Friday, October 23, 2020
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Who’s Sen. Mark Warner Listening to on Deficit Reduction?

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DSC_0825.NEFPolls show Americans favor closing the deficit via tax hikes on the wealthy and eliminating subsidies for the oil & gas industry. While "cutting spending" polls well as an abstract concept, as soon as you poll cutting actual programs like Social Security, Medicaid & Medicare, and education, those cuts become wildly unpopular.

But reading the guest list from Sen. Mark Warner's party this week, you have to wonder if Sen. Warner's listening to a representative sample of Americans:

On Wednesday night under a tent at his mansion in northern Virginia, Mr. Warner brought together for a buffet dinner about 60 people, including roughly equal numbers of Democrats and Republicans from the Senate and House, corporate executives and economic and financial leaders including Alan Greenspan, the former Federal Reserve chairman, and David Stockman, the first budget director to President Ronald Reagan. [...]

Among the participants were the chief executives of PepsiCo, Aetna and BlackRock; two members of the joint deficit committee, Senator Rob Portman, Republican of Ohio, and Representative Chris Van Hollen, Democrat of Maryland, and five of the six members of the Gang of Six, including Senator Tom Coburn of Oklahoma, the conservative Republican whose wavering delayed the group's agreement on a $4 trillion deficit-reduction package of spending cuts and revenue increases.

Along with Mr. Chambliss was Georgia's other Republican senator, Johnny Isakson. Also there were Representative Steny Hoyer of Maryland, the No. 2 Democrat in the House; Senators Dianne Feinstein of California and Michael Bennet of Colorado, both Democrats; Frank Keating, the former Republican governor of Oklahoma who now heads the American Bankers Association; the former labor leader Andy Stern; Douglas Elmendorf, the director of the Congressional Budget Office; John Rother, a former longtime legislative director at the A.A.R.P., and Erskine Bowles, the former chief of staff to President Bill Clinton who co-chaired Mr. Obama's debt-reduction commission last year.

Obviously we don't know the whole guest list. But things like Sen. Warner's preference for cutting programs for disabled seniors while preserving subsidies for Big Oil make more sense when you see who gets invited into his tent.

Mark Warner Thinks Disabled Seniors, Not Big Oil, Should Sacrifice to...

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Mark WarnerSen. Mark Warner's "Gang of Six" plan would've repealed the CLASS Act, part of the 2010 health reform law designed to help seniors who need help with daily tasks such as bathing and dressing. Who does Sen. Warner think should not be asked to sacrifice? Wildly-profitable oil companies:
On Thursday, a handful of Senators wrote a letter (PDF) to President Obama that stated, "as you continue your negotiations, we urge you to remember the oil and gas industry is part of the solution." Or, in other words, don't single out big oil companies and their taxpayer subsidies as a way to reduce the deficit.

These nine Senators-six Republicans and three Democrats-have received $7.1 million in oil and gas industry cash during their career in Congress, according to our analysis of data from the Center for Responsive Politics. [...]

Ending oil subsidies didn't make it into the tentative default deal reached over the weekend, but as Congress looks to create a commission to enact further deficit reduction measures, it'll be important to watch what influence Big Oil and other industries will exert on the process.

Sen. Warner himself has received a smaller amount of oil & gas money relative to his oil state co-signers. But it's interesting to note the letter he signed onto tries to pass off as fact the oil & gas industry's claim to be "supporting over 9 million jobs." Just 2 years ago, the oil & gas industry was only claiming to employ less than 1.8 million people & support 4 million more. So either the oil & gas industry's share of jobs has shot up by more than a third in the midst of nationwide stagnant employment, or they now feel the need to fudge their numbers because clean energy employs more than 2.7 million Americans, 50% more than the oil & gas industry had claimed 2 years ago.

After his Gang of Six failed, Sen. Warner now wants a seat on the debt commission. Our Democratic leaders shouldn't pick someone who'll be fighting to protect Big Oil subsidies while trying to slash our social safety net.

“Super Congress” — Gang of Six End Run to Fast-Track Work...

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(Note: Recently, I wrote a comment to the headlines/clips concerning the implications of a part of the Gang of Six plan.  But it is so important that I will expand and front page a separate discussion of it.)

No president, and certainly not the Constitution, has given a subcommittee of twelve absolute control over much of Americans' financial futures, but the Peter Peterson (Koch-funded) Americans-for-Prosperity-infused Congress is trying to move like a tidal wave to accomplish that now. After reading the Gang of Six talking points (in lieu of a real plan) that was leaked to the press, I warned readers of this problem . But don't take my word for it.  Ryan Grim describes this.  Here is just a portion of Grimm's article:

The Devil in the Details

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So, is this dysfunctional Congress actually trying to deal with the second structural deficit in thirty years engineered by a Republican administration? Thirty or so years ago, Ronald Reagan came into office during a deep recession and pushed through huge tax cuts that ultimately gave us the first such deficit. That one didn't get fixed until the Clinton administration. In 2001 Republican George W. Bush created the same situation, using a fairly mild recession to undo the tax reforms of the Clinton era, thus wiping out any hope of continuing surpluses that were meant to prepare for the retirement and medical costs of the Baby Boomers.

