Tom Coburn, Back in Black

[Bull Moose Base]

http://thehill.com/blogs/on-the-money/budget/172189-coburn-rejoins-gang-of-six-backs-37t-deficit-reduction-plan

Though would they be able to get that plan through the house?

Not after this, they can't:

You must be logged in to read this quote.

http://www.washingtonpost.com/business/economy/gang-of-six-budget-cutting-plan-gains-momentum-in-senate/2011/07/19/gIQANkdzNI_story.html?hpid=z1

[ilikeverin]

You must be logged in to read this quote.

Putting aside the dice loader there, that's a pretty effective slip in of the knife after trashing the man for allegedly hating established funding for the entirety of the range of the Social Sciences.  F, the social "sciences" are the only field of human knowledge where I feel I am worth even a faint damn, and if that is all junk, then it is time that I go up to the mountain top nude and freeze to death.

And I ain't taking that particular hike in that particular sartorial presentation. At least, not yet. 

Not just allegedly.  Take a look at page 53 of this document.  He's proposing eliminating the "Social, Behavioral, and Economics Directorate" of the NSF; in other words, NSF-based social sciences funding.  As he says, there are other sources of national funding.  The main professor I work under has two NIH grants, for example, in addition to her NSF one (which is the one I'm funded under, incidentally ).  Yet the sources he cites aren't at all appropriate for a lot of the work done in the social sciences.  Linguistics, for example, sometimes falls under "Humanities" but often doesn't; psychology is unclear, unless it's specifically with regard to educational psychology or clinical psychology; political science, sociology, and anthropology, well, I haven't the faintest clue.

[opebo]

Do some of you understand now why I have - and have always had - a soft spot for Coburn?  The man has courage and honesty, and is willing to be banned from the fraternity, and sit alone in the cafeteria. In a word, he is one of the few to say, without Bowdlerizing it, that the emperor has no clothes. We need more like him - in both parties.   

Just because one poor-killer offends the other poor-killers doesn't change the fact that his intent is homicidal.

[Gustaf]

Apart from his social policy craziness I've also always had a bit of sympathy for Coburn. He tends to ask the right questions when it comes to fiscal policy and this seems to be an example of it.

[courts]

     I would never expect Coburn to entertain tax increases.

Coburn already showed his true colors when he voted for TARP.

[Mechaman]

     I would never expect Coburn to entertain tax increases.

Coburn already showed his true colors when he voted for TARP.

^^^^
This.

I always laugh whenever somebody says something like "Coburn is a true fiscal conservative who has the nads to buck even his own party!!!!" when the man voted for TARP and has so far (besides cutting one aircraft carrier and one other military ship, lol) hasn't supported making significant military cuts.  Seriously.
Propose 40% cuts to the military budget and see how quickly Coburn turns into an economic statist.

[King]

     I would never expect Coburn to entertain tax increases.

Coburn already showed his true colors when he voted for TARP.

^^^^
This.

I always laugh whenever somebody says something like "Coburn is a true fiscal conservative who has the nads to buck even his own party!!!!" when the man voted for TARP and has so far (besides cutting one aircraft carrier and one other military ship, lol) hasn't supported making significant military cuts.  Seriously.
Propose 40% cuts to the military budget and see how quickly Coburn turns into an economic statist.

So Coburn is a Dixiecrat.

[Marokai Backbeat]

The thing is, the deficit, while it does need to be shrunk, does not need to be zero.  There's no pressing need to balance the budget (though shrinking the deficit down to a more manageable size is a good thing).  I give Coburn more credit than most for having the intellectual honesty of not concealing for a second how painful his proposal is.  Tax hikes (shifting people into higher brackets, no less!) coupled with raising the retirement age to 70 and cutting student aid etc. is a brutal, brutal package.  It's also 10 times more honest with the American people about what balancing the budget means than, say, Paul Ryan.  Coburn's proposal isn't anything I'd support, but it's a non-gimmicky serious proposal to dealing with this problem, which is better than many people on either side of the aisle are doing.  Say what you will about Tom Coburn, the man does not demagogue.

