(Note: This article continues a weekly series called "The Light of Truth" shining the light on factually inaccurate and slanted information polluting Texas and National politics.)
As Rick Perry continues his Presidential Campaign, he has been repeating talking points that falsely assert Social Security is insolvent:
"It is a Ponzi scheme for these young people. The idea that they're working and paying into Social Security today, that the current program is going to be there for them, is a lie, .... It is a monstrous lie on this generation, and we can't do that to them."
So what is the truth?
REALITY CHECK FOR SOCIAL SECURITY
Social Security is currently solvent;
Future funding shortfalls are minor and can be easily handled; and,
The Ponzi Scheme accusations are false and based on superficial analysis.
SOCIAL SECURITY IS CURRENTLY SOLVENT
According to the non-partisan Congressional Budget Office Report , Social Security is financially solvent and can continue to pay benefits at their current level for over 25 years without experiencing any funding shortfall.
The current political problem is that for the first time, the amount paid in social security taxes is less than current benefits, forcing the so-called social security trust funds to be tapped. However, even if there are no changes to taxes or benefit formulas, as late as 2040, social security taxes alone will cover 80% of projected benefits.
So the short answer is Social Security is not at any immediate actuarial risk.
SOCIAL SECURITY'S FUTURE FUNDING IS EASILY MANAGEABLE
In the off-chance that Congress has done nothing to handle the anticipated social security shortfall in the next 25 years, the system could still remain solvent merely by requiring a 20 percent reduction of benefits. Of course, such a drastic across-the-board cut can easily be prevented by prior action.
The Congressional Budget Office has done the math on 30 specific fixes, including such items as increasing social security taxes by 1,2, or 3%, eliminating or altering the taxable maximum, lowering benefits for the wealthiest Americans, changing benefit formulas, raising the Full Retirement Age, and altering the Cost of Living Adjustment (COLA).
Later today, you will be appearing with Texas Governor Rick Perry and other leading conservative advocates to champion the "Texas Miracle." You will make arguments that they don't raise taxes in Texas, and Governor Perry will talk about a no new taxes pledge, and conservatives in Texas and across the country will rejoice at your frguality. I'd imagine that few, if any, in the media will even challenge your appearances, instead carrying your refrain of "no new taxes" to the masses without comment or correction.
You, of course, will be lying today if you say Texas does not raise taxes. So will Governor Rick Perry, and any other conservatives who try to piggyback on your message. You will be lying because Governor Rick Perry raised taxes for 213,000 employers this year.
The Texas Workforce Commission is issuing up to $3 billion in bonds and raising 2011 taxes for employers to replenish the state's ailing unemployment trust fund.
[SNIP]
About 213,000 employers will pay more in unemployment taxes, but commission officials say the increase is small. For those employers paying the standard minimum tax, the cost will go up to about $70.20 per employee, from $64.80 last year. That's about an 8 percent increase.
Legislation, reports, news articles and expert analysis show that Perry has signed about half a dozen tax increases into law, including the three 2006 changes intended to help cover cuts in school property taxes.
Texans paying more thanks to Perry's signature on tax-increase measures include companies with higher business taxes, plus cigarette smokers and purchasers of smokeless tobacco, fireworks and diesel equipment.
I'll be watching what you say today, Mr. Norquist, and I'll be watching how the media reports what you and Governor Perry say. I'm hoping that somebody -- either you or the media -- will be brave enough to tell the truth.
The traditional media has pushed the narrative that this year voters appear to be have turned their frustration with government into a borderline irrational opposition to taxes. Without a doubt, this storyline did not invent itself, but some interesting recent election results here in Texas may undermine the notion that voters this year hate all taxes, regardless of their purpose.
As Jason Embry noted in First Reading, Joe Smith of TexasISD.com reported that of the 44 Texas school districts that have held tax ratification elections, 36 have been ratified. That is nearly 82 percent.
While the 44 districts are located across the state, they are mostly smaller districts, and turnout was predictably low in these contests. Still, the results may do something to disprove the widespread notion that it is only the anti-tax Tea Party groups who are motivated to hit the polls this year.
You can read all of Mr. Smith`s article detailing the results here.
Saying no only goes so far. The Congressional Republicans obstructionism has been purely a political strategy, but it is a shortsighted political strategy with no long term vision. Perhaps that is because that Republicans have no long term vision, and that their campaign agenda amounts to nothing but clichés and platitudes. Over the course of the primary campaign season we have heard Republican candidates use phrases like "pro-growth," and "free enterprise," and "lower taxes," and "less spending," and of course "smaller government." These candidates have spent most of their time informing voters about everything that they're against, but they haven't spent much time explaining to voters what they support. Some may argue that Republicans don't have a coherent narrative for a policy agenda because they do not have one. However, the real reason they don't have a coherent narrative might be because they do have an agenda, and the policy ideas that Republicans are advocating are to simply double down on the failed economic policies that lead to the Great Recession.
