Blogs » Politcs Plus » Lame Duck Session and the Debt Panel


Yesterday, Alan Greenspan, while making a guest appearance on Meet the Press, assured us, that this country is not going to go into another recession; but he did warn us about a possible bond market crisis. He said that our $1.3 trillion deficit might spook the bond market into raising interest rates; this will undermine our slow recovery. He and several other top economists have emphasized the need to start reining in spending and a need to accept some tax increases. Mr. Greenspan liked Erskine Bowles and Alan Simpson's debt panel's recommendations but he was really enthused with Congressman Paul Ryan's proposals which include privatizing Social Security and Medicare. That was no big surprise, since Greenspan has always been a member of the Market God faithful....Listen carefully as key republicans will say " allow all younger taxpayers to invest a small portion in the market" as part of the solution for reforming Social Security. Even Senator Jim DeMint realizes that Social Security was never a burden but it's in trouble because we use the funds to pay for budgeted items. Republicans will go on and onto say how Medicare will bankrupt this country at its current pace, but they will not offer solutions for reform, because they intend to introduce a voucher program for those on Medicare...."Under Ryan's Roadmap, the value of the voucher would be less than expected Medicare spending per enrollee in 2021, when the voucher program would begin. In addition, Medicare’s current payment rates for providers are lower than those paid by commercial insurers, and the program’s administrative costs are lower than those for individually purchased insurance. Beneficiaries would therefore face higher premiums in the private market for a package of benefits similar to that currently provided by Medicare. "...... I’m surprised that no one has mentioned that the debt panel suggests adding “ a robust public option and /or all-payer system” into new exchanges that the federal health laws calls for in 2014.

President Obama’s debt panel was the focus of the Sunday talk shows but David Gregory of Meet the Press and Chris Wallace of Fox News Sunday angered David Axelrod because they focused on the objection of Nancy Pelosi but didn't mention that some republicans were not on board with the initial recommendations of Erskine Bowles and Alan Simpson. Both hosts were trying to get Axelrod to show the White House's hand before Thursday’s meeting between the president and the leaders of both parties. The initial recommendations of the two chairmen of the debt panel will reduce the debt by $2 trillion in 10 years but in the same sentence, the hosts were talking about retaining the entire Bush taxes, which will increase the debt by $4 trillion. The plan by Bowles and Simpson calls for lowering all the tax brackets, including the corporation tax rate, but will eliminate all the deductions such as the child tax credit, education credit, and the EITC. It's a little early but I would like to see the study to show where this would benefit the middle class. The plan also includes a modest 18¢ tax on gasoline to be used for alternative energy incentives but even Ross Perot's plan called for a 50¢ increase because he knew way back then, of our need to go to alternative fuels and what it would take to get there.

I'm really surprised that the media, voters or politicians in this past election were not concerned about the costs and direction we're taking in Iraq and Afghanistan. The Bowles and Simpson’s plan calls for reducing our presence around the world by 1/3 and a cutback on foreign aid but does not specifically mention Iraq or Afghanistan. It could be because that's a call for the commander in chief, but recommendations would not hurt and Congress does control the purse strings. Sunday, Brit Hume used the word antiwar left in saying that they would put pressure on the president to withdraw our troops in Iraq and Afghanistan... I bet Fox News didn't mention an excerpt from President Bush's book that stated that Mitch McConnell privately asked the president to bring home some troops to help the republicans in the 2006 election. The very same week Mitch McConnell called the democrats who are calling for a new direction; the party of "cut and run."

Congress will reconvene this week and it's going to be interesting what this lame duck session will produce. The Bush tax cuts will take up most of the oxygen but the secretary of defense wants Congress to repeal DADT while the democrats have the numbers. Senator McCain will win the “waffler of the year" hands down because first he said he would abide with the wishes of the commanders when it came to the repeal of DADT. When the secretary of defense and the chairman of the joint chiefs encouraged the repeal of the act; McCain said he would wait for the military's internal study on the effect repealing DADT would have. Leaks from that study state that 70% of the service members are supporters or indifferent to allowing gays and lesbians to serve openly. Today, he is siding with, General James T. Conway, the commandant of the Marine Corps, who opposes the repeal.