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Geithner’s fuzzy math on entitlement ‘spending cuts’
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“We've laid out a detailed plan of spending cuts. $600 billion in spending in mandatory programs over 10 years. They phase in gradually, they build over time. They are good policy. They make a lot of sense.”
— Treasury Secretary Timothy F. Geithner, on NBC’s “Meet the Press,” Dec. 2, 2012
“We've laid out a very comprehensive detailed framework of how we do it and in what stages with $600 billion of spending cuts spread over 10 years in entitlement programs.”
— Geithner, on CNN’s “State of the Union,” Dec. 2
The debate over the “fiscal cliff’ is largely about numbers — and clearly, $600 billion was the Treasury secretary’s talking point of the day on the Sunday talk shows.
Eager to rebut Republican claims that the administration was not serious about reining in entitlement programs such as Medicare and Medicaid, Geithner insisted the administration did have “a detailed plan of spending cuts,” totaling $600 billion, in what he described as “mandatory programs” or “entitlement programs.”
But his language is a bit slippery. Let’s explore what’s going on.
The Facts
President Obama’s opening bid in the battle of wills with Republicans is essentially his fiscal year 2013 budget, so it’s fairly easy to get the details by looking at Table S-9 of the White House budget. Every policy change is detailed there across 20 pages of numbers, though a few items have already been enacted.
The shorthand used on the Sunday television shows was that Obama has proposed a $1.6 trillion tax increase (technically, $1.561 trillion.)
But that’s a net number, because Obama has also proposed $359 billion in tax cuts. The gross tax increase in the budget actually is more than $1.9 trillion.
Geithner’s “$600 billion” is a gross number — before additional spending, such as improving roads and bridges. Still, the administration position is that it is seeking a total of $1.6 trillion in tax increases and $600 billion in total “mandatory” cuts, even after offsets.
But a good chunk of this “mandatory” money is not what would be considered entitlement spending — or at least aimed at health-care entitlements. The most up-to-date summary is in the administration’s mid-session review, in which Table S-3 shows $326 billion in health-care savings and $254 billion in “other mandatory savings.” (We had explored how Democrats sometimes mistout the health-care savings in a previous column.)
The “mandatory” side of the budget means the changes are permanent and not subject to annual congressional appropriations. That’s why Geithner could call them “mandatory programs,” though at one point he also called them “entitlement programs.” But they are not “spending cuts” in the traditional sense.
What are some of these “mandatory savings?” The administration lists them in the original 2013 budget, and they include:
■$61.3 billion from “impose a financial crisis responsibility fee”
■$43.7 billion from “implement Internal Revenue Service program integrity cap”
■$27.4 billion from “increase employee contribution” to federal retirement programs.
■$44 billion from “adjust payment timing”
In fact, some $100 billion of these “cuts”come from Geithner’s department. But are these cuts in the Treasury Department? No, the numbers represent additional fees and better IRS enforcement — not what an ordinary person would consider a spending cut. (We realize that Republicans and Democrats may count these as cuts, looking through the prism of the federal budget, but it still not the same thing as an entitlement cut.)
The $44 billion from adjusting the timing in payments is especially dubious — a one-time savings that takes place in 2022, the last year of the budget window. Presumably, those dollars are just transferred to the next 10-year budget window.
Another White House 2013 budget document, titled “Cuts, Consolidations and Savings,” makes the distinctions even sharper.
Over 10 years, its shows just $79 billion in cuts in mandatory programs, plus some $340 billion in “savings” (mostly reductions in payments to Medicare providers) for a total of $419 billion in “mandatory cuts, consolidations and savings.” For some reason, it did not list the $100 billion in Treasury savings as part of the mandatory cuts.
In an interesting coincidence with Geithner’s remarks on Sunday, House Republicans in their counteroffer Monday said they would see $600 billion in reductions over 10 years from health-care entitlement programs — and $300 billion in other “mandatory” savings. So if you are keeping score, Republicans are seeking 50 percent more in savings on the mandatory side.
The Pinocchio Test
Geithner is mixing up apples and oranges. He suggests that he is talking about spending cuts in entitlement programs, when in fact a huge chunk is in other areas — and is not spending cuts.
Rather than the $600 billion figure, the Treasury secretary should have specified a precise figure for reductions in health-care entitlements and then explained that the administration was seeking additional savings through fees and other initiatives. His language on the Sunday shows , especially on CNN, was too cute by half.
One Pinocchio
(About our rating scale)“If bullshit was currency, Joe Biden would be a billionaire.” - George W. BushComment
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Going off cliff would be far worse than paying more taxes for millionaires....
More Than 300,000 Millionaires Could Go Off 'Cliff'
CNBCBy Robert Frank | CNBC – Tue, Dec 4, 2012 11:24 AM EST
The cost of taxing the rich has become the central debate in the "fiscal cliff" talks.
But the costs of not getting a deal might be even worse for the country - including the wealthy, according to a new study.
The population of millionaires in the United States would fall by 315,000, or 6 percent, next year if the country goes over the fiscal cliff and the economy goes into recession as a result, according to a new study from WealthInsight. The total fortunes of millionaires would fall by $240 billion if the cliff's combination of tax cuts and automatic reductions in government-spending were to take effect.
If the United States can solve the cliff deal and chalk up 2 percent growth next year, the number of millionaires would grow by 230,000, and their combined fortunes would soar to by over $1 trillion, WealthInsight's study said.
