Crisis Averted? The Latest on the Debt Ceiling

Nothing's sealed, but it looks like we've got a deal. The President and Congressional leaders have agreed on a package to raise the debt ceiling and reduce deficits by $2.5 trillion over the next decade. Congress still has to pass the package today (no sure thing, if you've been following this charade), but all signs point to the debt ceiling being raised, skirting a default on national debt that loomed as soon as tomorrow.

Here's how the deal works:

  • Immediately enacts federal spending cuts of about $1 trillion over a decade.
  • An immediate $900 billion increase in the debt ceiling (enough to last less than a year's worth of borrowing needs).
  • Tasks a bipartisan Congressional committee with finding an additional $1.5 trillion in deficit cuts by late November. The White House's term sheet says this will include "entitlement and tax reform." (Slides that House Speaker John Boehner presented to his caucus explicitly say tax increases are off the table, though that is disputed). If the committee is successful, the debt ceiling will be raised by another $1.5 trillion.
  • If the committee fails to find adequate savings, an automatic trigger will cut $1.2 trillion in additional spending over a decade, split between defense and non-defense spending, but sparing Social Security, Medicare, and what the White House calls "low-income programs." The debt ceiling would be raised by an additional $1.2 trillion.

A few things remained unknown.  

The first is taxes. The president's outline notes that if the Congressional committee doesn't enact a balanced approach (spending cuts and tax hikes), an extension of the Bush tax cuts on upper-income earners is off the table. The tax cuts are set to expire in January 2013. Rather than being extended, "the President [could] use his veto pen to ensure nearly $1 trillion in additional deficit reduction by not extending the high-income tax cuts," says the White House.

Regardless of how you feel about tax hikes (nobody likes them), the hard truth is that taxes have played a major role in current deficits. As a percentage of GDP, the drop in tax revenue has been nearly as severe as the increase in spending:

Source: Office of Budget and Management.

Taxes will come in at 14.4% of GDP this year, compared with a post-war average of 18%. Spending as a percentage of GDP will hit 25.3%, compared with a 20.3% long-term average. Much of a drop in tax revenue is a matter of high unemployment and a weak economy, but the same is true for the increase in spending: A quarter of the $1 trillion increase in annual federal spending since 2007 can be attributed to the higher cost of unemployment benefits and food stamps.

Also still unknown is where the spending cuts will fall. The agreement doesn't specify what exactly will be cut, but the makeup of federal spending suggests that large spending cuts can't be very broad. Almost 80% of federal spending is defense, entitlements, and unemployment benefits:

Total Federal Outlays (in billions)

Segment

2011

Percent of Total

Defense

$768

20%

Social Security

$748

20%

Income Security*

$623

16%

Medicare

$494

13%

Health (Medicaid)

$388

10%

Net Interest

$207

5%

Veterans Benefits

$141

4%

Education/Training

$115

3%

Transportation

$95

2%

Justice

$61

2%

International Affairs

$55

1%

Natural Resources/Environment

$49

1%

Science/Space/Technology

$33

1%

General Government

$32

1%

Energy

$28

1%

Community/Regional Development

$26

1%

Agriculture

$25

1%

Commerce and Housing

$17

<1%

Undistributed Offsetting Receipts

($90)

(2%)

Total 

$3.8 trillion 

100%

Source: Office of Management and Budget.
*Includes unemployment benefits, food stamps, etc.

The problem? All of those top programs are very popular, either among voters or lobbyists. The biggest battle of this debt debate might not have been during the past two weeks. It might come this fall, when the details of that agreement are being hammered out.

Also still on the table: a credit downgrade. The major rating agencies have America's credit rating on notice, warning that any deficit-reducing plan not up to par could lead to a downgrade. One S&P analyst specifically noted that avoiding a downgrade would mean cutting the deficit by $4 trillion over a decade. The current agreement doesn't do that. If the rating agencies stay true to their word, we could see a downgrade in the coming weeks or months.

We'll keep you updated as news rolls in. In the meantime, what do you think about the current deal? About how Washington has handled this mess? About the debt ceiling in general? Sound off in the comment section below.

Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. Follow him on Twitter @TMFHousel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (34) | Recommend This Article (49)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 01, 2011, at 1:04 PM, andresso wrote:

    As far as I understand, the problem with these "cuts" is that they are not actually cutting costs - they are just reducing the future growth of costs. And since the "cuts" come into effect from 2013, ie far in the future, there's plenty of time to reverse even those decisions.