I don't understand, though, this notion that any deficit reduction deal needs to include the maximum amount of pain possible for the maximum amount of people. So many of the cuts just seems trivial in the grand scheme of things.

Call this notion childish or idealistic, but shouldn't government's job be to avoid pain for it's citizens when at all possible? Instead of finding a number of big ways we could reduce the deficit, the approach just seems to be grab a bunch of smaller programs or funding sources and axe them, instead of paying more attention to taxes, or defense spending, or any other number of big sources of revenue. What does Social Security have to do with the deficit? And didn't we just cut 500 billion from Medicare a year and ahalf ago? It seems shortsighted to me, if not just outright sadistic, to throw the brunt of the burden onto poor people, the elderly, etc, when those people cannot handle these expenses on their own, the reason so many of the programs were created in the first place.

Sure, it might save us money in the short term, but at some point social conditions will deteriorate to the point that the government will just have to spend more to help them out of a problem of the cuts' own creation. (Unless deficit hawks are willing to kill off people for the sake of our bottom line. Though I know people like to make fun of those who accuse deficit hawks of "killing poors.")

[The Vorlon]

 And didn't we just cut 500 billion from Medicare a year and ahalf ago?

ObamaCare is magic, you insure 35 million additional people, increase the number of services provided, eliminate disqualification for pre-existing conditions, and you save 500 billion dollars.

Haven't you been reading your DNC mailers?

[Gustaf]

The thing is, the deficit, while it does need to be shrunk, does not need to be zero.  There's no pressing need to balance the budget (though shrinking the deficit down to a more manageable size is a good thing).  I give Coburn more credit than most for having the intellectual honesty of not concealing for a second how painful his proposal is.  Tax hikes (shifting people into higher brackets, no less!) coupled with raising the retirement age to 70 and cutting student aid etc. is a brutal, brutal package.  It's also 10 times more honest with the American people about what balancing the budget means than, say, Paul Ryan.  Coburn's proposal isn't anything I'd support, but it's a non-gimmicky serious proposal to dealing with this problem, which is better than many people on either side of the aisle are doing.  Say what you will about Tom Coburn, the man does not demagogue.

I don't understand, though, this notion that any deficit reduction deal needs to include the maximum amount of pain possible for the maximum amount of people. So many of the cuts just seems trivial in the grand scheme of things.

Call this notion childish or idealistic, but shouldn't government's job be to avoid pain for it's citizens when at all possible? Instead of finding a number of big ways we could reduce the deficit, the approach just seems to be grab a bunch of smaller programs or funding sources and axe them, instead of paying more attention to taxes, or defense spending, or any other number of big sources of revenue. What does Social Security have to do with the deficit? And didn't we just cut 500 billion from Medicare a year and ahalf ago? It seems shortsighted to me, if not just outright sadistic, to throw the brunt of the burden onto poor people, the elderly, etc, when those people cannot handle these expenses on their own, the reason so many of the programs were created in the first place.

Sure, it might save us money in the short term, but at some point social conditions will deteriorate to the point that the government will just have to spend more to help them out of a problem of the cuts' own creation. (Unless deficit hawks are willing to kill off people for the sake of our bottom line. Though I know people like to make fun of those who accuse deficit hawks of "killing poors.")

Why wouldn't Social Security have something to do with the deficit?

I'd say there are two important steps here. The first is that the American electorate does not want to solve this problem mainly by raising taxes, or put alternatively, they do not want to support a state of the current size.

Thus, the deficit must be fixed via spending cuts. The second step is then that this is always going to hurt poor people no matter how you slice it. At least with a deficit of this size.

[Marokai Backbeat]

Why wouldn't Social Security have something to do with the deficit?

Forgive me if I have this totally wrong, but as far as I understand it, Social Security doesn't actually contribute to the deficit. It's entirely self-financed, and is restricted from drawing money from outside it's own funds when it can't completely pay it's bills. From what I know of the program, it's literally forbidden by law from contributing to the deficit.

