Chambliss Tries To Revive Debt Solution “Gang”

Senator Saxby Chambliss wants to take another run at dealing with the debt problem.

Democrats are wary of any serious changes to Medicare, the seniors’ health care entitlement program. The outline put forth last year by the Gang of Six mostly left Medicare reforms to Senate committees, with the goal of limiting yearly federal health spending growth to 1 percent more than the gross domestic product.

The Gang of Six has proposed a tax overhaul that reduces income tax rates but eliminates many deductions, aiming for $1 trillion in extra revenue. Republicans have resisted any increase in tax revenue, and nearly all Republicans in Congress have signed a no-new-taxes pledge put forth by Washington activist Grover Norquist.

Because Republicans held firm against revenue increases in the debt ceiling deal last year, Norquist said, they have no incentive to do so now, ahead of the fall elections.

“These jokers have not even written down in legislative form Simpson-Bowles yet, but now we’re going to get serious about it? How about writing it down if it’s a good idea?” said Norquist, who considers Simpson-Bowles to be a $5 trillion tax hike. He added, “It’s because it’s not written down that everybody can sort of see what they want to in it.”

Aside from the unresolved details, Chambliss said the group is reluctant to produce a bill now because it would be politically toxic in election season. The group plans to have a framework in place for the lame-duck congressional session in November and December.

Something has to be done. Is Chambliss’ approach the right one?

Discuss.

21 comments

  1. Harry says:

    Revenue offsets are fine, but no new taxes please. The deficit gap needs to be closed with less expenditure. When I visit DC, I want to see for sale signs all over the place.

  2. ZazaPachulia says:

    What I’ve read is that the Gang of Six is really now the Gang of 47–nearly half of the Senate. They believe that slowing the economic recovery by driving up to the very edge of the fiscal cliff for the sole purpose of political expediency is a disastrous plan of attack. It’s economic terrorism by Grover and his buddies in Congress aimed at the American people. Hundreds of thousands of more jobs will be lost. Markets will tank. The prospect of actually going over the fiscal cliff (instead of pushing the deadline out for a few months) would immediately drop us into a European-style recession, if not a Spanish/Greek depression.

    But even if Saxby and company have 47 Senators on their side and can win 13 more (likely), they’re not going to get any compromise through the House and we will all suffer. The best hope we have is swift compromise during the lame duck session and/or an extension of the fiscal cliff deadline. At least Saxby realizes this.

  3. John Konop says:

    Any rational person who can add and subtract knows we need an increase in revenue and a decrease in spending. Also the biggest area which alone will BK the country is Medicare. One part of Medicare alone the drug prescription bill alone will take down the country. The real question, are we ready for an adult conversation or will we listen to zealots for cash on both sides spewing BS………….? Saxby deserves a thumps up for trying to do the right thing over playing to the base…………

    BTW if you are no talking about Medicare and military spending cuts you are not dealing with real budget issues. And if we do not deal with eliminating write –offs and or tax increases the math does not work. Bush 1 may have lost an election doing the above when he faced a similar fiscal crisis, but most experts will tell you that his tough love decisions helped get us on the road of recovery. Clinton got the credit, but Bush did the right thing. While Norquist and Abramoff made a living pimping our country away to lobbyist, George Bush Sr. was true patriot helping all administrations. Sad how some of you let Norquist get away with his BS………….

  4. Charlie says:

    Interesting:

    Senators Seek Presidential Debate On Bowles-Simpson Recommendations

    WASHINGTON – U.S. Sens. Joe Lieberman (I-Connecticut), Saxby Chambliss (R-Georgia), Lindsey Graham (R-South Carolina) and Mark Pryor (D-Arkansas) today sent a letter to the co-chairs of the nonpartisan Commission on Presidential Debates requesting that the first of the three officially-sponsored debates, which will address domestic policy, devote specific attention on how the candidates would get our fiscal house in order.

    “We request that you ask the presidential candidates which of the recommendations of the National Commission on Fiscal Responsibility and Reform they would adopt as part of their plan to reduce the deficit,” wrote the senators. “We hope that such a debate would begin a national discussion that results in a consensus that both of our major national parties can endorse to reduce the deficit and place our nation’s economy on a path to future growth.”

    Text of the letter is below and a signed PDF is attached.

    Dear Mr. Farenkopf and Mr. McCurry:

    We write as Democrats, Republicans, and Independents, who all agree on one thing: the nearly $16 trillion national debt, which is growing by almost $2 trillion per year, is one of the great moral issues and threats facing our nation.

    In light of the gravity of this issue, we believe that the Debate Commission should ask each presidential candidate to devote specific and extensive attention to the question of how the candidates would get our nation’s fiscal house back in order during the first debate dedicated to domestic policy.