    It seems pretty pointless that they had to take US to the brink of default over cuts that will be done over 10 years starting from 2013. Why such a rush? Why couldn't they make those decisions during normal budgetary process?

    And I think it is absolutely nuts that they won't consider tax hikes at a time when tax income is at historical lows.

  • Report this Comment On August 01, 2011, at 2:05 PM, David369 wrote:

    OK, so tax income goes down because everyone is poor and don't have anything to tax and spending goes up for unemployment/etc because everyone is poor and need to eat/etc. Also I assume the Govt cuts a bunch of taxes on companies so they spend the money to hire people (and they don't) and they give "credits" for farmers, oil companies, and what not to stimulate the economy. Which probably works about as well as the Govt giving "loans" to the mortgage companies so the mortgage companies give loans to people buying houses. Which instead they bought other smaller mortgage companies.

    What a mess. I guess attacking a rich third world nation and taking their money probably wasn't considered.....

  • Report this Comment On August 01, 2011, at 2:54 PM, hwq1776a wrote:

    2.5 trillon is only 17 percent of 14.5 trillion. Looks like we've got a LONG way to go before we're back in the black. Sadly most of us will probably be dead before that happens!

  • Report this Comment On August 01, 2011, at 4:00 PM, dbtheonly wrote:

    David,

    There aren't any rich 3rd World nations. And look at the mess they made of Iraq, they haven't been abel to grab the oil there.

    Now I'm still waiting for the same old wingnuts to post the same old arguments proposing

    the Gold Standard

    Elimination of Labor Unions

    Elimination of Government Regulation:

    including Pollution control, Child Labor regulation, and Workpalce Safety

    Elimiating the Fed.

    Elimination of all taxes

    Adding Any Rand's face to Mt. Rushmore

  • Report this Comment On August 01, 2011, at 4:06 PM, FutureMonkey wrote:

    Interesting that none of the deal-makers are addressing the principal cause of the deficit -- the difference between 10% unemployment and full employment (as Morgan alluded to). Job creation apparently is only an election year conversation or are we still relying on the "confidence fairy" to magically create jobs in the private sector (as alluded to in NYTimes editorial this AM).

    Seems to me that deep and broad reductions in domestic spending will cause immediate reduction of public sector jobs and private sector jobs dependent on contracts, resulting in three counterproductive pressures -- reduced payroll taxes, reduced income taxes, and increase burden on the government services being cut. Sounds like a death spiral not a solution.

    Until we start swinging back to full employment all these deficit hawks are doing is replacing services with fairy dust while the deficit continues it's current insustainable course.

  • Report this Comment On August 01, 2011, at 4:22 PM, Ravi786 wrote:

    The debt deal is no deal to begin with -

    The only possible course of action is for US to default

    * - devalue the dollar

    * - cut defense spending

    * - default on the debt

    * - start fresh and have a balanced budget.

    This will also give a dose of reality to the entire world who accumulate dollars.

    US has defaulted the moment it started printing the dollars.

  • Report this Comment On August 01, 2011, at 4:55 PM, sydsydsyd wrote:

    Can kicked down the road.

  • Report this Comment On August 01, 2011, at 5:04 PM, BMFPitt wrote:

    @hwq1776a,

    You don't understand. That's not a 2.5 trillion surplus, that's 2.5 trillion less future borrowing, even if you actually believe the numbers. We're currently spending 50% more than we're taking in, and with the new plan that'll be like 40%. Even if you're giving them the benefit of the doubt.

  • Report this Comment On August 01, 2011, at 5:20 PM, Borbality wrote:

    dbtheonly: you forgot immigration!

    I agree with Futuremonkey for the most part. Austerity will bring in less money, sort of making a wash out of the spending cuts and leaving us close to the same spot we were already in.

    I suppose the cuts might be necessary if only to keep our AAA credit rating. Of course it's a farce that the rating agencies have that much clout, but ballooning interest rates would wipe out a lot more than the small potatoes congress is fighting over.

  • Report this Comment On August 01, 2011, at 5:31 PM, David369 wrote:

    @dbtheonly

    unfortunately you are pretty much right...

  • Report this Comment On August 01, 2011, at 5:44 PM, xetn wrote:

    dbtheonly:

    I realize you can't live without your "nanny" taking care of you. You seem to love all the "free" services that the government has "entitled" you to. But it is apparent that you don't want to pay for those services yourself, but want everyone else to pay for them. I just have to ask: why are you investing in the stock market?

    The difference between you and me, is I favor voluntary exchange while you favor coercion by your Uncle. I only wish to pay for those services that I want to use, not what someone else (with a pretense to knowledge) believes what is best for me and my money. Uncle does not like free choice nor individuals.