That's why it's so baffling to me that every single deficit/debt discussion seems to include Social Security as if it's some sort of big contributor to the debt. From everything I know, it's totally not at all. Granted, it has a funding problem of it's own, but when it can't pay its bills, it just scales back what it pays out in benefits worst case scenario. It's still not actually part of the debt as we're debating it.

[Associate Justice PiT]

Why wouldn't Social Security have something to do with the deficit?

Forgive me if I have this totally wrong, but as far as I understand it, Social Security doesn't actually contribute to the deficit. It's entirely self-financed, and is restricted from drawing money from outside it's own funds when it can't completely pay it's bills. From what I know of the program, it's literally forbidden by law from contributing to the deficit.

That's why it's so baffling to me that every single deficit/debt discussion seems to include Social Security as if it's some sort of big contributor to the debt. From everything I know, it's totally not at all. Granted, it has a funding problem of it's own, but when it can't pay its bills, it just scales back what it pays out in benefits worst case scenario. It's still not actually part of the debt as we're debating it.

     But is it forbidden to use the Social Security tax to pay off the debt once benefit obligations have been fulfilled? If not, then setting up a system where Social Security taxes significantly outstrip benefits would have an obviously positive effect on the deficit.

[Marokai Backbeat]

Why wouldn't Social Security have something to do with the deficit?

Forgive me if I have this totally wrong, but as far as I understand it, Social Security doesn't actually contribute to the deficit. It's entirely self-financed, and is restricted from drawing money from outside it's own funds when it can't completely pay it's bills. From what I know of the program, it's literally forbidden by law from contributing to the deficit.

That's why it's so baffling to me that every single deficit/debt discussion seems to include Social Security as if it's some sort of big contributor to the debt. From everything I know, it's totally not at all. Granted, it has a funding problem of it's own, but when it can't pay its bills, it just scales back what it pays out in benefits worst case scenario. It's still not actually part of the debt as we're debating it.

     But is it forbidden to use the Social Security tax to pay off the debt once benefit obligations have been fulfilled? If not, then setting up a system where Social Security taxes significantly outstrip benefits would have an obviously positive effect on the deficit.

I hate exposing my lack of understanding of the machinations of Social Security here, but that's where it gets sort of hairy for me. I know that Social Security has built up its own surplus of funds over the years though, so I can't imagine that every dime of extra cash goes straight into the deficit. I suppose you could very indirectly connect the two, but Social Security still doesn't actively contribute to the deficit either way. Blaming Social Security for anything is just a scapegoat for lack of revenues elsewhere.

[Associate Justice PiT]

Why wouldn't Social Security have something to do with the deficit?

Forgive me if I have this totally wrong, but as far as I understand it, Social Security doesn't actually contribute to the deficit. It's entirely self-financed, and is restricted from drawing money from outside it's own funds when it can't completely pay it's bills. From what I know of the program, it's literally forbidden by law from contributing to the deficit.

That's why it's so baffling to me that every single deficit/debt discussion seems to include Social Security as if it's some sort of big contributor to the debt. From everything I know, it's totally not at all. Granted, it has a funding problem of it's own, but when it can't pay its bills, it just scales back what it pays out in benefits worst case scenario. It's still not actually part of the debt as we're debating it.

     But is it forbidden to use the Social Security tax to pay off the debt once benefit obligations have been fulfilled? If not, then setting up a system where Social Security taxes significantly outstrip benefits would have an obviously positive effect on the deficit.

I hate exposing my lack of understanding of the machinations of Social Security here, but that's where it gets sort of hairy for me. I know that Social Security has built up its own surplus of funds over the years though, so I can't imagine that every dime of extra cash goes straight into the deficit. I suppose you could very indirectly connect the two, but Social Security still doesn't actively contribute to the deficit either way. Blaming Social Security for anything is just a scapegoat for lack of revenues elsewhere.

