In his State of the Union address Tuesday, Obama continued to express a willingness to slow the growth of Medicare, but only around the edges, Gleckman writes.?
By Howard Gleckman,?Guest blogger / February 13, 2013
President Barack Obama is greeted after giving his State of the Union address during a joint session of Congress on Capitol Hill in Washington, Tuesday.
J. Scott Applewhite/AP
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House Republicans say they want to balance the budget in a decade with only spending cuts and no tax hikes. In his?state of the union address?Tuesday, President Obama?perhaps channeling his new pal New Jersey Governor Chris Christie?had a response. In a word, fuhgedaboutit.
Skip to next paragraph Howard Gleckman
Howard Gleckman is a resident fellow at The Urban-Brookings Tax Policy Center, the author of Caring for Our Parents, and former senior correspondent in the Washington bureau of Business Week. (http://taxvox.taxpolicycenter.org)
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Obama?s priorities: Gun control and immigration reform, along with a dozen new government programs that he says will improve the lot of the middle-class and won?t add to the deficit?but surely won?t cut it.
The fiscal goal he described is the same one he?s had for months: By his count $1.5 trillion in new deficit reduction over 10 years that would stabilize the debt at slightly below current levels?a far cry from balance.
The president would anchor that effort with a tax reform that he says will eliminate hundreds of billions of dollars in ?tax loopholes and deductions for the well-off and the well-connected.? Of course, there are not hundreds of billions in loopholes in the Tax Code. There are, however, hundreds of billions of dollars in deductions and exclusions for mortgage interest, charitable gifts, employer-paid health insurance, and state and local taxes?none of which will be easily scaled back, even for the well off.?
LONDON (AP) ? American philosopher and constitutional law expert Ronald Dworkin, a liberal scholar who argued that the law should be founded on moral integrity, has died at the age of 81.
His family said Dworkin died of leukemia in London early Thursday.
Dworkin was a professor of law at New York University and emeritus professor at University College London.
He was one of the best known and most quoted legal scholars in the U.S. and also an expert on British law.
NYU Law School Dean Richard Revesz said Dworkin was "not only an intellectual giant, but also a masterful teacher, admired colleague and beloved friend." He called Dworkin the most important legal philosopher of his generation.
"He will be dearly missed by those of us who were lucky enough to know him and by the countless people who followed and admired his work," Revesz said.
Dworkin was best known for the idea that the most important virtue the law can display is integrity ? understood as the moral idea that the state should act on principle so each member of the community is treated as an equal.
A frequent contributor to the New York Review of Books, Dworkin's own works included "A Matter of Principle," ''Law's Empire," and "Justice for Hedgehogs."
He argued in his writings that acting with dignity and moral clarity could make life worthwhile.
"If we manage to live a good life well, we create something more," he wrote. "We write a subscript to our mortality. We make our lives tiny diamonds in the cosmic sands."
Dworkin graduated from Harvard Law School in 1957 and was a Rhodes Scholar at Oxford University in England.
He told the Guardian newspaper two years ago that he did not know how to judge his life's work.
"I've tried to be responsible for my decisions and to make an authentic life," he said. "When I was a Wall Street lawyer, I realized I didn't want that life. So I went and did what I found most fulfilling, thinking about, arguing for the things that are hard, important and rewarding. I've tried to do it well. I can't say if I've succeeded."
Professor Stephen Guest at University College London said Dworkin was "a cosmopolitan American who regarded London as his main home, and who knew how to enjoy things, especially music and art."
He is survived by his wife, Irene Brendel Dworkin, his children, Anthony and Jennifer Dworkin, and two grandchildren.
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Associated Press Writer Jill Lawless contributed to this report.
Every politician in America knows that Social Security (SS) is a third rail. Any Pol who tries to mess with the country?s largest and most popular entitlement program is going to have the likes of the AARP coming after them. It?s not possible to win an election on a platform that advocates cutting back SS.
With that in mind, I find it interesting to report that a very credible source is now predicting that Obama AND Congress will take action over the next 24 months that will substantially undermine both the long and short-term health of SS. The legislative raid on SS will certainly total in the hundreds of billions, it could top $1T over the next fifteen years.