    The point is: without all of that government spending on every pork issue they can dream up, we would not be in this mess in the first place. So, keep dreaming of that governmental Utopia, but don't hold your breath.

  • Report this Comment On August 01, 2011, at 5:58 PM, mclaugph wrote:

    lol @dbtheonly

  • Report this Comment On August 01, 2011, at 6:44 PM, canadacomments wrote:

    This is the best, most reasoned commentary on the U.S. debt problem I have read on MF for a long time. Here is a link to an outsider's view on the problem, and in particular the unbelieveable (to this outsider at least) aversion to raising taxes, especially for the very well to do.

    http://www.theglobeandmail.com/report-on-business/internatio...

    I think that this article puts a good perspective on the U.S. debt problem. Hope you guys get it figured out otherwise my retirement is going to be spent looking for beer bottles to turn in for change.

  • Report this Comment On August 01, 2011, at 7:58 PM, plange01 wrote:

    the easy part is over now america must replace obama and bring in someone who will do the work necessary to get the country out of its growing depression rather than spending his time on vacation....

  • Report this Comment On August 01, 2011, at 8:08 PM, stan8331 wrote:

    This is only a first step toward getting our fiscal house in order for the long-term, but at least it is a step, one that shows compromise isn't totally impossible even in these hyper-partisan times.

    There are a lot of beneficial things both parties ought to be able to agree on in some form - dramatically lowering the corporate tax rate while reducing loopholes and special preferences, increasing the personal tax rate for the upper brackets but also adding a preferential new three or five year tier for long-term capital gains, reforming Medicare and Medicaid to lower costs without ending their guaranteed coverage.

    Obviously we have a very long way to go, but seeing this deal approved makes me believe there is some reason for hope. It's also encouraging to me that Republican leaders stood up to the Tea Party crowd (even if only at the 11th hour) and refused to allow them to destroy our economy to preserve the purity of their extreme ideology.

    The next round will be even harder - Democrats will be asked to accept cuts to sacred cows and Republicans will be asked to accept measures to increase government revenue. But given how impossible the current deal seemed just a few days ago, I can't help feeling a small degree of optimism.

  • Report this Comment On August 01, 2011, at 8:56 PM, davide1310 wrote:

    My second and fifth graders could have done a better job of fixing this problem.

    How much can we save if we start cutting Congress' benefits? I don't believe making a living off of the backs of hard working Americans mirrors what Congress or the Executive Head were created to do. I am ashamed of both "Parties"; unfortunately we all share part of the blame because we vote, whether we vote or not.

    What is equitable about a federal government that requires states and local governments to abide by the GASB rules but recuses themselves from the same rules. D.C. is full of people who believe in fairy tales and B.S. Sooner or later everyone in this democracy is going to get hit square in the face with a large dose of socialism. I am tired of all the "taking from the wealthy spewing of hatred" from those that have to those of us who do not - get off your butts and earn a living. No one said, "Life is going to be fair".

    It has been downhill for the U.S.A. (except for certain days on WallStreet) since 9-11. We lost a lot; dignity, respect, monetary power, and the ability to lead in the world. I fear the coming losses - due to our nations inabilty to live within it's means - will make 9-11 pale by comparison.

  • Report this Comment On August 01, 2011, at 10:10 PM, slpmn wrote:

    Looking forward to the next debt ceiling fight. Don't be so sure it won't be a Democratic house holding the nation hostage as it coerces a Republican Senate and President into raising the estate tax or some other tax on the wealthy as a prerequisite to raising the debt ceiling. Oh, and they won't accept a single spending cut. The tea party set a stupid, short-sighted precedent with their little game, but I guess that fits the nature of their core philosophy perfectly.

    What happened to the Grand Old Party? The Greatest Generation died, that's what. The conservative party principals used to be tempered by character built in the great depression and WWII.

    Yeah, you are expected to work hard and contribute to society, and no, you shouldn't expect a government hand out for being lazy. But these people also understood that some things are out of peoples' control, and there remains some value in joining together for the common good from time to time.

    They understood the notion that "we're all in this together" because they know that's what got the nation through the two catastrophes of their early life experience. They would never have been so quick to risk a self-inflicted economic catastrophe like the tea partiers because they lived through it, and knew how bad it can be for everyone.

    Without that generation, the GOP has descended into the party of "I got mine and keep your g*d d*mned hands off of it." How's that for a road map to future national greatness?