     It is also an easy target to talk about due to its size. Just looking at the pie chart makes it look like the 800-pound gorilla in the room. Besides, even if sending extra Social Security Tax revenue to the deficit is strictly forbidden, you are right that there are ways to connect Social Security to the deficit. Even if it doesn't actually contribute to the deficit in a structural sense, this issue cannot be easily extricated from the debt debate for a variety of reasons.

[Marokai Backbeat]

It's also an easy target just purely for ideological reasons. There are quite alot of people who just don't like the idea of Social Security, and our deficit (primarily caused by wars and ill advised tax cuts) is the perfect excuse to try to gut it while they have the chance.

[Gustaf]

Why wouldn't Social Security have something to do with the deficit?

Forgive me if I have this totally wrong, but as far as I understand it, Social Security doesn't actually contribute to the deficit. It's entirely self-financed, and is restricted from drawing money from outside it's own funds when it can't completely pay it's bills. From what I know of the program, it's literally forbidden by law from contributing to the deficit.

That's why it's so baffling to me that every single deficit/debt discussion seems to include Social Security as if it's some sort of big contributor to the debt. From everything I know, it's totally not at all. Granted, it has a funding problem of it's own, but when it can't pay its bills, it just scales back what it pays out in benefits worst case scenario. It's still not actually part of the debt as we're debating it.

In many cases, what is techinically true is not politically true. And I'm guessing that it will be impossible to self-finance Social Security in the future. Basically, if you have to increase taxes to keep it funded you would have to cut other taxes to compensate and in that way it will  be linked to the deficit.

In Sweden it's also supposed to be separate but that doesn't prevent politicians from meddling with it when it's required.

[Mr. Morden]

Social Security is separate from the rest of the budget on paper, but in practice Congress doesn't really treat it that way.  SS has run a surplus for years, but has actually started running a deficit just this year, and will continue to run deficits for decades into the future because of the demographic crunch.  The surpluses that it ran in the past were simply used to fund general government expenses, so Congress hasn't treated it as though it was walled off from the rest of the budget, even though it's supposed to be.

Whether Congress actually erects a firewall between SS and the rest of the budget in the future or continues to treat it interchangeably with the rest of the government is a purely political decision.

[Torie]

Creating a fire wall to my mind serves no useful purpose.  At the end of the day, government needs to meet all its obligations.  Dividing them between two promissory notes, rather than folding them all into one, does not change the balance sheet's bottom line numbers.

[Brittain33]

Voting for TARP is a good thing.

[Brittain33]

 And didn't we just cut 500 billion from Medicare a year and ahalf ago?

... you save 500 billion dollars.

That's not what he wrote. Precision is important in questions and phrasing, otherwise you can get misleading answers or the wrong conversation.

[Queen Mum Inks.LWC]

I've always liked Coburn... and he's right in that we can't just keep cutting taxes.

[Gustaf]

 And didn't we just cut 500 billion from Medicare a year and ahalf ago?

... you save 500 billion dollars.

That's not what he wrote. Precision is important in questions and phrasing, otherwise you can get misleading answers or the wrong conversation.

I'm not sure I follow, but I think the Vorlon is implying that those 500 billion weren't actually saved because it was impossible?

[Brittain33]

 And didn't we just cut 500 billion from Medicare a year and ahalf ago?

... you save 500 billion dollars.

That's not what he wrote. Precision is important in questions and phrasing, otherwise you can get misleading answers or the wrong conversation.

I'm not sure I follow, but I think the Vorlon is implying that those 500 billion weren't actually saved because it was impossible?

He's stating that Obama claimed to save $500 billion through his health care plan as a whole and calling bullsh**t on it. That's not what Obama claimed nor does it follow from what Marokai wrote, which was about $500 billion cut from Medicare, which was actually used to fund changes elsewhere.

You're being very kind in your post, but I think The Vorlon is tough enough to stand by his own words as he wrote them, and accept if there's a mistake.

