Deficit

“Will there be a deal to avoid the fiscal cliff?”

That was the question that rang out for months from policy makers, journalists, and concerned onlookers everywhere. And in the first few days of January, the American Taxpayer Relief Act was signed into law, resolving several of the tax and budget issues known as the “fiscal cliff.” Among other things, it requires the very wealthiest to pay a fairer share of taxes, extends tax credits that benefit hardworking families for five years, extends unemployment insurance benefits for a year, and delays across-the-board spending cuts for two months.

However, another series of fiscal showdowns are looming. Read more »

You may have heard about a new report claiming the Affordable Care Act will increase the deficit by $340 billion, rather than decreasing it by $143 as projected by the Congressional Budget Office. Now, there is a big difference between these two numbers, so you would be justified in asking how this new study could come to such a different conclusion from the CBO, the government’s own nonpartisan scorekeeper. The answer is by using some very fuzzy math.

It’s a little complicated, even for me and I’m a numbers person! But the issue is basically this: Medicare benefits are paid out of a trust fund. Legally, the trust fund can’t spend money it doesn’t have. So this new study is based on the assumption that when the trust fund is expected to run out, the government will simply stop paying for Medicare benefits. This is important because one way the ACA reduces the deficit is through long term Medicare savings. The new study argues that these savings shouldn’t be considered, since the Federal Government won’t be paying for Medicare benefits eventually. Basically, if the government wasn’t going to spend the money anyway, we shouldn’t consider this money “savings.”

But frankly, this is bogus. Does anybody think that the government is really going to cut off health care benefits to millions of seniors? Read more »

This morning, President Obama released a deficit reduction plan that calls for $1.5 trillion in new revenues from the country’s richest individuals and corporations. Thankfully President Obama recognizes that we can’t let millionaires and billionaires enjoy tax breaks that make our deficit larger and put the burden of debt on the most vulnerable Americans. Read more »

A new report by the Institute for Policy Studies reveals that of last year’s 100 highest-paid corporate CEOs, 25 took home more than their company paid in 2010 federal income taxes. The report found that these corporate chief executives – CEOs of International Paper Company, Prudential, General Electric, Verizon, Boeing, and eBay, among others -- averaged $16.7 million in pay. At the same time, a combination of tax shelters and loopholes allowed those companies to avoid an average of more than $400 million each in federal taxes.    Read more »