You don't see much fiscal sanity from either major party anymore, but the GOP has been especially off the deep end over the last few years. This is why I find it notable that one idea coming from a conservative senator is right in line with the sort of commonsensical fiscal ideas we need more of in our country, to set us on a path to solvency.
Sen. Tom Coburn, the fiscal hawk Republican from Oklahoma, came up with this idea. Like the rest of his party, he's saying we should offset the money being taken out of social safety net programs to pay for a payroll tax cut. The GOP is right here. In fact it's been confusing to me why the Democrats don't seem to care that these payroll tax cuts are pushing the entitlement programs they say they care so much about closer to insolvency. But it's his solution that is novel, especially for a Republican. He says we should end welfare for the wealthy to offset the cost of the payroll tax cut for the year.
This is a great idea, on several levels. In the long run it saves quite a bit of money, since the cuts would continue, while the payroll tax would go back to normal next year - assuming the democrats aren't able to get another such thing passed. In a column on over at CNN.com, Coburn talks about some of the cuts he'd make:
Millionaires receive tax earmarks and deductions crafted by both parties that allow them to write off billions each year. These write-offs include mortgage interest deductions on second homes and luxury yachts, gambling losses, business expenses, electric vehicle credits and even child care tax credits.
Meanwhile, direct handouts for millionaires have included $74 million in unemployment checks, $316 million in farm subsidies, $89 million for preservation of ranches and estates, $9 billion in retirement checks and $7.5 million to compensate for damages caused by emergencies to property that should have been insured. Millionaires have even borrowed $16 million in government-backed education loans to attend college since 2007.
He also goes into the need to stop paying out entitlement program benefits to multimillionaires who don't need the help, something even Canada does to save money. I can see the point in giving retirees with deep pockets catastrophic medical expense coverage, but if you're sitting on a net worth several million deep, it's absurd to be giving you a social security check or medicare coverage. He's absolutely right that to bring fiscal sanity back, we need to make our entitlement programs into social safety nets for people who need them, not a retirement program that takes money from working families and pads the portfolio of wealthy retired people.
One can only hope he can find enough fiscally sane Republicans and Democrats to push something like this through.
Other Senate Republicans came up with their own plan to offset the Payroll tax cut, that would have offset the spending mostly by trimming the federal workforce through attrition, freezing their pay for three years and asking making more than a million a year to take cuts in their Medicare (a decent trade for the payroll extension in my opinion, but a no-go with Democrats). The Democrats rejected that plan, and now are actually pushing for the payroll tax cuts to be expanded, taking more money out of Social Security and Medicare, and putting it back into the hands of workers. No word from them as far as what they'd accept as offsets.
Two bills along the lines of some of the above have been offered up in the Senate in recent days, both failing to receive the 60 vote super-majority needed to overcome filibuster threats. On top of this, they need to decide on renewing jobless benefits, and whether they're going to allow Medicare payments to be cut by about $20 billion. As with everything else, they wait until the very last minute to pass these things, if they're going to pass at all. Both sides say they want to come to a deal on the extension of the payroll tax, and the Republicans are right that it should be offset by cuts that are phased in over the next several years.
Question is whether this will be another example of a last minute save, or lapse for some length of time, as unemployment benefits did last year, because the two sides can't bridge the gap between their differences.
Solomon Kleinsmith is a former nonprofit worker, serial social entrepreneur and strident centrist independent blogger from Omaha, Nebraska. His website, Rise of the Center, is the fastest growing blog targeting centrist independents and moderates.