  • Report this Comment On August 01, 2011, at 10:58 PM, crca99 wrote:

    I hope next time we let the moderates speak and dim lights and cameras on the absurd headline grabbing minority.

  • Report this Comment On August 01, 2011, at 11:41 PM, LongTime108 wrote:

    According to the chart in the article, Social Security, Income Security, Medicare and Medicaid account for 59% of 2011 Federal Government spending. These are currently off the table, but are at the core of our future problem.

    We can start now and reign the spending in slowly, in which case we in the boomer generation will share in the cuts, or we can put off bringing these programs in line with growth in GDP and they will be cut more abruptly, and perhaps even eliminated, and all the pain will be borne by our children and grandchildren.

    Today's deal just scratches the surface.

  • Report this Comment On August 01, 2011, at 11:43 PM, TMFHousel wrote:

    <<According to the chart in the article, Social Security, Income Security, Medicare and Medicaid account for 59% of 2011 Federal Government spending. These are currently off the table, but are at the core of our future problem.>>

    They are off the table in the initial $990 billion cut, but not the $1.5 trillion cut the committee will create this fall.

  • Report this Comment On August 02, 2011, at 1:25 AM, TempoAllegro wrote:

    Thank you FutureMonkey and BMFPitt for your lucid comments, and Morgan, for both the article and your comment.

    It seems to me that while Americans are struggling, the government ought to be helping them keep food on the table, prepare for, find, and keep work. Things like unemployment benefits and food stamps (properly monitored) must be maintained. Once American families have a source of income they can handle taking care of themselves quite well and make adjustments in this generation just like any other, but to hit them while they are down is just rotten and everybody knows it.

    While it is important to maintain our national credit rating and avoid default - I think we are missing the point. It is leadership. We need leaders - starting right from our families, and going right up to Washington. Leaders need to lead by example and make sacrifices. There was a good article recently on TMF about CEOs accepting $1 in compensation - maybe that is extreme, but I'd like to see some of the rich and powerful share their fair share of the agony the rest of the country has been going through at least until we get our financial house in order. If our President said he would work next year for one dollar and donate the rest to fight the deficit, then challenge the Speaker of the House to do the same, that would be leadership. We ought to think back to Presidents like Harry S Truman, who was so honest he would use his own postage stamps instead of those he could have got from the White House to mail his own letters. I see precious little of this sort of integrity now.

  • Report this Comment On August 02, 2011, at 2:26 AM, Chemsoldier88 wrote:

    The problem with welfare and food stamps is that it creates no determination or motivation to get out of poverty. People always talk about the greed in big businesses, lets say... big pharma. I WANT those people to be greedy. Why? Because then they are motivated and determined to create the next big thing - in this example - the next wonder drug that helps or cures your mothers cancer. Why is that a bad thing? When we are giving away money to these people, why would they look for a job? they are getting "Obama money" as that women famously said when he was elected. The system is broken and doesn't work.

  • Report this Comment On August 02, 2011, at 4:54 AM, Jayvega25 wrote:

    this new deal does not seem to ease my mind. . . if the gov. cant get it together, what can I do to keep my self sane? what can we do as Americans, to save our own assets? (not going to curse but take the "t" out) what needs to be done? all these talks of cut here and cut there, if we keep this up we may REALLY fall down lol. at this point i dont care whose fault it was when they were in office or whose decisions brought us here. when we can pay our own debts we can figure that out later so that history can play a new song instead of being stuck on REPEAT. i just hope that when all hell breaks loose we dont all go completely crazy, were nowhere near out of the woods.

  • Report this Comment On August 02, 2011, at 7:15 AM, Berserkeley wrote:

    @mungermaniac

    Truth be told, even if the job of President of the U.S., members of the House and Senate, took $0.00 compensation and no health or retirement benefits, we'd still have the same old sorry b*st*rds in office that we have today.

    MOST are not in office for the salary and benefits, they are there for what they will reap in compensation from those who put them in those offices. They are there for the power trip and "prestige" of political office.

    Darn few of our "elected representatives" give a dang for the poor saps that actually labor for a living. Unfortunately we live in an age of opportunistic indifference. The 1% that control the money supply, are living in a dream world, oblivious to the world that holds them up in their castles of wealth and greed. As long as they control the wealth and power, they couldn't care less for the rest of us. They are the ones that close the factories and create the unemployed masses, because they can outsource production for a tiny savings. Then blame their former employees for suckling the teat of "entitlements" because they're a bunch of lazy slobs that don't want to work.

    Tax breaks for the wealthy? They break the backs of the lower classes, and they "deserve" a break? Surely, the world has gone mad.