This year Congressman Jim Jordan (R-OH) introduced the Economic Freedom Act of 2010, which among other things would eliminate the tax on the capital gains of individuals and corporations; reduce the maximum corporate income tax rate to 12.5%; allow a permanent and unlimited expensing allowance for depreciable business assets; and reduce payroll tax rates for employers, employees, and self-employed individuals in 2010, permanently repeals the estate taxes. According to an analysis by the Center for American Progress, what this proposed legislation amounts to is a $10 trillion giveaway to corporations and placing a further burden on working and middle class Americans. For all of the Congressional Republicans talk about budget deficits, this legislation would add $7 trillion in deficits over the next ten years. When you consider Republican support for extending the Bush Administration 2001 and 2003 tax cuts, the Republican economic agenda would add $10 trillion to the deficit. How does the legislation proposed to pay for these policies? By repealing TARP and using the remaining stimulus funds. However, that would only pay for about 5% of the cost of the legislation, which disproportionately benefits the wealthy. The average middle-class taxpayer would receive a tax cut of $467, compared to the average taxpayer in the richest 1% receives a tax cut of $157,500.
Then there is the Roadmap for America's Future Act of 2010, which was introduced this year by Congressman Paul Ryan (R-WI). While Congressman Jordan's legislation would simply disproportionately benefit the wealthiest of Americans and add trillions of dollars to the budget deficits, Congressman Ryan's legislation would also increase the tax burdens on the work and middle class and make significant cuts to the social safety net. Basically not only does Ryan want to dismantle the policies that kept the Great Recession from turning into the Great Depression, he wants to dismantle the policies that where created because of the Great Depression to protect the most vulnerable of Americans. According to an analysis by the Center on Budget and Policy Priorities, the Roadmap would reduce by half the taxes of the richest 1% of Americans and the tax cuts would increase the further up the income ladder you climb. The richest 1/10 of 1% of Americans (whose incomes exceed $2.9 million a year) would receive an average tax cut of $1.7 million a year. How would these massive tax cuts be offset? By taxing working and middle class Americans. A new consumption tax on most goods and services, and this would shift the tax burdens so considerably from the upper class to the middle class that people with incomes over $1 million would face much lower effective tax rates than middle-income families would. When you consider that the Roadmap makes drastic changes to Social Security, Medicare, Medicaid, discontinue the Children's Health Insurance Program, radically reduce federal spending, the picture becomes clear that Ryan's plan is a roadmap to the Gilded Age.
What should Congress do? Right now, nothing. Why should Congress do nothing? Because if Congress does nothing then the Bush Administration tax cuts for the wealthiest of Americans will expire and this will recover much needed revenue and help reduce the budget deficits. Except for the first time during the course of the Obama Administration Congressional Republicans actually want to do something: extend the Bush Administration tax cuts and some believe they should be made permanent.
If tax legislation is passed all the tax cuts passed under Bush Administration in 2001 and 2003 will expire. The tax rates would then revert at the end of the year, with the top marginal income tax rate rising to 39.6% from 35%, and other corresponding rates for lower income brackets would also increase. There basically have been three different lines of thought on the Bush tax cuts, and that has been to either let them all expire, let some of them expire, and to let none of them expire. Generally speaking liberal Democrats have been making the case to allow the tax cuts to expire, while conservative Democrats have been arguing to allow some to expire but maintain the lower tax rate cuts. Of course Republicans have been arguing that they should all be extended.
Key point: Texas Democrats are acting responsibly about our state's $18 billion budget deficit. Whether it is members of the 20/20 PAC, Senator Kirk Watson, Rep. Rene Oliveira, or Bill White on the campaign trail, we are the party of responsible budget leadership, while Rick Perry just wants to dig us further and further into reform.
The state budget crisis is a major campaign issue. But while we don't know who will be Governor next session, or which party will be in control in the State House, it is Texas Democrats who are leading the way to offer real solutions and thoughtful study to solving our state's $18 billion budget deficit. The 20/20 PAc joined the conversation about budget reform today, as reported this morning in the Austin American-Statesman's First Reading:
The Texas 20/20 PAC, a group of 10 Democratic legislators that calls itself “the House’s voice of moderation,” today will release a report on what states around the country have done to close their budget gaps. The author is former Deputy Comptroller Billy Hamilton, who was a high-ranking aide to Democratic and Republican comptrollers.
The 20/20 PAC is putting their stamp on the budget issue, in a pretty impressive way. The hire of Hamilton is a good move ot show they are being earnestly bipartisan, and not just political with their desires. With so much uncertainty going into the next session these sort of policy principles that cut across party lines are important. It's great to see the conservative House Democrats speaking out and trying to lead on this issue early on.
Other Democrats have previously called for responsible budget reform. Senator Kirk Watson has gotten in front of the issue, too. A recent article in the San Antonio Express-News, "Democrat says this may be right time for budget reform" mentioned the following:
Watson said before he'll vote to spend any of the $8.2 billion expected to be in the fund when lawmakers write the next two-year budget, leaders and lawmakers must first agree to budget reform.
