The Republican Media- No. 39
Senator Lindsey Graham likes what he sees (literally) in Barack Obama, who is "showing a little bit of leg here" in the proposals expected to be included in the budget proposal to be unveiled on Wednesday. Overcoming his apparent stimulation, the South Carolina Republican told David Gregory on Meet The Press (transcript, here)
There are nuggets of his budget that I think are optimistic. It’s overall a bad plan for the economy, but when you look at Chained CPI and Medicare reductions, we’re beginning to set the stage for the grand bargain. Chained CPI, adjust/harmonize the retirement age of Medicare with Social Security, do some means testing for both programs and in return flattening the tax code, generate about 600 billion dollars of revenue. And if you look at these changes over 30 years, there’s four to five trillion dollars in savings. So I’m looking for the biggest spending cut in American history by reforming entitlements, saving those entitlements. And the president is showing a little bit of leg here. This is-- this is somewhat encouraging. His overall budget is not going to make it but he has sort of made a step forward in the entitlement reform process that would allow a guy like me to begin talk about flattening the tax code and generating more revenue.
With the cuts in spending, it is "overall a bad plan for" an economy still suffering from lax demand. Graham, however, wasn't referring to that, but to sacrifice elderly people to achieve "the biggest spending cut in American history." He wants to raise the eligibility age for Medicare and for Social Security, as his friends at the Business Roundtable have advocated.
The primary driver of the long-term deficit, health care costs, are reduced by Medicare. But less Medicare means more private insurance, and the health insurance companies just aren't getting enough out of the people Graham & Company view as parasites. Chained CPI, which the President will recommend, won't be sufficient for Senator Graham, who prays increasing the age of eligibility and means testing will teach those old people a lesson they won't forget. It would have the desired effect, unfortunately, because
The median income of people over age 65 is less than $20,000 a year. Nearly 70 percent of the elderly rely on Social Security benefits for more than half of their income and nearly 40 percent rely on Social Security for more than 90 percent of their income. These benefits average less than $15,000 a year.
The reason that seniors are so dependent on Social Security is that the other pillars of the retirement stool, employer pensions and individual savings, have largely collapsed.
And in return for decimating earned benefits, Senator Graham is willing- wait for this- to "flatten" the tax code, euphemism for lowering the tax rates of the wealthy and the nominal corporate tax rate, the latter nearly the highest among industrialized nation. However, as The Washington Post recently reported
Most of the 30 companies listed on the country’s most famous stock index, the Dow Jones industrial average, have seen a dramatically smaller percentage of their profits go to U.S. coffers over time, even as their share prices have driven the Dow to an all-time high.
A Washington Post analysis of data from S&P Capital IQ, a research firm, found that in the late 1960s and early 1970s, companies listed on the current Dow 30 routinely cited U.S. federal tax expenses that were 25 to 50 percent of their worldwide profits. Now, most are reporting less than half that share.
With the effective corporate tax rate on par with that in other industrialized nations, the South Carolina Senator wants to cut the income of elderly people and raise the costs of their health care, while also reducing the corporate tax rate and shifting the burden onto the middle class.
And to that David Gregory responds- really: "I also want to follow up-- you’re putting new revenue, as a Republican, you’re putting that on the table and you think it ought to be…"
That, to the host of the longest-running television program in history, is what passes for a compromise position from a moderate Republican. Presented with a plan which is practically a right-wing wish list of corporate tax breaks, slashing Medicare and Social Security, and giving the Pentagon a pass, David Gregory asks: "Is the Republican leader of the Senate there yet?"
No, David, the question is: Is the Republican leader of the Senate willing to admit he loves it or will he feign disapproval to gain further concessions from the President before negotiations have even begun?