    Specifically, we request that you ask the presidential candidates which of the recommendations of the National Commission on Fiscal Responsibility and Reform they would adopt as part of their plan to reduce the deficit. As part of this discussion, we believe that it would be essential to engage the candidates in a detailed discussion of their priorities for tax and entitlement reform.

    We hope that such a debate would begin a national discussion that results in a consensus that both of our major national parties can endorse to reduce the deficit and place our nation’s economy on a path to future growth.

    • John Konop says:

      Interesting article be a former President Reagan economist.

      ……..By this measure, federal taxes are at their lowest level in more than 60 years. The Congressional Budget Office estimated that federal taxes would consume just 14.8 percent of G.D.P. this year. The last year in which revenues were lower was 1950, according to the Office of Management and Budget.

      The postwar annual average is about 18.5 percent of G.D.P. Revenues averaged 18.2 percent of G.D.P. during Ronald Reagan’s administration; the lowest percentage during that administration was 17.3 percent of G.D.P. in 1984.

      In short, by the broadest measure of the tax rate, the current level is unusually low and has been for some time. Revenues were 14.9 percent of G.D.P. in both 2009 and 2010…

      http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-or-low/

      .

  5. Harry says:

    John,

    I don’t have much of a problem with continuing federal taxes at current rates or slightly lower, although I do have a problem with corruption in the tax law and source of revenues. I have no problem for example putting somewhat higher rates on the “wealthy”; raising tariffs on many classes of imports; and eliminating many of the deductions and carved out credits.

    Federal taxes as a percentage of GDP has generally increased 2 or 3% since WW2, but of course decreased during the GW Bush 1st term due to the cuts. I think right now it is about 19%. See this link
    http://www.forbes.com/sites/briandomitrovic/2012/04/24/the-economists-case-for-raising-taxes-is-poor/

    Now, if you go back 80 or 90 years, federal taxes were only 10% of GDP with no deficit, and yet somehow people survived.

    However, my main concern is not tax levels, but rather government spending as a percentage of GDP and the debt which the US and some states and localities will never repay except with inflated dollars. The spending side is where we need to focus – and that includes entitlements, military, and the DC nomenklatura. Cut it all. Is it politically possible? Probably not, so we will follow the Roman Empire and many other states where the elites have tried to bribe the populace in order to stay in power.

  6. elfiii says:

    @Charlie – “In light of the gravity of this issue, we believe that the Debate Commission should ask each presidential candidate to devote specific and extensive attention to the question of how the candidates would get our nation’s fiscal house back in order during the first debate dedicated to domestic policy.”

    Short of the Congress handing the checkbook over to the President and walking away there is nothing any President can do. How ’bout the Congress actually doing their job for a change? There’s a nifty idea.

    Talk about a head fake!

    • Charlie says:

      One of my greatest disappointments of this President is that he put none of his clout behind Simpson-Bowles or any other of the various plans he floated for deficit reduction during his term.

      Congress has to vote the policy through, but to pretend that a President who choses to focus on this issue, and what strategies he chooses, defies both logic and history.

      Reagan got his tax cuts and his increase in defense spending by calling members of Congress into the oval office one or a few at a time, and winning them over. It took more than a photo op punctuated by saying “I won”.

      A President who has a will will find the way. A president chasing daily tracking polls will not.

      • Dave Bearse says:

        I seem to recollect your 2010 position concerning Dem proposals involving any tax increases was “not now”.

        • Charlie says:

          I don’t have time to look now, but I seem to recall more than a few posts backing both Saxby’s Gang and Simpson Bowles, both of which had new revenues. I don’t think tax rates need to be increased, but I have no problem with eliminating a lot of deductions.

          • griftdrift says:

            There are currently 21 judicial vacancies being held up because the Senate can’t reach cloture. Do you really think a massive tax reform could get through with a few jelly beans and hand shakes?

            I’m for Bowles Simpson too. I’m also disappointed the President didn’t push it harder. But let’s be realistic.

  7. Baker says:

    I’d just like to throw in my two cents of applause for Saxby.

    I wish we didn’t have 140 MILL Americans on food stamps, I wish we could cut spending by about a trillion dollars…unfortunately 50% of America wouldn’t even begin to agree with me. We need to keep working to try and convince more folks but in the meantime we need to find fixes where we can because we can’t keep going like this. Saxby and his Gang are part of that process and I wish them the best of luck.

  8. Calypso says:

    Please tell me I’m not the only one fed up with Norquist and his bootlickers.

    I voted against TSPLOST, but that’s not what I’m referring to here. If you want the service, you gotta pay for it. No one WANTS to pay higher taxes just for the hell of it, but if you want continued services or enhancements to existing services, they aren’t free.

  9. Blog Goliard says:

    I don’t like Norquist much myself…but if his antics ensure that we get spending cuts we can take to the bank *before* the revenue increases, he’ll deserve a medal.

    (And then a boot to the head. But the medal first.)

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