Deficit Panel Targets You

October 25, 2010 by  
Filed under Economics

You may have forgotten that there is a federal “fiscal commission” working since against a December 1 deadline to propose a plan for balancing the budget by 2015. The official title is the National Commission on Fiscal Responsibility and Reform. You haven’t heard much about it, have you? That’s because there is an election to take care of first.

Let’s get one thing out of the way first. There will not be a balanced budget by 2015, no matter what plan the fiscal commission suggests. Congress – Republicans and Democrats alike – does not seem capable of doing that.  (OK maybe it could happen if the Tea Party takes over the House, Senate and the White House.)

But there will be an attempt to do something – and that brings us to some of the strategies being discussed by the commission which are more about increasing revenue and less about decreasing spending.

Near the top of the list is the mortgage interest deduction, which costs the government a lot of tax dollars and is something unique to our tax system. Eliminating this deduction has been discussed before but quickly and firmly squashed by the real estate and banking lobbies. Thus, if anything comes of this agenda item, it will not be a complete elimination of the deduction. Instead, I predict that the proposal will be to phase the deduction out for the higher income taxpayers.

Social Security and Medicare are being also discussed but there will be no proposals for immediate reform. That’s too complicated and politically risky for this panel.

Keep your eyes and ears alert for the commission  report. Your economic future may depend on it.

You can read more about it here:   Deficit Panel Targets Areas to Cut and here:  FiscalCommission.gov


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17 Responses to “Deficit Panel Targets You”
  1. Greg in Tennessee says:

    Work to pay off your mortgage, then if the deduction “goes away” it won’t matter. It’s a lousy financial move to pay the mortgage company thousands of dollars in interest just to get a small deduction. Besides, you can get the same tax benefit giving money to a church or charity.

    The pressure is on to find more revenue from every American because Congress has been mortgaging our future for years and the bills are beginning to come due!

  2. Another Reader says:

    Hope they grandfather the existing mortgages or these brilliant financial engineers will cause pretty much everyone in the middle class to sell homes they suddenly can no longer afford. And investors will have to sell (or walk away from) all their mortgaged properties. Who will provide housing other than the low income housing tax credit cartel if that happens?

  3. MasterPo says:

    Existing or new it won’t matter. It will kill the already on-life-support housing market.

    So what was that promise again? Oh yea: No middle-class person will see a single dime of increased taxes! (paraphrase)

    Gotta love that hope and change.

    ps- Don’t count on any meaningful SS or Medicare cuts too other than maybe some kind of b.s. ‘means testing’ for SS and the Obamacare cuts already passed.

    pps- 2011 it’s all over. Regardless of who wins next week. Hope you bought that gold I suggested earlier this year…

  4. Rick Beagle says:

    I find it amazing that people are clamoring about the deficit, and our debt, but when possible (none of this is in concrete) solutions are brought to the table for discussion, these same folks scream bloody murder. I guess we only want to fight the deficit and the debt on the backs of someone else.

    Folks, we have a revenue and expenditure problem, and while I and my fellow progressives are as nervous as you, this is kind of what we asked for.

    Fiscal responsibility means nothing is off the table, and in the end, everyone is going to be on a fiscal diet. Now if you want to help the situation, vote for folks that will help, rather than those that would use this opportunity as some sort of continuing sick political game.

    Peace.
    Rick Beagle

    • avery says:

      Surprised to see you advise against voting for progressive, Rick.

      • Rick Beagle says:

        If you have a progressive rep that does not espouse fiscal responsibility, boot them. But historically speaking, progressives have been far better at balancing the budget that Republican rhetoric seems to suggest. There seems to be this perception amongst “fiscal conservatives” that the Repubs are tight fisted, and that the Liberals are free spenders. Historically that simply isn’t true.

        It is true that Dems spend our tax money with a different priority than Conservatives. And that is it.

  5. Maria says:

    I must say that this is a proposal (total or partial elimination of the home mortgage deduction) that I could support. The current deduction is nothing more than a serious distortion of the housing market which encourages people to buy more house than they can really afford. Why should the government favor homeowners over renters? Without the deduction, it is easy to compare one form of housing with another and each household can decide what makes the most sense based on myriad personal circumstances. The current deduction increases the likelihood of an AMT bill for those with substantial incomes and, for example, large numbers of children. The current deduction also encourages consumers to “go for it” and reach to become homeowners when they really should remain renters. I hope the panel recommends elimination of this ridiculous tax break and that Congress has the courage to follow through.

  6. MasterPo says:

    Ricky – Can you PROVE eleminating these tax deductions, and enacting new taxes like VAT, *will* cure the deficit and debt problems?

    I can PROVE that whenever Washington gets more $$$ they just spend $$$.

    We’ve been through this countless times in the last 30-40 years: Just pay a little more tax and all will be right with the world. But it never is.

    Thomas Jefferson said those who give up liberty for freedom rarely end up with either.

    I’ll expand on ol’ TJ’s observation to say those who pay more taxes for government financial solvency rarely end up with it.

    • Rick Beagle says:

      First of all, it would make Thomas Jefferson sick to see the Fox’s parrots use his words to twist reality, so give it a rest. It doesn’t make you look smart, but put’s you squarely in the middle of “tea party” crazy land.