That sounds like good news, but WealthInsight, the London-based wealth-research firm, said that if the threat of the cliff didn't exist at all, the millionaire population would grow by 443,000 and their fortunes would grow by $1.6 trillion.
Still, even if the cliff is avoided, the solution could also drag down the number of millionaires.
"There also remains the possibility of a fiscal slope: a growth-sapping bargain which prompts a damaging degree of fiscal tightening," Wealth Insight said.
That uncertainty, along with looming tax hikes, will lead the wealthy to put their money next year into different types of investments. Alternative investments (hedge funds, private equity) will be the top-performing asset class for millionaires between now and 2016, according to WealthInsight.Comment
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When legalized theft and gambling become the only "growth industries" in the USA, that's a serious problem.
On the other horn, if every last one of these crooks ceased to exist tomorrow, it would be a great day for America. Especially if they went broke from paying back taxes.Eternally Under the Authority of Satan
Originally posted by SockfuckerComment
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We went off the cliff a long time ago. We are just waiting for the crash.No! You can't have the keys to the wine cellar!Comment
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When you have over $100 trillion in debt (when you add in the unfunded liabilities on the balance sheet) and have interest rates pegged at zero you have gone over the cliff. The only way to fix it is erase the debt by ruining the value of the US Dollar which of course hurts people living on fixed incomes and people trying to save something. Of course if you know what the long-term plan is you don't get hurt but the mass majority of people get hurt.
The fiscal cliff in the media now is staring at the bark on a tree. It's two political parties with no real solutions positioning themselves to get an edge to blame the other party. The problems are way bigger and more complex than some taxes going up or raising the debt ceiling which of course they are going to do anyways.
You have to remember most people who own US dollars don't live in the US so they have no real interest in seeing it get killed. If Bernanke kills it they get burned but the US Government doesn't want to pay anybody so they are devaluing the currency and that causes everyone else to devalue. So we are in a currency war with a bunch of idiots in Washington DC trying to save their political careers playing short-term blame games and kicking the can to the next December.
The politically connected rich like Timothy Giether don't pay taxes anyways. He got caught not paying taxes and nothing happened to him. Much like a certain president committing perjury and nothing happening to him. For us little people we get fined and tossed in jail.
So the problem is we have two separate systems. The rules don't apply to the politically connected but they apply to us and it's gotten more and more blatant and obscene and there lies the problem. The politicians could care less about us actually. As soon as you realize that, you have figured the problem out. The people running things are in a big club and you aren't in it and they don't care about you. Yeah. I would say that's the problem. It's always the guy in the middle that gets burned the most and let's be honest here. There is no middle class in the US anymore. Who's kidding who.No! You can't have the keys to the wine cellar!Comment
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This is the same shit I've been hearing for at least 20, if not 30, years. Yes, we have too much debt, the average American doesn't save enough, etc. But the sky is not falling, Geithner isn't "da' Dev'bil!" there Kathy, and with luck he'll be paying higher taxes. And you really think Geithner couldn't be earning more money doing something else?
And Bernake is a genius, whether you hate him or not, he's extremely competent and adept at what he does. We have real problems with entitlements like Social Security and Medicare, but being Chicken Littles about it is just both silly and counterproductive...Comment
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Originally posted by conmee
If anyone even thinks about deleting the Muff Thread they are banned.... no questions asked.
That is all.
Icon.Originally posted by GO-SPURS-GO
I've seen prominent hypocrite liberal on this site Jhale667
Originally posted by Isaac R.
Then it's really true??
The Muff Thread is really just GONE ???
OMFG...who in their right mind...???
Originally posted by eddie78
I was wrong about you, brother. You're good.Comment
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It's evident Obozo wants tax increases on everyone since he evidently can't negotiate in good faith.“If bullshit was currency, Joe Biden would be a billionaire.” - George W. BushComment
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What's to negotiate? The majority of Americans are on Obama's side and think the Replutocrats are being fuckwits beholden to their rich benefactors...Comment
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Originally posted by conmee
If anyone even thinks about deleting the Muff Thread they are banned.... no questions asked.
That is all.
Icon.Originally posted by GO-SPURS-GO
I've seen prominent hypocrite liberal on this site Jhale667
Originally posted by Isaac R.
Then it's really true??
The Muff Thread is really just GONE ???
OMFG...who in their right mind...???
Originally posted by eddie78
I was wrong about you, brother. You're good.Comment
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You miss the entire fucking point, just like most liberals. Without tax increases on the rich, the yearly deficit will be 1.10 Trillion. With the tax increases Obozo wants, the yearly deficit will be 1.02 Trillion. You see how much tax increases on the upper 2% really makes a difference? That's right, it doesn't, other than tossing thousands of people out of their jobs. What matters most is spending cutbacks, something Obozo doesn't want to talk about. Couple that with his wanting an uncontested limit for borrowing money (aka the debt ceiling), and you have a no go on a deal.“If bullshit was currency, Joe Biden would be a billionaire.” - George W. BushComment
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Spending cutbacks are fine, as long as it's the TRULY wasteful spending.
Which means you know the difference between spending and investing. And in full analysis, any SANE person would admit that the first thing to go is the bloated "defense" budget. Which should be no larger than what it actually takes to defend the USA, and not a penny more.Eternally Under the Authority of Satan
Originally posted by SockfuckerComment
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No! You can't have the keys to the wine cellar!Comment
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