[Southern Senator North Carolina Yankee]

As Moderate stated, up until maybe 2009, the surplus in SS was used to cover the deficit in the general fund. Democrats actually used to point this out, along with separate funding of Iraq/Afghanistan wars, to cry BS on Bush's low budget deficits in 2006 and 2007. This had been the practice for decades. Now, SS no longer has that big surplus any more and so the deficit is now larger because the politicians can no longer raid it to hide the deficit in the general fund. A

s Torie said though, putting up a firewall serves no purpose as the Gov't needs to meet all of it's obligations regardless of where they are. And if SS began to ran a big deficit, which the current demographics say will start happening, it has to get that money by borrowing it (ei selling off the T bills in the fund) and it's no different then any other treasury auction. You still have to sell the T-bills to the same people in exchange for cash to send out to the SS recipients. So in the end, all the so called firewalls are artificial and meaningless. SS will thus always be on the table.


As for the $500 billion, the basic point is that it has already been taken out of Medicare and spent elsewhere. Medicare still has the same structural problems it did before Obamacare was passed, hence you need more cuts in the program.

[The Vorlon]

Forgive me if I have this totally wrong, but as far as I understand it, Social Security doesn't actually contribute to the deficit. It's entirely self-financed, and is restricted from drawing money from outside it's own funds when it can't completely pay it's bills. From what I know of the program, it's literally forbidden by law from contributing to the deficit.

let me take a stab at explaining......

Social Security has a "trust fund" run by a board of directors, advised by a bunch of actuaries, that looks after the fund.

When SS started up in the 30s, the retirement age was 65, and average life expectancy was 61 years, for every person collecting SS benefits, there were about 9 people paying into the system.  

As people started living longer, and also on average entering the workforce later in life due to more education, this ratio started to shift.  Currently there about 2 folks paying in for every person collecting... the ratio shrinks to about 3 to 2 at the peak of the baby boom bulge getting into retirement.

In the early 80s they "fixed" social security by raising SS taxes and very modestly tweaking retirement ages in the future and a few other minor changes.

Because of this fix, SS actually ran a pretty healthy surplus in most of the 80s and 90s, where the money flowing into the SS trust exceeded the benefits being paid out.. the theory being that like good fund managers they were building up a surplus now in the knowledge that in out years their obligations would rise.... based upon these accumulated surpluses SS is, officially at least, solvent till about 2030 or so.. (this may have slightly changed due to the recent fiddling with payroll taxes in the stimulus package, bust tax cut extension, etc)

Where this ties into the federal deficit is that the single and only asset in the SS trust fund is special US Treasury bills, so the 2.5 trillion that "officially" exists in the trust fund to help offset rising costs as the baby boomers retire exists only to the degree that the US Treasury can actually redeem these Treasury bills to the SS fund.

SS is now pretty close to "breakeven" (I think very mildly negative IIRC)  on a cash flow basis with revenues coming in matching payments pretty closely, but in out years the cash flow gets very negative and the SS fund will require the treasury to redeem these special T-Bills in order to have the cash to actually payout the benefits to the baby boon.

The effective consequence of this is that soon tens, and fairly soon hundreds of billions of dollars a year of the special T-Bills held by the SS Trust fund will need to be redeemed by the treasure to fund SS benefits... this need to replay these T-Bills is what, on a cash flow basis, will massively contribute to the deficit faced by the federal government.

The short and dirty skinny on this is that the SS fund saved +/- 2.5 trillion dollars to pay for the benefits of the babyboomers, they invested the 2.5 trillion in the Federal government, and the feds spent the 2.5 trillion and more....

Now the the SS Funds needs those trillions back, where they are going to come from is... unclear at this moment......

Strictly speaking, yes these payments have no effect on the Federal deficit, you redeem a trillion in bonds, you have a trillion less in cash, but also a trillion less in liabilities....  

But on a cash flow basis, where do you get the extra trillions you need to redeem SS Trust fund T-Bills in addition to the borrowing you might need for other government activities...? - This is where the crunch comes in....