue Apr 19, 2011 at 01:38:03 PM EST
    but doesn't mention Geithner. So I reread the NYT piece for the third time, but Google can't find even the single word "gang" on that page. And the Kos blogger quotes Reid as saying that SSN won't be cut. So I'm not making the connection to where removing the social safety net is part of the Obama reelection plan.

    But I'm sure I'm doing this wrong, getting hung up on the content of the articles themselves. Sorry for getting off topic. My bad.


    Reid says........ (5.00 / 0) (#29)
    by MO Blue on Tue Apr 19, 2011 at 02:08:33 PM EST
    U.S. Sen. Harry Reid, D-Nev., said today there will be a "public option" in whatever health insurance reform bill comes out of Congress. link

    Somehow the fact that "Give them Hell Harry" has made a statement does not provide me with a great deal of confidence that his view will prevail.    


    Yeah whatever (none / 0) (#31)
    by Big Tent Democrat on Tue Apr 19, 2011 at 02:28:59 PM EST
    Geithnner is the guy who is gonna stop the Gang of Six.


    I hate these stupid games.


    How is the world is the economy going to be (none / 0) (#19)
    by Buckeye on Tue Apr 19, 2011 at 01:10:53 PM EST
    better?  I would like to believe they are smart enough to know the most recent slide in the U4 unemployment rate (9.8% to 8.8%) was mostly calculation change.  Consumer confidence is still crappy.  Oil prices are up and going higher.  ME is a mess.  Japan is a mess.  Europe is still risky with Portugal asking for help (not going to be a big driver of growth).  Commodity inflation is a problem.  And we are about to embark on austerity measures at a State and Federal level.  Demand is still bad.  We are going to add 1.5 million people to the work force from population growth over the next 18 months.  IOW, we must add 1.5 million jobs just to hold serve.  We are going to do better than that?

    Where is the growth going to come from?

    My cynicism is showing (none / 0) (#22)
    by sj on Tue Apr 19, 2011 at 01:21:59 PM EST
    I would like to believe they are smart enough to know the most recent slide in the U4 unemployment rate (9.8% to 8.8%) was mostly calculation change.  

    Because my immediate thinking in response to this is that of course they know that.  They're hoping we don't know that.


    Mortgage interest pd. deduction and, (none / 0) (#32)
    by oculus on Tue Apr 19, 2011 at 02:41:53 PM EST
    today, LAT lambastes CA Prop. 13 as the true source of all CA's current financial problems.  Not good news.

    Prop 13 ruined California's public school system (5.00 / 0) (#36)
    by shoephone on Tue Apr 19, 2011 at 03:59:40 PM EST
    And that's a fact.

    The percentage of owner-occupied (5.00 / 0) (#40)
    by oculus on Tue Apr 19, 2011 at 04:29:20 PM EST
    residences still benefiting from Prop. 13 is quite small.  Business property--not so much.  

    and so it begins (none / 0) (#34)
    by sj on Tue Apr 19, 2011 at 03:01:22 PM EST
    These are not good people.  These are not well-intentioned people.  These are the robber barons with a giant megaphone.

    So, who will vote for them? (none / 0) (#53)
    by NYShooter on Wed Apr 20, 2011 at 09:52:05 PM EST
    Every report I see or read tells the same story, Americans, from every category, are overwhelmingly against cuts to the major "entitlements" (S.S., medicare & medicaid) They also want to see the Rich contribute more to fix our current dilemma.

    I mean, even the Tea Party mouth breathers....., I know, I know, "keep your Government hands off my medicare." but, that was then, I can't believe they haven't "seen the light" by now. They're mostly older folks and they  can't be that stupid to vote for people that will, quite literally, plunge them into poverty.

    Of course, the nightmare that dare not be whispered, is that Obama, even if the Right Wing & the Tea Party suddenly experience an epiphany and become progressives, would push his cut, cut, cut program regardless.

    It sure would explain a lot about his here-to-fore inexplicable actions.


    Who will vote for them? (none / 0) (#54)
    by sj on Thu Apr 21, 2011 at 01:06:33 AM EST
    It's a dilemma, for sure.  We have, alas, a two party system.  So when both parties are bought and paid for the rest of us are SOL.  

    Who? Those who are young enough (5.00 / 1) (#55)
    by Anne on Thu Apr 21, 2011 at 07:08:28 AM EST
    to not have any expectation that any of these programs were ever going to be there for them anyway - people for whom the steady and increasingly loud message, that these programs are headed for the cliff, has wormed its way into their heads and been allowed to percolate.

    Unless of course, too many of this younger crowd are unemployed, or working for wages that don't allow them to pay their bills, much less save anything for the future - it might be dawning on them that the current crop of legislators - and the president - are actively undermining the government's ability to be that safety net down the road and creating the self-fulfilling conditions that dovetail with that agenda.

    If the economy isn't any better in 18 months, I think a lot of people will just stay home, or decline to vote for national candidates, having finally understood that it's six of one, half a dozen of the other which party is going to kill their futures.


    Is (none / 0) (#45)
    by AngryBlackGuy on Wed Apr 20, 2011 at 01:29:51 AM EST
    The preferred  position that Obama should make no change to any entitlement in any way?

    yeah, pretty much (5.00 / 1) (#51)
    by sj on Wed Apr 20, 2011 at 12:58:14 PM EST
    Why do you ask? So you can figure out (5.00 / 1) (#52)
    by Anne on Wed Apr 20, 2011 at 05:52:04 PM EST
    which position is the one most likely to be a good political move for Obama?

    Actually, you've been reading here long enough to know where most of the commenters stand on this issue, but in case you need a refresher, the "preferred" position is for the cap on wages subject to SS tax be lifted, which would immediately end any discussion of SS having a "problem" that needs to be fixed.  Putting people back to work would help with that, too; more people working means more money being paid into SS.  But, golly, the coming austerity program is just going to put more people out of work, thus somehow legitimizing the phony crisis.

    Forget raising the retirement age - that's a benefit cut. Forget "indexing" and "means-testing:" those are just more ways to cut benefits.

    The Medicare/Medicaid "problem" could have been fixed by going to a single-payer health care system.  Whoosh...that opportunity was flushed down the toilet.

    End the Bush tax cuts: end of problem.

    So, there goes about 10 minutes of my life that I've wasted and will never get back, answering a dishonestly and disingenously asked question from someone whose likely response will be to whine that we "can't" do anything like what we should be doing, that we all have to suck up our "disappointment" and make sure to vote (D) in 2012, lest the eeeeeevil Republicans take over.



    Obama has already (none / 0) (#46)
    by itscookin on Wed Apr 20, 2011 at 08:10:06 AM EST
    removed $500 billion dollars from medicare and has reduced the amount being taken in to social security with his reduction in payroll taxes. I'd settle for a little honesty as a beginning. Give the Republicans time to catch up before running offensive ads.