  • Report this Comment On August 02, 2011, at 8:27 AM, MrsCathyGF wrote:

    Anyone who's spent any time around national politicians will tell you, don't fall into it. They care about preserving their jobs. Period. The 'debt ceiling' in and of itself, is an often used tactic to manipulate the public and the system. Sure, they could fix the problem tomorrow, if they actually wanted to. They don't. It's like leaving work left undone in one's in box, to feel needed in the future. Eventually, that work undone bites all of us in the butt. And this will, too.

  • Report this Comment On August 02, 2011, at 8:58 AM, ddd3dvideo wrote:

    You guys that write these follow-ups kill me with the "blame the rich guy rhetoric." It makes me wonder what kind of readers are actually here at MF, apparently the same one's that frequent CNN and the other news sites. This helps confirms my theory, anyone who is competent in running a successful business (I'm apparently not one) is NOT writing commentary in Internet forums.

    You all are on an investment site. You're looking for any information you can get to keep your portfolio a little bit better than average and definitely in a positive direction. Most of you would never simply buy stock based on your emotions or on mediocre performance and expect an above average return (maybe you did as rookies.) We'd sell a stock if we knew it wasn't going to be profitable for some time or it was going to perform below average. The same companies you guys buy stock in are the same one's trying to find any way they can to make a profit so they can keep you 'loyal' investors. Think about it, you all - the investors, the public, the buyers who want something at the same price or cheaper than the last time you purchased it, you all want bigger, better, faster, cheaper and if you don't get it you'll go elsewhere. You'll buy crap from China because "it gets the job done" or "it's just as good" and you can't afford "American".

    So it's okay to do that as an individual but it's not okay to do that from a business prospective? It's not okay to take your company somewhere else that will make you more profitable (a trait ALL investors want to see)? It's not okay to lower your operating cost so you can keep prices in check (very few customers want to pay more for a product)? It's not okay to solicit governments help to give your company a competitive edge or make it a little easier to be profitable (we the voters do this when we write our officials about the wrongs we're facing)?

    We can do all these things as individuals but companies shouldn't. Investors own companies, CEO's appease the investors. You want to hold someone accountable for companies, start looking at the investment community.

    On the same note, you want to hold someone accountable for the debacle in Washington, start holding the voters, non-voters, citizens and constituents accountable for what the government does. WE HAVE GIVEN OUR OFFICIALS FREE REIN TO DO WHATEVER THEY WANT AND CLOUD THE RESULTS WITH A FOG OF SMOKE, MIRRORS, AND FINGER POINTING. Oh wait, we are accountable, we're on the hook for a 14-digit debt that has no end in sight.

  • Report this Comment On August 02, 2011, at 10:10 AM, NEMnyWtch wrote:

    Great article Mr. Housel! Lots of great comments also.

    I want to share a story. As I was going to pay for my parking, I ran into a man with a sign. On one side the sign said "Tax Wall Street", and on the other it was something like "No Cuts to Social Security / Medicaid". So, playing stupid, I smiled at the elderly gentleman, and said, "Excuse me sir, I was just wondering what your sign means?" He kindly explained that he was protesting cuts to benefit programs and that government should, "tax those that have the money". What I didn't have time to ask him, was "What is Wall Street?" I don't think many Americans that depend on these benefits have a clue of what the infamous "Wall Street" really is. What if it were seen as the hero, rather than the villain? Opportunity, rather than a barrior? We didn't like TARP when it came out, but it worked, didn't it? It's amazing what we can do when we both invest, and believe in ourselves.

    I think that the rest of the issue could be summed up to serious problems with both accounting, and accountability. If both were of strong presence in our government, we wouldn't be here right now. There needs to be a balanced approach to both taxing and spending, and we need to be able to look at the bill and understand it. Instead we have a tax code that cannot be read and clearly understood by the common tax payer. We have a government without a disciplined spending policy. I am happy to see this addresssed in this new bill.

    I would like to see more time spent on innovative solutions, rather than finger pointing, from both parties. I see lots of private sector layoffs, and lots of new municipal construction projects. As far as some of the large companies offering to pay more in taxes, that's good of you, but perhaps you could consider broadening your growth plans, renting space, and hiring, instead. Perhaps our governement should find more ways to promote growth, rather than creating the fear of taking on risk. I just hope the coming months show more work on these issues, and less political grandstanding.

  • Report this Comment On August 02, 2011, at 10:43 AM, David369 wrote:

    The President and all the Congressmen/etc make very little if you compare their pay to the pay of a CEO of even a moderate size company. No, they don't do it for the money and it probably took more money than they make in 4 years just to get them in office.

