The President said the American Jobs Act would be paid by the already agreed upon trillion dollar decrease (in a decade) in spending and the additional $1.5 trillion to be found by Christmas that was passed with the August budget. The President said he would be proposing a more ambitious deficit plan (more aggressive spending cuts) to fully cover the Act and stabilize our debt in the long run. He specifically stated that there would be modest cuts in Medicare and Medicaid and tax reform for the wealthy to pay their fair share which included eliminating the write-off for corporate jets.
Prior to the President’s speech ABC got a panel of 6 experts (Chad Stone, Dean Baker, Diane Swonk, Martin Regalia, Mohamed El-Erian, and Susan Wachter) together to say what they think needs to be done to fix things. The panel said: 1 – end partisan bickering, 2 – retrain our workers, 3 – allow drilling in the Gulf of Mexico, 4 – extend unemployment benefits, and 5 – hire extra entry level workers.
The President was in line with the ABC panel on retraining workers and extending unemployment benefits. I heard nothing about allowing drilling in the Gulf of Mexico which would create jobs but that doesn’t mean it isn’t part of the plan. The President has no control over ending partisan bickering or companies hiring extra entry level workers.
I do think that paying for the Jobs Act via the already earmarked reduction money negates the reduction in the budget so to keep the commitment and pay for the plan a tax increase is necessary. I also think corporate jets, since they can be used for business and pleasure, should be treated like farm equipment and vehicles used by delivery companies or people for medical purchases. They should get a write-off based on the percentage used for business versus pleasure. And if we are going to become more self reliant then we need to expand on manufacturing and skilled jobs like plumbers so we need to utilize trade schools more. We don’t need more Wall Street people pushing other people’s money around the world; we do need more doctors, nurses, and trade people.
I’m not in favor of reducing payroll taxes for Social Security (SS) and Medicare as employees’ investment in these programs will be reduced and thus reduce their benefits when it’s time for them. Additionally it will, as money was never set aside to earn interest, reduce the funds available to those currently collecting. This needs to be corrected not eliminated; the government needs to find a way for interest to be earned to the funds collected. I do realize this cannot be immediately done but putting even 10% of the money collected aside would be a step in the right direction. During the August budget crisis I heard that raising the age of SS to 68 would save $70 billion and raising the Medicare age would save $124 billion. I also heard that reducing annual SS increases would save $70 billion but when it was reported that a SS cost of living would be coming in January 2012 it would cost $26 billion; quite a difference.
To address the modest cuts in Medicare, the President came out with a Deficit Reduction Plan calling for $248 billion in Medicare cuts, mostly directed at higher income seniors; he said either reduced benefits or more costs. This is probably fair for now because rich people haven’t been paying their fair share of taxes for quite a while. Once the tax rates are fair then I think this is no longer necessary. IRS said that if millionaires and billionaires paid the highest tax rate of 35% that we would raise $37 billion a year; the White House is not making such a proposal right now which I agree with; but I’d like to see increases used to make SS self-sufficient. A Congressional report recently came out saying drug abusers are exploiting Medicare prescription benefits to score pain killers. I think this is a doctor issue that should be looked at along with all the fraud that’s been reported.
I would like to see some of the infrastructure money going to rural roads as in some areas they’re not put in unless you’re in some way connected with the local commission or board. Many rural Americans damage their cars mostly in winter and can’t get to work or afford to get them fixed.
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