So who is this ?credible source?? And just how is this raid going to happen? The source of this information is the Congressional Budget Office (CBO); the following is how it will play out:
SS consists of two different pieces. The Old Age and Survivors Insurance (OASI) and Disability Insurance (DI). Both entities have their own Trust Funds (TF). OASI has a big TF that will, in theory, allow for SS retirement benefits to be paid for another 15+ years. On the other hand, the DI fund will run completely dry during the 1stQ of 2016. By current law, the DI benefits must be cut across-the-board by 30% on the day that the DI TF is exhausted.
This would mean that 11 million people (most of whom are very sick) would get slammed from one day to the next. There is no one in D.C. who wants this to happen. I don?t think the American public wants this outcome either. So what are the fixes?
1) Increase income taxes on +$250k of income to pay for the DI shortfall.Maybe, but this will not happen with the current Republican controlled House.
2) Increase Payroll taxes to cover the DI shortfall.I see zero political support for a permanent Payroll tax increase.
3) Cut benefits by 30%.This would be insane ? it will not happen with Obama running the show.
4) Kick the can down the road and raid the OASI TF for the annual shortfalls at DI.
Of course #4 is the path that will be taken. #s 1, 2 and 3 are not politically feasible.? I have been wondering what will happen with the DI conundrum. I was surprised to see that the CBO spelled out what will happen in its report on the Budget and Economy ? SS Trust Funds.? The report has this footnote:
CBO projects that the DI trust fund will be exhausted during fiscal year 2016. Under current law, the Commissioner of Social Security may not pay benefits in excess of the available balances in a trust fund, borrow money for a trust fund, or transfer money from one trust fund to another. However, following rules in the Deficit Control Act of 1985 (section 257(b)), CBO?s baseline assumes that the Commissioner will pay DI benefits in full even after the trust fund is exhausted.
The ?loophole? to drain the OASI insurance is already law ? so Congress doesn?t have to do anything to raid the retirement fund. The ?do nothing? plan is always the best option in D.C.
The footnote goes on to provide an estimate for the size of the raid:
For illustrative purposes, below are the cumulative shortfalls in the DI trust fund beginning in 2016. Those shortfalls do not include interest expenses.
DI Trust Fund Cumulative Shortfall
($s in Billions)
2016 -15
2017? -55
2018? -94
2019 -133
2020 -173
2021 -215
2022 -260
2023 -307
?
Wow! At this rate the raid tops $1T in 2029. This is is a big dent in a Trust Fund of $2.8T.
There is an import ?tell? from the CBO. In the footnotes it highlights the fact that there is a discrepancy, and uses this an excuse to avoid establishing an adjusted end date for the OASI Trust Fund. (It?s not a complicated calculation)
What the CBO fails to state is that the raid on OASI will result in a significant reduction in the End Date for the retirement Fund. In its report to Congress last year SS forecast that the Retirement fund would be exhausted in 2033.? The DI drain (and other negative revisions by CBO) will bring the End Date to below 2030 in the upcoming SS report to Congress. That would be a very significant development. The CBO does not want to be the one who puts a new SS end date ?out there?. To me, this was a cop-out by the CBO.
Given that discrepancy between the trust funds? operation and the baseline?s assumption, CBO is not providing DI or combined trust fund totals for the year of exhaustion and thereafter.
The timing of this story is interesting. The question in my mind is will the ?fix? come before or after the bi-election. If Obama was a gambler, and he believed the Democrats could re-take the House in 2014, then he might defer action on DI until 2015. This scenario creates the opportunity for option #1, a tax on the rich to supplement DI. Of course that is gambling, and there would be a small window of time to push through a new income tax to save DI.
Then there is the Republicans. Do they want to push this before, or after 11/2015? I could argue both ways, but in the end, it gets back to the fact that no one wants to ?do? anything with SS. It?s better to do ?nothing?; that makes #4 the most likely outcome.
I hope that some of the big Defenders of SS pick up on the information from the CBO regarding the coming raid on the retirement fund. This is a huge constituency (60m beneficiaries ? 150m contributors ? every politician in the country ? all of the Press). If that group catches on to what is about to happen to the retirement fund, there will be a great chorus of, ?Don?t you dare touch my money!?