We wouldn't even have this second structural deficit if George W. Bush had not given us those huge tax cuts and followed that with two wars that were unpaid for, a Medicare prescription benefit that was unpaid for, and the creation of a new cabinet department, Homeland Security, that was unpaid for. In fact, the easiest way to solve our problem, some say, is to allow all the Bush tax rates to expire in 2013, end both wars, and find a way to pay for that Medicare benefit, while reining in health care costs.

Structural deficits exist when the budget of a government cannot reach balance, even if the economy is operating at full potential.  Right now, the huge deficits we are piling up aren't all  that bad because interest rates are very low and acting too fast will harm the slow recovery; however, that situation won't last much longer. Coming to terms with the federal structural deficit has to be done fairly soon for our economic health.

The question is whether Sen. Mark Warner and the so-called "Gang of Six" have a plan that will work without making the working and middle classes bear all the burden of undoing the Bush excess. It appears that they basically took last year's presidential deficit commission report and made that the plan they will push. One would think that they at least do concede that tax revenues have to be raised at the same time as expenditures must be cut. However, the fine print in their short outline makes that unclear.  The most heated arguments are sure to come from deciding what revenue is raised and what programs get cut. Since the "Gang of Six" released just a three-page outline of their proposal, we are left to wonder what devils lurk in the details. In that summary ,  I found a couple of obvious hidden devils:

Gang of Five Still Alive?

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Senator Coburn's time-out threatens cooperation from the other Republican members. The hardliner's membership provides cover. 24/7 scrutiny of political orthodoxy leaves little tolerance for compromise. Senator Warner says he believes the Gang of Six "will work." It won't if the impractical ideology of the no-tax nuts drives the debate.

While the debt and deficit headline the public debate, the operational debate is not about the debt. Last Sunday Senator Warner strayed from the power points distinguishing budget expenditures from tax expenditures while he addressed Democrats gathered in Virginia Beach. Calling out Paul Ryan's budget proposals, Warner talked about the efforts to dismantle "programs that have been contracts between the American government and its people." All of the discussion, Warner pointed out, has centered around 12% of the Federal budget. That 12% includes Head Start, Pell Grants, investments in education, roads, rail, and mass transit, energy programs that would end the dependency on foreign sources of energy (an indirect subsidy of those attacking us), law enforcement and all of the things that a responsible government does to keep the nation competitive and secure.

"Mr. Ryan's budget would take that 12 cents and make it 4 cents over the next 25 or 30 years."

Senate’s “Gang of Six”: Keep Taxes Low on Rich by Punishing...

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The U.S. Senate's "Gang of Six" plans to fix the deficit created by the disastrous Bush-Cheney economic policies and $400 billion per year tax cuts by ... making people who are currently young work longer before they're allowed to retire on Social Security & Medicare, and cutting Medicaid to the disabled & needy. How fair does that seem to you?

In the wake of President Obama's right-leaning fiscal commission, we now have the Senate's solidly-right Gang of Six. While the Democrats range from progressive to conservative (Illinois' Dick Durbin, Virginia's Mark Warner & North Dakota's Kent Conrad) leaving them with a moderate middle, the group's Republicans are all far right conservatives (Georgia's Saxby Chambliss, Oklahoma's Tom Coburn & Idaho's Mike Crapo).

So is it any surprise that while some good ideas are coming out of the Gang of Six talks - trimming wasteful defense spending, cutting subsidies to gigantic food corporations, trimming the regressive & sprawl-inducing mortgage deduction - they're being overshadowed by some truly bad ones?

While the emerging proposal by the so-called Gang of Six won't increase tax rates, [Mark Warner] said it will include scrapping some tax breaks and limiting others, such as shrinking to $500,000 from $1 million the size of mortgages on which interest payments can be written off or scaling back deductions for charitable giving.

Details of the plan -- still under negotiation and being drafted for release as early as next week, according to a person familiar with the talks -- are scarce, given the group's secretive discussions. Yet Warner said it will involve spending cuts on health care, defense, agriculture and other domestic programs, along with changes to Medicare, Medicaid and Social Security.

Previous reporting has indicated we can expect those changes to Social Security & Medicare to include raising the retirement age for future retirees, which amounts to a steep cut in benefits. And it would leave workers with precious little actual retirement - if the retirement age is raised to 70, with a life expectancy of 75 for the average American male, someone like me could expect just five "golden years." MoveOn.org will drive home that point today with a "Don't Work Us Till We Die" event at 11:45am at Sen. Warner's Norfolk office.

So why are these life-altering cuts being greeted with indifference?