      Second, and this is the part you need to pay attention to, when has “doing nothing” worked? The commission is discussing all options, and if you are serious about a fiscally responsible government, then all options need to be on the table for discussion.

      As a progressive, I would love to see the military infrastructure trimmed down a LOT. It is one of the most abused and expensive pots of gold that we have sitting out there. Closing loopholes that encourages tax dodging by corporations should be considered. Subsidies to oil companies and mega farms should be discussed as well.

      Of course, I oppose raising the SS age, as it is solvent for the moment despite Fox’s never ending propaganda to the contrary. But I do not oppose discussing the issue along with other entitlement benefits.

      Which is odd, the progressives are willing to talk about balancing the budget, and paying down the debt. It is telling that the “fiscal conservatives” on the other hand are already screaming bloody murder, and nothing has even been proposed. There only answer seems to be “reduce taxes” (for the rich) and all will be good with the world….

      Yep, things are sure going to get better with Republicans running congress. You can already see the collective face to palm of the American tax payers when they realize that they have been had (again).

      Peace.

  7. MasterPo says:

    I reflect further…

    Here I sit looking at a pile of bills yet to be paid. Some past due already.

    And I think “Lord, if only I had more taxes to pay I could make all these bills go away!”

    Give me taxes or give me…

    • Rick Beagle says:

      Yes, you are so right. Cutting taxes for their wealthy friends will certainly help you pay those bills. Don’t worry they will throw a pittance your way just to shut you up. Another trillion or so added to the debt, and more deficit spending…. Yeppers, you “fiscal conservatives” sure have it all figured out despite all evidence to the contrary. But, it does make a good sound bite for the ignorant dupes that pull the lever for them, and listen in to their propaganda networks.

  8. MasterPo says:

    You ever going to answer the question:

    How SPECIFICALLY have YOU benefitted from someone else’s taxes going up?

    No hyperboly about roads and bridges and schools. YOU and YOUR family’s specific personal benefit from taxing $$$ from someone else.

    Can’t wait to hear it.

    • Rick Beagle says:

      This is such an absurd conversation, as this is a proposal, not a referendum on your view that all taxes should be eliminated. Despite my better instincts, I will play along.

      Taxes have paid for the following:

      Roads, bridges, military, justice system, police, firemen, schools and teachers, ACE, NASA, NOAA, DOE, FBI, and a host of other agencies that have either directly or indirectly helped my family, and more than likely yours.

      It is confusing that we are at one of the lowest points in our tax history, and you are complaining about taxing a group that gleans 1 out of ever 6 dollars made in this country. We have created a massive class divide and worked hard to undermine our future through cuts to our education system, our research and development, and our inane wars meant to enrich our bloated defense infrastructure.

      Heck, I can’t even convince you to move off the oil standard even though world wide business trending says that is where the future lies. You and your short bus Republican leaders have no desire to step beyond their comfort zone, and instead cling to their Bibles and guns.

      You want a surplus budget, with the surplus being paid toward the deficit? If you truly want that, then again, all options must be on the table.

      Peace.

  9. MasterPo says:

    There you go – typical liberal.

    Can you show me ANYWHERE, either here or on my own blog, where *I* said that “all taxes should be elminated”?

    I am VERY clearly well on record saying very much the opposite. If you’re to lazy to read it or comprehend I can’t help you.

    • Rick Beagle says:

      Typical Tea Bagger circular logic.

      Tell me a tax you are fine paying, so I can call you a liar. Just one….

    • Rick Beagle says:

      Questions:

      1)What was the average monthly private sector job growth in 2008, the final year of the Bush presidency, and what has it been so far in 2010?

      2)What was the Federal deficit for the last fiscal year of the Bush presidency, and what was it for the first full fiscal year of the Obama presidency?

      3)What was the stock market at on the last day of the Bush presidency? What is it at today?

      4)Which party’s candidate for speaker will campaign this weekend with a Nazi reenactor who dressed up in a SS uniform?

      Answers:

      1)In 2008, we lost an average of 317,250 private sector jobs per month. In 2010, we have gained an average of 95,888 private sector jobs per month. (Source) That’s a difference of nearly five million jobs between Bush’s last year in office and President Obama’s second year.

      2)In FY2009, which began on September 1, 2008 and represents the Bush Administration’s final budget, the budget deficit was $1.416 trillion. In FY2010, the first budget of the Obama Administration, the budget deficit was $1.291 trillion, a decline of $125 billion. (Source) Yes, that means President Obama has cut the deficit — there’s a long way to go, but we’re in better shape now than we were under Bush and the GOP.

      3)On Bush’s final day in office, the Dow, NASDAQ, and S&P 500 closed at 7,949, 1,440, and 805, respectively. Today, as of 10:15AM Pacific, they are at 11,108, 2,512, and 1,183. That means since President Obama took office, the Dow, NASDAQ, and S&P 500 have increased 40%, 74%, and 47%, respectively.

      4)The Republican Party, whose candidate for speaker, John Boehner, will campaign with Nazi re-enactor Rich Iott this weekend. If you need an explanation why this is offensive, you are a lost cause.

      Now go vote!!!

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