The media – and “think tanks – insist on including Social Security in the discussion of budget problems when it has no current problem (first projected problem is in 2037 when we pay only 80% of the then payable benefit – but still with no effect on the deficit). Indeed, the payroll tax is not a general purpose tax that can be re-purposed to provide tax cuts for the rich. http://www.cbpp.org/cms/index.cfm?fa=view&id=1258
So we have a $2.8 trillion budget – not $3.5 trillion – after we exclude Social Security. And currently that budget is 25% defense with an additional 5% for military benefits – health and retirement. The remainder is 17.5% safety net programs, 7.5% interest on the debt, and a Medicare cost that comes with revenue equal to about 10% of the $2.8 T budget (it is only a little short of paying for itself) that offsets the health cost of Medicare – with Medicare plus CHIP and Medicaid spending at 26% of spending. A few minor things like education, health research, energy, fill up the remaining 19% of the budget.
Well, the Washington Post is reporting http://www.washingtonpost.com/business/economy/senate-democrats-offer-3-trillion-debt-deal/2011/10/26/gIQAhgvMJM_story.html that Obama (called “Congressional Democrats” in story) will not stop with his “grand deals that screw us” and has put a $3 t reduction over 10 year plan ($1.3 T in tax and 1.,7 T in cuts including a raise in the Medicare eligibility age and “chained CPI” reduction to Social Security benefits) on the table, so as to avoid those automatic cuts to defense should there be no deal. Indeed Obama wants deep cuts so the deal can include new spending Obama will sell as a stimulus. Seems a hit on Social Security when it has no affect on the budget is one of Obama’s goals.
The WP also reports that the Dems have put on the table a smaller fall back plan that saves less than the $1.2 T over 10 year goal (but I guess it still stops that trigger cut of defense if no plan is agreed to). My Senator – Sen. John Kerry – told the WP that “he continued to believe the committee should strive for the largest deficit reduction package possible”.
You have to the love the way the Democratic Party is being so insistent on a deal that ends any possible return to the Clinton tax rates as it screws the non-rich in favor of the rich. Just proves the value of the two party system. /s