    It is easy to say the voters are to blame for who we have in Congress. I don't know about the rest of you but every time I vote for any office above state level I have a choice of Party A or Party B and then maybe a couple of long shots for C & D. Four choices maybe and knowing all four are what most people consider filthy rich and especially the main two runners are backed by huge money to fund the "marketing" of their chosen ones. The puppets presented at the primaries were not really decided by average voters but by groups with money and votes and marketing machines able to sway enough votes. An average person could never get elected because they wouldn't have the funds or the backing. The only real hammer we have is to not re-elect those already in office when we are displeased. That doesn't mean we will get anything better. No it's not the best system but that's what we got and it is better than what most countries have. If you really want to get into conspriracy theories go to Wikipedia and look up Bilderburg group.

  • Report this Comment On August 02, 2011, at 10:58 AM, GRAMPSRON wrote:

    I prepared these remarks for a survey with the League of Women Voters. I know this is a waste of time, but at age 70+ I surely do have lots of time –with a young mind in an old body!

    1. How would you describe your political views? ULTRA-PROGRESSIVE – impatient for sincerity and fed up with hypocrites.

    2. How would you rate your last experience at the polls? GOOD

    3. In last 12 months, have you contacted or visited a public official at any level of government? YES

    4. How would you rate the following sources to find out about the news?

    a. Print Media NOT OFTEN

    b. Television Media OFTEN MSNBC, CNBC – but definitely NOT Fox News lies and distortions

    c. Radio Media SOMEWHAT OFTEN – 99.9FM & 820AM – in Chicago south suburbs when I work on Thursdays

    d. Internet Media VERY OFTEN – I get a ton of e-mails on finances daily, as I invest in stock markets

    5. Do you think the country political parties are headed in the right or the wrong direction? REPUBLICRATS – WRONG!!!!!; DEMOPUBICANS – need to get free from $$$$ from big business and to represent the common people

    6. What is the single biggest problem with elected officials in Washington DC today? They are under the influence of special interests – the costs of elections and the “revolving door” – they kiss the behinds of big business for $$$$ and for future jobs, and of nut-cases for votes.

    7. What is the best way to limit impact of special interest money on political process? PUBLIC FINANCING OF CONGRESSIONAL ELECTIONS.

    8. Do you support/oppose Supreme Court ruling giving corporations/ unions SECRECY AND unlimited $$$$ rights to defeat candidates? STRONGLY OPPOSE – only individuals should be allowed to spend up to $1,000 each per candidate and NOT PAID TO ANY “PAC”!

    9. Would you support/oppose Congress reinstating limits on corporate/union spending on election campaigns? STRONGLY SUPPORT - ABOLISH CORP. $$$$$ FIRST AND MAKE UNIONS GET MEMBER OK & PUBLISH ALL CONTRIBUTIONS THEY MADE TO ANY CANDIDATE.

    10. Do you believe partisan redistricting determines the result of too many Congressinal elections before any vote is cast? STRONGLY AGREE – we need a constitutional convention to abolish state lines, state’s rights, 50 sets of state laws and the US Senate (billionaires country club) and instead to have one Congressional representative who may serve during their lifetime no more than 2 terms of 8 years each (subject to recall or impeachment) for every 100,000 registered voters, and with each voting district being reapportioned every eight years into either a square or a rectangle to take in such 100,000 registered voters who voted in the last election – and with the POTUS serving one 8-year term, also subject to recall or impeachment. (Also one driver’s license and one Federal police force nationwide.)

    11. How likely are you to vote in the 2012 Presidential election? VERY LIKELY – even though most candidates offered to us as choices by major political parties offer very little choice of substance, concentrating only on trivial issues.

    12. Do you support/oppose laws requiring voters to show photo IDs before casting their ballots? SUPPORT – but $ costs born by government so this does not become a hidden “poll tax” on the poor – also abolish “drug wars” that are now being used to beef-up privatized prisons and to simultaneously disenfranchise the dumbest and poorest people from voting rights, for possession of pot or crack.

    13. Do you support/oppose laws allowing people to register to vote and cast ballot on same day at the polls? OPPOSE – again if we had one universal ID card/driver’s license nationwide, you should be able to use that to vote in any district on electronic machines that would automatically bring up a screen showing YOUR congressional district’s candidates. Also with a medical records RFID chip implant, you could be verified and scanned electronically so you only could vote once, even if you tried to go to another polling place again .

