by Floyd and Mary Beth Brown
The media frenzy over Republican Senators and Barack Obama making nice over the debt ceiling crisis exposes for all Americans to see the extent to which both parties are aligned with Wall Street interests, and against the interests of Main Street and small business. The subject of this latest bipartisan love fest is the Gang of Six plan.
Americans want reform. The Republican majority in the House of Representatives was swept into office by promising reform. The Gang of Six solution is the antithesis of reform.
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Supposedly it offers the “balanced approach” of which Obama rambles on about endlessly. But in reality, the Gang of Six is one-sided. It offers only vague language about spending cuts. At best the Gang of Six plan might cut $500 billion, and even these cuts cannot be guaranteed. In real terms, government would continue to grow.
Also the Gang of Six solution would dramatically increase taxes. It calls upon the Senate Finance Committee to craft a tax reform plan that would actually increase taxes by $2.3 trillion over a 10 year period. Some members even cynically call it a tax reduction by using a baseline that everyone knows is phony. This is a baseline that predicts all of the middle class tax cuts signed into law by President Bush was repealed.
All of this because rejecting the debt ceiling increase would require the U.S. government to right size itself and begin a pay as you go diet.
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The secret they don’t want you to know is that the U.S. government is currently taking in over $200 billion a month. This could easily service the debt and forestall any default. It could pay current Social Security and Medicare bills. What would have to be cut is discretionary spending, and Congress doesn’t like this idea.
Gone would be money Obama wants to expand the EPA. Gone would be ethanol subsidies. Gone would be the billions poured into universities and colleges to subsidize the “intelligentsia.” Foreign aid money wouldn’t gush out. The cuts would hurt many in government employment, but default would never have to result, and grandma would still get her Social Security.
Neither party cares much about anything other than perpetuating their power. This discretionary spending money is the key tool they use to stay in power.
The Gang of Six deal is all about kicking tough budget decisions down the road and keeping the Ponzi scheme going for a few more years in the hope that the long suffering American people won’t notice that they are indentured servants to a system that is literally robbing them.
Americans for the last 60 years have believed that Congress was saving the money sent in as FICA premiums for old age. They have also believed that they were paying billions in Medicare insurance premiums so that once they turned 65, they wouldn’t have to worry about scrambling for medical insurance in their retirement years.
The problem with this perception is that it was a gigantic fraud foisted on the public while the permanent establishment in Washington over spent. Programs in Washington were started to placate or buy off almost every group of voters from farmers to business owners.
When demographics worked in their favor with more young than old, the Congress just stole the pension money and spent it. Business was at the head of the gravy train, benefiting on everything from financing for the sale of Boeing airplanes to protecting bankers from going broke when their complex finance schemes ended in disaster.
At the top of the benefits pile-up is government workers. These workers have premium wages, premium benefits and premium pensions. And as USA Today pointed out this week, they are more at risk from death than from layoff once they get a coveted job with the US Government.
But now the demographic tide has turned. All of the Baby Boomers born after World War II want to retire. They all paid in their entire working lives. Whoops! The cupboard is bare, and the only way to pay all their claims on the vanished money is to borrow, borrow, and borrow some more.
But most cynical in the Gang of Six proposal is what is called the “chained” CPI. This is code for changing the way Social Security checks will increase with inflation. High inflation, together with the Gang of Six proposals, will make seniors poorer, while protecting the discretionary spending from reform.
Remember, the key word is power. This discretionary spending money is the key tool they use to stay in power.