Rivlin/Domenici plan: No socialist paradise but far better than Simpson/Bowles

[Kurt_and_Hunter]

Unlike the Simpson/Bowles plan, this is not a total joke. Even where I disagree on the solutions, at least it seems to be conceived to address actual problems on planet Earth. Interesting. The casual "oh yeah, to get the ball rolling let's have a huge stimulus in the form of a payroll tax holiday" shows that they're at least acknowledging the current situation.

Just the summary of their proposals is 8 paragraphs, so this excerpt is quite incomplete. Best to visit the link.

Reclaiming our future
By Pete V. Domenici and Alice M. Rivlin
Wednesday, November 17, 2010

. . .

To ensure a more robust recovery, we propose a one-year "payroll tax holiday" for 2011, suspending Social Security payroll taxes for employers and employees. We also would phase in the steps to reduce deficits and debt gradually beginning in 2012, so the economy will be strong enough to absorb them.

We would stabilize the debt held by the public at less than 60 percent of gross domestic product, an internationally recognized standard; reduce annual deficits to manageable levels; and balance the "primary" budget (everything other than interest payments) by 2014.

We would dramatically simplify the tax system, establishing individual tax rates of 15 and 27 percent (from the current high of 35), cutting the corporate tax rate to 27 percent (from 35 today), ending most deductions and credits while simplifying the rest, and ensuring that nearly 90 million households no longer have to file returns. To reduce the debt, we would supplement our spending cuts with a 6.5 percent "debt-reduction sales tax."

We would strengthen Social Security so it can pay benefits for the next 75 years by gradually raising the amount of wages subject to payroll taxes; slightly reducing the growth in benefits for the top 25 percent of beneficiaries; raising the minimum benefit for long-term, low-wage workers; indexing benefits to life expectancy; and changing the calculation of cost-of-living adjustments to better reflect inflation. We would not raise the age at which senior citizens can begin receiving benefits

. . .

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/16/AR2010111606125.html?wpisrc=nl_politics

[Vinnie From Indy]

1. The second act is starting

One thing the extremist right wing does well is start their negotiating positions in the correct manner. The catfood commission started with something so outrageous that ANYTHING proposed after would seem sane. The point is that this second proposal by "reasonable" people is still a piece of shit money grab from the poorest in our society. It is a scam that will probably work.

As an aside, this is how Pres. Obama should have done HCR if he had not already made secret deals with industry.

[JackRiddler]

2. The technique is called the Overton Window.

Look it up.

Simpson and Bowles leak their draft to legitimate a previously unthinkable extreme. Rivlin/Domenici then looks reasonable as a compromise that you would have never otherwise embraced.

[RaleighNCDUer]

3. National sales tax? Seriously?

And wouldn't "indexing benefits to life expectancy" effectively reduce benefits?

The ONE thing they suggest, and they are the first I've seen to say it publicly, that would make a positive difference is raising the cap - but it is still based on 'wages', and the people with REAL money don't collect wages, not for the vast bulk of their income.

Sorry, i don't see this as any improvement.