    14. WHICH OF THE FOLLOWING ISSUES IS THE MOST IMPORTANT TO YOU?

    Please rank with 1-12 with “1” being the most important to you:

    1. TAX FAIRNESS – Unfortunately, this format will not let you see my September 2004 editorial, that rebuts Republicrat “FairTax.org”!

    2. ENERGY AND ENVIRONMENTAL POLICY – List the three steps of REAL 100% goals with calendar deadlines!

    3. CAMPAIGN FINANCE REFORM – Changes of districts, nomination by popular petition, terms and term limits, succession, recall.

    4. IMMIGRATION – Criminally prosecute/incarcerate corporate CEOs who exploit undocumented illegal immigrant labor.

    5. HEALTH CARE – Revise Obamacare to a $250,000 first dollar single-payer Medicare of all with private excess coverages.

    6. WARS IN IRAQ/ AFGHANISTAN/ LIBYA/ YEMEN/ SOMALIA – All need to be ended – like tomorrow – and bring troops home to work here!

    7. JOBS/ECONOMY – Rebuild industrial base we gave away to China; establish Canada and Latin America as our primary trading partners.

    8. VOTING RIGHTS – Decriminalize and pardon all for possession of pot or crack retroactively and reestablish lost voting rights

    9. HOMELAND SECURITY – Abolish Federal executive privileges to wiretap and invade privacy and repeal much of the Patriot Act.

    10. REPRODUCTIVE RIGHTS – Stay out of the bedroom activities of all consenting adults – decriminalize polygamy and polyandry.

    11. EDUCATION – Restore programs cut by Republicants/ Republicrants/ Republicrats – need incentives to keep educated student immigrants here.

    12. ETHICS IN GOVERNMENT – Abolish all forms of political patronage; eliminate “revolving door” of government and business; make ALL politicians, judges, staffs and immediate families DISCLOSE ALL financial interests and RECUSE THEMSELVES FROM arguing the merits of, and from voting on any issue that would impact such financial interests –either positively or negatively, with criminal sanctions

    1. In depth discussion of TAX FAIRNESS – Sorry you could not see my editorial opinion, that rebuts the Republicrat “FairTax.org”, going back to September 2004. When I wrote this back then in 2004, the Federal Reserve still had a “brag” on its website that it processed an average of $3 trillion ($3,000,000,000,000) in payment transfers every business day. Similarly back then the IRS boasted how it collected some $2 trillion ($2,000,000,000,000) in tax revenues for the Federal government that past year, from a myriad of sources - beyond just Federal income taxes alone. Back when I was still a Federal savings bank examiner, I had this idea and everybody looked at me like I was crazy. I thought and still think WAY outside the box. Who says we need a bunch of accountants and attorneys getting rich while they represent huge corporations and are quibbling with the IRS and with Congress over what should be “current taxable net income” before potential use of loss carry-forwards and loss carry-backs. And of what special write-offs should apply only to a particular client or a particular industry?

    Back then I had come up with the idea that to get rid of political bribery and graft, the politicians and the cadre’ of accountants and attorneys must be 100% neutered and powerless to dream up and approve special tax gimmicks for a privileged few. The KEY idea is one stemming out of bankruptcy laws – CASH IS KING! If you have no way to raise the cash to pay for your choices – you are broke!

    True “conservatism” [that phonies like Glen Beck, Rush Limbaugh and Michele Bachmann avoid] is that each person and entity should stand on their own and should be neither ‘incentivized’ or penalized by the government for their choices in how they spend their monies, nor for the sources of their cash revenue inflow streams. KEEP IT SIMPLE & SAFE = K.I.S.S. Back in the 1990s I thought that a tax on cash inflows of 2% to 3% may be needed to meet all GOVERNMENT needs. I instinctively felt that a higher rate would foster an underground economy. Imagine how I felt after I did the math calculation shown in my rebuttal and I had discovered the low percentage needed!

    When I had these two simple truths admitted by two government sources, it was an easy solve! $3,000,000,000,000 x 250 business days = $750,000,000,000,000 [that’s right - $750 trillion] Let’s see – 1% of that is $7.5 trillion! Way too much! One half of that (which is a measly ½ of 1%) would be $3 – ¾ trillion and still way over the $2 trillion the IRS then bragged about collecting! Oh my God! One half of that (which is a measly ¼ of 1%) could yield almost $2 trillion (or $1 - 7/8 trillion - $1,875,000,000,000!) Hey – there must be at least $125 billion of fat and waste they could find and trim out of the Federal budgets? Now they admit to much more than that on TV!

