CUTS TO MEDICARE, MEDICAID, SOCIAL SECURITY, SNAP, LIHEAP

The safety net, meant to take some of the rough edges off of capitalism, that has long been a part of America is being steeply eroded.  AARP has an article listing the cuts to health and assistance programs in the Federal government.  You are urged to read the whole article because I have summarized only a small part of the listings (the URL is long but I have tested it).

President Trump unveiled his federal budget proposal Monday, which takes aim at many of the health and safety net programs that older Americans rely on. The plan sharply reduces funding for Medicare, Medicaid, Social Security Disability Insurance and food stamps.
.............................................................. 
Medicare The budget cuts $237 billion over 10 years.

Medicaid The spending proposal give states more flexibility. The plan includes:

• Repealing the Affordable Care Act’s Medicaid expansion.

Food Stamps The budget would fundamentally change the way the program works. The proposal includes:

• Slashing the Supplemental Nutrition Assistance Program (SNAP) by $213.5 billion over a decade.

Social Security The budget plan would cut $72 billion over 10 years in the Social Security Disability Insurance and Supplemental Security Income programs. 

Low Income Home Energy Assistance Program (LIHEAP)

The budget would end this program. The proposal includes:

• Eliminating the $3.4 billion annual funding.

https://www.aarp.org/politics-society/government-elections/info-2018/trump-budget-affects-seniors-fd.html?cmp=EMC-DSO-NLC-WBLTR---MCTRL-021618-F1-2763397&ET_CID=2763397&ET_RID=10705690&mi_u=10705690&mi_ecmp=20180216_WEBLETTER_Member_Control_Winner_339600_465104&encparam=DSbpmFDpjN54nJMGDfr2hTFBOcS7LNFfJGOFYJjEh%2fc%3d

HILLARY CLINTON AND THE COMPETITION

Remember month's ago when it was feared that Hillary Clinton would not be tested in the Democratic nomination process?  Now the worry is that the party cannot be brought back together.

In Kentucky, Clinton took the cities and Sanders took the rural areas, especially the coal country.  I don't know why the coal country favored Sanders over Clinton as Sanders is as much against coal as Clinton, maybe even more so.

Hillary's two opponents - Trump and Sanders - surprisingly share a number of viewpoints such as:*
Both being against foreign trade such as the Trans-Pacific Partnership (TPP) deal;**
Both opposed the Iraq War;
Both flip-flopped on gun control;
Both are against big money in politics (though Trump's claims of  self -funding are false);
Both want to get rid of Obamacare (ACA) and replace it with a single-payer plan;
Both want to increase taxes on some or all of the wealthy (Trump notes " carried interest" of Hedge  funds);
Both support maintaining or expanding the current levels of Social Security benefits;
Both are concerned about the effect of illegal immigration on American jobs.
Both Trump's and Sander's claim the system is rigged and their followers have gotten violent or said violent things.

But of course there are differences also.  I'm not sure how serious Trump is to deporting all the illegals, but I think he is serious about building the wall on our Southern border. with Mexico.  I say this because Trump likes to build things.  Just think, "The Great Wall of Trump" to compete with The Great Wall of China.

* http://www.theatlantic.com/notes/2016/01/what-bernie-sanders-and-donald-trump-have-in-common/422907/
** Though Hillary recently has come out against TPP, I suspect that she will flip back when (if?) she becomes president.

CAN IT HAPPEN?

There are Republicans and members of the heirarchy of the Tea Party that would like to do away with things like Social Security and Medicare, and, of course, Obamacare. Others would just like to reduce them to help balance the budget, something that must be done at some point. But would it be possible to do away with them? It is not clear that at the grass roots level that Tea Partiers share this goal, for instance (http://campaignstops.blogs.nytimes.com/2011/12/26/whose-tea-party-is-it/?nl=todaysheadlines&emc=thab1).

Suppose we got a clever Republican administration like that of Bush-43 that wanted to do away with them. I imagine that first a part of your Social Security payments would go into something like a 401k. Then more and then more until the whole thing was a 401k. Also somewhere along the line it probably would be made voluntary. So Social Security would be no more.

Medicare would suffer something equivalent to Social Security. It, no doubt, would start with vouchers as in the Ryan plan. With time because of inflation the vouchers would pay less and less of your medical expenses. And of course, it would be made voluntary at some point. And perhaps at some point the vouchers would just be discontinued.

Now the Bush-43 like administration would concentrate on convincing the voting public to go along with this plan, and they would use all the wiles they used to get us to go to war in Iraq to getting rid of Social Security and Medicare. I'm not sure what they would do, but truth would be no object just as it wasn't with us going to war in Iraq. Could this happen? I don't know, but the current candidates for the Republican presidential nomination certainly sound like they would like to do this. Perhaps they could somehow make it unpatriotic to be against doing away with Social Security and Medicare just as they did with the Iraq war.

Could it happen?

"AFTER YOU ALPHONSE*

No, after you Gaston."* The president has recommended small but substantial cuts to the Federal Budget on an amount totaling only about $500 billion of the Federal Budget (Freeze the budgets of these agencies at 2011 levels. Freeze Federal Employee's salaries for two years.). Note that the $500 billion of agencies being considered for cuts (Commerce, Interior, DOD, DOE, EPA, HUD, Agriculture, etc.) is only about 40% of the Federal deficit so you could eliminate them completely and not come close to balancing the budget. The congressional opposition says he punted.

What they want is the president to propose substantial cuts in entitlements (Social Security-23% and Medicare-12%) which, along with payments on the Federal debt(11%), are a substantial part of the budget - 46% in 2003, for example.** This is the "After you Alphonse." But the president was the Republicans to propose the cuts first which is the "No, after you Gaston." Certainly, you cannot approach a balanced budget without substantial cutting of Social Security and Medicare and perhaps other entitlements (Medicaid-7%, means tested entitlements-6%, and mandatory payments such as pensions-6%).

So far Republicans have refused to approve any increased taxes, particularly on the wealthy, which must be another part of the equation toward a balanced budget.

So this is what I think may happen. The president will continue to offer small but substantial cuts to the Federal budget. Eventually there will be a horse trade with the president approving some cuts to Social Security and Medicare as well as core agencies and departments with Republicans agreeing to some increases in income tax on the wealthy and oil companies. It must be done together.

What kind of cuts? For details of the presidents proposals for 2012, see: http://www.huffingtonpost.com/2011/02/13/obama-budget-proposal-cut_n_822689.html (Scroll down to see cuts to Departments and Agencies. Note that some agencies are recommended for massive budget increases: Dept. Education - 38.5%!)

But to really get to a balanced budget, we need a rapidly growing economy with significantly increasing employment. After all, the Federal revenues as a share of the nation's economy are near a 60 year low: http://www.suntimes.com/business/3706985-420/taxes-too-high-theyre-actually-at-60-year-low.html.

Something that should be seriously considered is to let corporations repatriate foreign profits at a 5% tax rate. This might generate something like $50 billion that could be applied to the deficit, another small step but a significant one. And the repatriated funds might also add to the economy, even if they were distributed as special dividends by the corporations (but not purchase of existing stock). Although this has been mentioned, I don't know if anyone in congress or the president has actually proposed it.

* http://en.wikipedia.org/wiki/Alphonse_and_Gaston

**http://wiki.answers.com/Q/What_percentage_of_the_U.S._federal_budget_is_spent_on_entitlements