I?m trying to stir the pot on this one. I want DI?s terminal condition to come onto the table sooner versus later. I?m hoping that if and when it does come up for discussion, it opens the door on the broader issue of what the hell America is doing with entitlements. Basically, I?m trying to pick a big fight. For the good of the country, wish me luck.
Now Watch: Don't Worry About Inflation But We'll Have To Address Entitlements, Says Paul Krugman
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PULLMAN, Washington ? Jasmine Dixon, Alyssia Brewer and Mariah Williams scored 14 points each and No. 17 UCLA won its sixth in a row, defeating Washington State 80-65 on Sunday.
Nirra Fields added 12 points and Atonye Nyingifa scored 10 for the Bruins (19-4, 10-2 Pac-12), who broke away from a two-point halftime lead by shooting 85 percent (17 of 20) in the second half. UCLA finished the game at 64 percent (30 of 47).
Brewer also had nine rebounds and five assists.
Lia Galdeira led Washington State (9-14, 5-7) with 19 points and Sage Romberg scored 10. The Cougars had won four in a row.
The Bruins used a 9-0 run to take the lead for good. Fields scored six of the nine points as UCLA went ahead 50-42 with 13:37 to go.
UCLA, in third place in the Pac-12, hosts conference leaders No. 6 California and No. 4 Stanford next weekend.
On Sunday, Feb. 10 at approximately 5:28 p.m., the Waterford Emergency Communications Center received notification from a Public Works unit clearing the roadways of snow, reporting a motor vehicle accident in the area between 41 & 37 Locust Court, in the Town of Waterford.
Members of the Waterford Police, Fire and Ambulance Association, along with Lawrence and Memorial paramedics responded to this call. Locust Court remained closed for a brief period Sunday while the crash scene was documented and investigated.
The initial investigation indicated that a single juvenile male was operating an All-Terrain Vehicle, traveling on the snow and ice covered roadway of Locust Court. The operator appears to have lost control of the vehicle, at which time the ATV rolled and the operator was ejected.
The operator was transported from the scene, via ambulance to Lawrence and Memorial Hospital in New London, CT for treatment of injuries. The subject?s name is not available for release at this time due to his age, the ongoing investigation and family notification.
This crash remains under investigation by the Waterford Police Department and members of its Accident Investigation Team.
Any person(s) who may have information regarding this accident, or events leading up to it, are asked to contact the Waterford Police Department by calling the main telephone number 860-442-9451, and referencing Waterford Police case #2013-00256. Any/ all information/ inquiries are appreciated.
BANGKOK (AP) ? Asian stock markets were mostly higher Friday before China releases last month's inflation and other economic data.
"Chinese data for January should be interpreted positively, but markets react to the country's indicators in a jumpy way and a major deviation from consensus may well introduce volatility," said Dariusz Kowalczyk of Credit Agricole CIB in Hong Kong.
Hong Kong's Hang Seng rose 0.1 percent at 23,208.91. South Korea's Kopsi advanced 0.5 percent to 1,941.79. Australia's S&P/ASX 200 gained 0.6 percent to 4,963.10. Benchmarks in Singapore, Indonesia, mainland China and the Philippines also rose.
Japan's Nikkei 225 dropped 1.2 percent to 11,216.41, slumping after a recent rally spurred by a weakening yen. Some analysts believe the yen may have bottomed out and that the rally has run its course. A weaker yen benefits Japan's export manufacturers because it makes their products cheaper in overseas markets.
Wall Street stocks fell Thursday as weaker earnings unnerved investors despite data suggesting that company layoffs are easing. Media conglomerate News Corp. cut its forecast for annual earnings. Sprint Nextel Corp., the third-largest wireless carrier in the U.S., lost $1.3 billion in its latest quarter as it revamped its network to take on larger competitors.
On the bright side, fewer Americans sought unemployment benefits last week. Applications for unemployment benefits falling 5,000 to 366,000.
The Dow Jones industrial average closed down 0.3 percent at 13,944.05. The S&P 500 fell 0.2 percent to 1,509.4. The Nasdaq composite fell 0.1 percent to 3,165.13.
Benchmark oil for March delivery fell 4 cents to $95.79 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 79 cents to finish at $95.83 a barrel on the Nymex on Thursday.
In currencies, the euro fell to $1.3395 from $1.3401 late Thursday in New York. The dollar was unchanged at 93.52 yen.
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