[...]
Watson takes issue with tricks like the use of nearly $3.7 billion in levies ostensibly collected for particular purposes – from combating pollution to helping people struggling to pay their electric bills – being used instead to balance the budget. He's concerned about debt. He's alarmed over the continuing effects of the finance package that cut local school property tax rates without raising other state taxes enough to cover the cost.
Democrat State Representative Rene Oliveira is Chair of the House Ways & Means Committee, the tax committee in the Texas Legislature. Rep. Oliveira has spoken in repeated news reports about the need for serious examination of tax exemptions. In one of the most recent stories, "Lawmakers take aim at items exempt from sales tax," we learn the following:
“There are some easy ones (exemption eliminations) that I think Texans and a bipartisan group of House members would support, but I think people need to have the reality check of what we are facing before they will look at this as an alternative to drastic cuts,” said House Ways and Means Committee Chairman Rene Oliveira, D-Brownsville, whose panel has been studying exemptions. “Do I think a majority of the House is ready to say yes to this? No.”
Oliveira's plowing ahead with his work, which has included determining the policy reason for each exemption and whether that reason remains valid.
As the state's budget shortfall widens—to as much as $18 billion, or about 20% of the next two-year budget, according to the state legislature's latest analysis released earlier this month—critics are complaining that Mr. Perry's policies have left the state with little room to reduce spending.
"There is no way that they will be able to come up with $18 billion in cuts," said Eva DeLuna Castro, a senior budget analyst at the Center for Public Policy Priorities, a nonprofit that advocates for low-income Texans. "They would have to shut down our prison system."
Whether it is the House Mmebers of the 20/20 PAC, Senator Kirk Watson, Representative Rene Oliveira, or Bill White on the campaign trail, Democrats are stepping up to show responsible budget leadership while Rick Perry writes a self-help book for extreme right-wing Republican wannabees.
Yet another reason why I'm proud to be a Democrat.
STOP THE PRESSES!!! Republicans politicians are angry! Again? Why? President Obama and the Democrats cut taxes for most Texas families, and the Republican are . . . angry? Where is the news here? No matter what Democrats actually do, Republican politicians will be angry. Should the rest of us be angry, too?
Dear Senator Cornyn,
I received an email from you Wednesday April 2 about your op-ed in the Austin American-Statesman and having read it was motivated to respond to a number of logical errors, economic fallacies and disingenuous statements. I will respond to each of your paragraphs with my in own immediately following.
You:
This week, I will vote against the massive $3.6 trillion budget proposed by President Barrack Obama and Democrats in Congress, and Texans deserve to understand why. I believe this budget taxes too much, spends too much and borrows too much. This budget will delay economic recovery in Texas and across the nation, and it will reduce opportunities for all of us.
Your Constituent:
So by that logic you should have voted against President Bush's budgets as well since he spent too much and borrowed too much, but wait the difference was he taxed less. Of course that means we have to tax more now but now it's the Democrats who can be blamed as the party of "tax and spend" even if Republicans are the party of "borrow and spend". How exactly does putting people to work and lengthening the term of unemployment benefits as well as broadening the rules for who is eligible for benefits delay the economic recovery of Texas and the country?
Biden calls paying higher taxes a patriotic act WASHINGTON - Democratic vice presidential candidate Joe Biden said Thursday that paying more in taxes is the patriotic thing to do for wealthier Americans. The Republican campaign for president calls the tax increases their Democratic opponents propose "painful" instead of patriotic.
Under the economic plan proposed by Democratic presidential candidate Barack Obama, people earning more than $250,000 a year would pay more in taxes while those earning less - the vast majority of American taxpayers - would receive a tax cut.
"We want to take money and put it back in the pocket of middle-class people," Biden said in an interview on ABC's "Good Morning America."
Noting that wealthier Americans would indeed pay more, Biden said: "It's time to be patriotic ... time to jump in, time to be part of the deal, time to help get America out of the rut."
Once of the things I value most about my childhood in Texas was the rural lifestyle we enjoyed on an off and on basis. I learned an appreciation for nature first hand by chasing horned-toads and watching black ants and red ants have grisly wars in the buffalo grass. I learned to identify several species of animal by their tracks or scat as well as honing a natural instinct for direction and details.
It was a wonderful life.
But somehow, I don't get the feeling that this type of natural appreciation is what Don Southall was talking about when he addressed the Taylor County Commissioners earlier this week. No, his appreciation is called by names such as "tax avoidance" or "not paying your fair share" or "freeriders".
It's a habitual aversion to government - good or bad - that the "Republican Revolution" (should be called "Republican Revulsion") brought to the foreground of far too many Texans. It's the kneejerk, "taxes bad!" mentality that is crippling the state of Texas and threatens the entire country.