    Every entity that did any financial transactions here would pay the same rate on monies that would be required to be deposited through the USA banking system before leaving the country. Every Arab-OPEC transaction! Every Communist Chinese transaction on stuff we imported while we exported our manufacturing jobs to them and our people wallow in self-hatred, now on unemployment.

    Everybody and everything! NO EXCEPTIONS! NO EXEMPTIONS! NO DEDUCTIONS! What is not to like about this? Want to sell some $300,000 of stocks on which you made a $200,000 profit? Pay ¼ of 1% on the $300,000 sales proceeds received – no need to worry whether you held it for one day or for 20 years. Say your Grandma died and left you $30 million? No more death tax! Pay ¼ of 1% on the $30million – or $75,000! Hey there you Republicans – what is bad or wrong about that? You want it tax-free?

    Get over your silly idea of making corporations into Gods that you genuflect to as your masters – and the idea they should not have to pay any US Federal taxes because they create jobs – albeit no longer in the IOUSA, but instead in some undeveloped corner of the world, where workers can be freely abused and paid next to nothing.

    After eight years of misfeasance and malfeasance perpetrated by one George Walker Bush (“W”), including two unfunded wars in Iraq and Afghanistan (one being a fraud and a scam on the American people with fictional claims of weapons of mass destruction),

    and after the unfunded “doughnut hole” Rx drug benefits approve by Bush’s Republicrat Congress, and after “W” was handed an operating surplus by Clinton that he turned into a GIGANTIC deficit with his side-kick – Cheney – proclaiming: “Deficits don’t matter”,

    now it is likely that $2 trillion per year are a trifle – now we should require perhaps $3 or even $4 trillion in annual Federal revenues!

  • Report this Comment On August 02, 2011, at 7:00 PM, mhonarvar wrote:

    20% on national defense.....lower that to 10% (by cancelling/ bringing down spending on the next generation of "super weapons" ) and there you go!

  • Report this Comment On August 04, 2011, at 3:51 AM, happybeachbum wrote:

    The comments on this message board scare me to death. The scarest thing is that all of you can vote one or more times depending on the state you live in. Our leaders voted to raise our countries debt by 2.5 trillion dollars (plus or minus a couple hundred billion depending on who you believe) over the next 18 months. That is 1.7 trillion dollars a year (plus or minus a hundred billion or so). This number is scheduled to increase each year, but for fun let's say it stays at "only" 1.7 trillion a year. That means the debt while Obama is in office will go up by more than 9 trillion dollars in addition to the 4 trillion that he has already increased the debt.

    And you people are crying about all the budget cuts we are making. Read the bill; we are not cutting squat. Which is what you will be doing, because in a few years very few people will be able to afford indoor plumbing. I am already too old to squat so if I am around I will just lean against a tree if any are left.

    I work with a lot of young people and the majority of the ones who are eager to work, save money and get ahead are from other countries. We are selling our country and our young people down the river (you know the one where you don't have a paddle) and assuring that there will be no way to have jobs or a safety net for them . I am talking about your kids here and definitely your grandkids. I hope you are demanding that they learn Mandrin or Russian or Spanish so they can speak to their bosses if they are lucky enough to have a job or apply for welfare if they don't.

  • Report this Comment On August 04, 2011, at 3:57 AM, happybeachbum wrote:

    Sorry about the spelling, my eyes aren't what they used to be. I meant "country's debt" and "on whom you believe"

  • Report this Comment On August 04, 2011, at 4:18 AM, MichaelDSimms wrote:

    Taxes do not have to be raised and should not be. Restructuring the tax code and closing loopholes and going to a flat tax would be the choice of intelligent people. That way everyone pays not just the upper 52%. And if someone is receiving a welfare check and sees it reduced at say 15% it gives them more incentive to go look for a job. SS and Medicare benefits should be reduced by at least 5-10% across the board. There simply isn't the income to provide the same benefits as before as the country ages. Most people will be poorer, some will return to work to supplement their income. Our living standards will be lower for most people. Only other choice is going the way of Greece and Europe who are in a very bad way and getting worse by the day.

  • Report this Comment On August 06, 2011, at 8:09 AM, zgriner wrote:

    I am sick and tired of reading article after article showing us all these relative numbers.

    Where are the practical facts?

    The Average American Family owes about $150,000 in US Debt. Even if the budget were balanced now and forever, it would take us 50 years to pay off the debt and 15-20% of the budget would go to interest.

Add your comment.

DocumentId: 1529577, ~/Articles/ArticleHandler.aspx, 4/20/2014 4:59:46 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement