Isakson: Revenue’s been dealt with, on to spending
The fiscal cliff is dead. Long live the fiscal cliff!
If you were unsatisfied with the deal struck last week or just miss the D.C. drama, fear not. We’ll be back at the abyss soon.
In March, the so-called sequester budget cuts stand to kick in; appropriations for federal operations will dry up; and the Treasury will run out of ways to pay the bills without raising the debt ceiling. As Congress faces that unholy trinity, Georgia’s Johnny Isakson will be right in the thick of things.
The second-term GOP senator was named Thursday to the Senate Finance Committee, which handles those big budgetary matters. Having to face those three pressures at once actually gives Isakson “some degree of optimism.”
“Because it is such a confluence of things, maybe we’ll get a macro deal instead of a micro deal,” Isakson said by phone Thursday.
Isakson has yet to attend his first meeting as a Finance member, but he knows where he wants the debate to go. “I think the revenue issue has been dealt with,” he said. “I know the president probably thinks there is some more revenue somewhere, but we’ve had the revenue debate. No one can say that wasn’t a thorough analysis of the revenue situation.”
Now it’s time to tackle spending, especially Social Security and Medicare.
“Most everyone [in the Senate] understands Social Security is the easiest to fix without harming current beneficiaries or beneficiaries in the reasonable future,” he said. Raising the eligibility age gradually over time is one way. Two others are making benefits less generous for high earners or tying benefit increases to changes in prices rather than wages.
Medicare, though, is “the big, big consumer of dollars,” Isakson said. It’s “the big gorilla” that’s “already running rampant.”
He prefers the “premium support” plan pitched by Rep. Paul Ryan and some Democrats. “That way you can gauge the cost [to taxpayers] and you engage the consumer more” in being cost-conscious than with today’s fee-for-service plan.
Whatever the specifics of a March deal, Isakson emphasized the need to let the legislative process work. He reported “universal frustration” among senators that last week’s deal was struck “by two people [Senate GOP Leader Mitch McConnell and Vice President Joe Biden] in a back room.”
He noted the irony that last week, while those talks went on behind closed doors, the Senate engaged in a now-rare regular order of business, with debate on the floor and the opportunity for all senators to offer amendments.
“I think [regular order] would help the public to understand the difficulty of the problem, but also the mechanism of the solution,” he said.
Isakson prefers to work off the Simpson-Bowles proposal introduced in late 2010. That plan would reduce deficits by $4 trillion over 10 years by cutting spending and making the tax code simpler and flatter to generate more revenue.
He expressed great frustration with President Barack Obama, who commissioned the plan but whose own proposals, especially for taxes, contradict its methods: “I don’t know if he was afraid of it, or if he is so bent on spending and raising revenues, and so averse to fiscal accountability, that he didn’t want to bring it up.”
In any case, Isakson sees no good reason for Washington to break down into its own March madness. “All the solutions are on the table,” he said, “it’s just a matter of which ones you pick up and use.”
– By Kyle Wingfield
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191 comments Add your comment
sailfish
January 7th, 2013
3:18 pm
dusty
I don’t hate him, but his remarks about obama picking chuck hagel for defense, a man with similar views to bob gates, is idiotic and not the least symptomatic of someone who is “smart”.
Lil' Barry Bailout - OBAMAPHONE!!!
January 7th, 2013
3:28 pm
sailfish, I’m aware of the so-called subsidies. I was asking you to back up your assertion that I favor them.
Didn’t think so.
Reality
January 7th, 2013
3:36 pm
I think that President Obama’s selection of Chuck Hagel shows a lot about Obama the man. He really is trying to be inclusive. Sure, he could have selected someone from the far left, but he did not.
As he said, himself, he simply looked for the person that would do the best job.
Now, republicans will say that President Obama was not “smart” in this decision. This doesn’t shock me. The reason is because republicans have a General Sherman approach to politics – burn everything and anything that doesn’t agree 100%.
This is not President Obama and it is not the Democratic Party. The ideology is about doing the best thing possible for the Country and her people. If this looks stupid to republicans, then so be it.
Aesop's Fables and other Lib Economic Theories
January 7th, 2013
3:41 pm
pmsNBC political director Chuck Todd said Monday there is a “soft count” of 10 Senate Democrats who might oppose Chuck Hagel’s nomination to head the Department of Defense.
Dusty
January 7th, 2013
3:58 pm
Cheesy, @3:04
You are correct that there is no reference to God in our Constitution, Just in mottoes and allegiances such as “IN GOD WE TRUST”. The framers of the Constitution put it together to show that the new government should not involve itself in religion.. The insisted that all should have freedom.
That doesn’t mean none of them had faith. That is where you are wrong. They could not have established a country like ours without faith. Washington labeled religion and morality “a necessary spring of popular government.”
By the way, have you noticed that presidents take their oath of office with their hand on a Bible? Ever wonder why?
Aesop's Fables and other Lib Economic Theories
January 7th, 2013
4:08 pm
Dear Urinal – You may want to go downstairs and check on the old Commodore blog server cause it seems to have checked out for the day.
Aesop's Fables and other Lib Economic Theories
January 7th, 2013
4:36 pm
What are you guys running at the AJC, Windows 95?
Dixie
January 7th, 2013
4:47 pm
Ben Franklin was a member of the “Hell Fire Club”.
BW
January 7th, 2013
4:53 pm
Wait he advocates the Simpson Bowles approach and yet the revenue generated in the fiscal cliff negotiations come nowhere that level and he’s done with revenue? And which Democrat has advocated for privitizating Medicare which is what premium support is? What has prevented the House from using the normal order of business of passing bills out of committee? If the issue is about privitizating Medicare vs adjusting benefits within the current structure, then won’t be a deal in three months. I’ve seen no evidence of the leading Republican voices not trying to completely do away with the Great Society programs. Privitization is doing away with the program no matter which buzzword is used. Unless the Republican senators filibuster everything bill after it is passed through normal procedure, there will be a Democratic Senate bill and a House Republican bill that will need to be reconciled. I simply don’t think that the sides will not relitigate the election on this matter.
Rick in Grayson
January 7th, 2013
5:56 pm
“while those talks went on behind closed doors, the Senate engaged in a now-rare regular order of business, with debate on the floor and the opportunity for all senators to offer amendments.”
=====
Is this where the Senate Democrat filled the bill with PORK that they haven’t been able to get passed (as earmarks) for their constituents (Hollywood, NASCAR…)?
Aesop's Fables and other Lib Economic Theories
January 7th, 2013
6:34 pm
It is about the acceptability of the worst expression of anti-Semitism, the accusation of disloyalty. There is no other meaning to Hagel’s phrase “Jewish lobby.” The declaration from Hagel that he is not “the senator from Israel” (Who said he should be?) is again a direct attack on Jews’ fidelity to the United States.
Senate Democrats, especially those up for re-election in 2014 will face a vote that can’t be fudged. It is a binary choice: Do they approve Hagel’s rhetoric and extremist views or not? He is far out of the mainstream of both parties on everything from Russian anti-Semitism (his 99 colleagues implored Russia to cease anti-Semitic conduct, but not he!) to Hamas to Iran sanctions. In addition, potential Democratic candidates will come under tremendous heat to stand up to the president on this one. – Washington Post
Excellent pick, obozo, excellent pick.
MarkV
January 7th, 2013
6:42 pm
Hagel is, indeed, an excellent pick. The presumed anti-semitism is a slander.
Attack Dog
January 7th, 2013
6:45 pm
The trillion dollars in spending cuts were made last year (We know Dixiecans keep forgetting) and $600 billion in revenue last week is not balanced. My calculations says that Republicans should come up with an additional trillion dollars in closing tax deductions and loopholes and the Democrats must come up with an additional $600 billion in revenues. Dang, I didn’t realize an elephant could squeal that loud!
Attack Dog
January 7th, 2013
6:49 pm
On Hagel. Neo-cons are anti-semetic but are pro-Israel. On the other hand old school conservatives are pro-Jews but anti-Israel. Either way, it is clear that conservatives love the military industrial complex.
Attack Dog
January 7th, 2013
6:55 pm
Dear Dixiecans. I guess Johnny or Clarence would be better than Chuck? ROTFLMAO! Tell us again how much we will save since we killed Bin Laden and by not trying to find 30-year old WMD in the North, South, East, and West? Or what about the knowns and unknowns, and has Rumsfeld figured out the known-unknowns yet? SMHACMAR
Attack Dog
January 7th, 2013
6:56 pm
OK, it means “Slap My Head And Call Me A Republican.”
Hillbilly D
January 7th, 2013
6:57 pm
In March, the so-called sequester budget cuts stand to kick in; appropriations for federal operations will dry up; and the Treasury will run out of ways to pay the bills without raising the debt ceiling.
And we’ll go through the same silly games again and with a little bluster and some creative accounting, they’ll kick the can a little farther down the road.
Aesop's Fables and other Lib Economic Theories
January 7th, 2013
6:58 pm
In 2008, Al Jazeera threw an on-air party for Samir Kuntar when he was released from an Israeli prison. Kuntar led a Palestine Liberation Front terrorist team that kidnapped an Israeli family in 1979. He shot the father and killed the 4-year-old daughter by smashing her head against rocks along the beach. In footage available on YouTube, Al Jazeera’s Beirut bureau chief hands Kuntar a scimitar to cut the celebratory cake and says: “This is the sword of the Arabs, Samir.”
In 2009, Yusuf al-Qaradawi, host of the network’s most popular Arabic-language show, “Shariah and Life,” said on air (also available on YouTube): “Oh, Allah, take this oppressive Jewish, Zionist band of people. Oh Allah, do not spare a single one of them. Oh Allah, count their numbers and kill them, down to the very last one.” Perhaps Mr. Gore doesn’t have access to YouTube.
What would you call this one, Mark?
Kyle Wingfield
January 7th, 2013
7:00 pm
As per the new usual, all comments will be going through moderation until tomorrow morning.
Attack Dog
January 7th, 2013
7:01 pm
Back to spending Republicans. Why do you keep saying that the President doesn’t have a plan, when some know that all spending bills come from the House? On the other hand, Boehner keeps being opposed to the President’s plan that he says he hasn’t made. Strange and Good night…Time for O-BAMA to beat up on Bo-Shorty!
Archibald Leach
January 7th, 2013
7:02 pm
Why do I never hear these so called fiscal conservatives talk about cutting defense spending? They always want to talk about cutting medicare and social security, the safety net for the old and poor
Dusty
January 7th, 2013
7:16 pm
Well, Hillbilly, we have a few months to get ready to jump, dive, or drive on. Then the Fiscal Fun & Folly show will be upon us. The chickens will come home to roost or somethng like that.
By the way, how are your feathered friends? Do they vacation during the cold months or snuggle up with their downy sides .and cluck away?
Would you believe I thought we had been “moderately” closed this afternoon. But everybody in Opinion seemed to be out too . So I decided that EVERYBODY can’t be “bad” at one time. So we are back in business I suppose. I went back to reading James Herriott’s Dog Book which is fun to read. Picked it up at a book sale. An oldie but a goodie..
carlosgvv
January 7th, 2013
8:20 pm
Barry, Aesop
One of the few things we can count on in this world is that you two always have been, and always will be, clueless.
Get Real
January 7th, 2013
8:26 pm
getalife….you would not know a fact if it hit you right between the eyes….here’s hoping
breckenridge
January 7th, 2013
9:26 pm
Dusty let’s examine the faith of our most important Founding Fathers. Thomas Jefferson was not a Christian. James Madison was not a Christian. John Adams was not a Christian. Ben Franklin was not a Christian. Washington cared nothing about religion, nor did Hamilton until his son died in 1800. John Jay of New York was the only “core” Founding Father that was a devout Christian.
The subject of religion was raised just once at the Constitutional Convention. One morning, after particularly difficult session the previous day, Ben Franklin suggested starting with a prayer. Roger Sherman of Connecticut seconded the motion. It was then met with a flurry of objections and the motion was defeated.
And no, Boy George Bush, who deserves every bit of ridicule that can be thrown his way, was not a good president. In fact he was an awful president, one of the worst of all-time, and a fiscal disaster to boot.
“An alliance or coalition between Government and religion cannot be too carefully guarded against……Every new and successful example therefore of a PERFECT SEPARATION between ecclesiastical and civil matters is of importance……..religion and government will exist in greater purity, without (rather) than with the aid of government.” Jame Madison, 1822
Old Timer
January 8th, 2013
12:15 am
Government spending. Wife went to doctor, waited two hours, did not see doctor and left. Later got a bill from doctor for the visit. Medicare paid doctor and he sent her a bill for the visit. Would you believe Emory? Now sending info to Medicare for this rip off.
luangtom
January 8th, 2013
12:17 am
It truly amazes me that the very people that robbed Social Security over the years are wondering why there is no money in the coffers for the future. Maybe if the Dept of Labor or some other agency could look into employers forcing capable workers into retirement the need to change age-limits would not be such a problem. I was forced to retire far earlier than I wished to. I had to make a choice of retiring early and maintaining my health-care insurance for a terminally-ill wife or to remain employed and not get a retirement medical-plan if I chose to work to 62 or 65. If I was forced out early, the employer could pay my replacement at a far lower rate and not pay for any health-care for their retirement years. So, out I went……….
Yes, Defense Department spending needs to be addressed. Why is this nation with personnel in over 100-countries world-wide? Why is our presence deemed necessary? If our personnel are needed in First World countries like Germany, Japan and South Korea, let them foot at least some of the bill for our presence. If we are not keeping the other countries from falling to some perceived enemy, then why are we there? Bring the troops home and put them on our own borders. Being state-side would certainly make more sense than being where we are not wanted. It would save money, for sure.
captguitarman
January 8th, 2013
1:45 am
Interesting Lou Dobb show tonight. Just a thought, but one worth considering. Pub/Cons, try to compromise on the debt ceiling with specific proposals regarding structural changes for social security and medicare and porky areas that can tolerate cuts. Even agree to some reasonable military cuts. The military cuts make up 50% of the sequester cuts, while taking up only 20% of the federal budget (all out of whack and why did the Pub/Cons agree to that, but it is done), so agree to a lower reasonable cuts numerber. And then when Obama and the Dem/Libs come back and play their fiscal cliff bait and switch card and say, no cuts without more tax increases . . . . just say OK. It’s all yours. We are done. No spending cuts, we won’t shut down the government over the debt ceiling, but let the sequester roll. You want these policies to remain in place without facing our biggest problem . . . out of control spending . . . then fine. You can own them. Spend all you want. Cut defense and lots of other things with the sequester, which was a fail safe action and not completely thought through. Go for it. It is all yours.
Pub/Cons. Stop playing this game. The cards are stacked against you. There is no way to come out looking good on what you want to do until the policies of the administration take us into another recession – or worse. Let Obama and the Dems have it and own it, and wait for the chickens to come home to roost, as they always do.
Paul
January 8th, 2013
10:40 am
““I know the president probably thinks there is some more revenue somewhere”
“making the tax code simpler and flatter to generate //more revenue’’.”
Looks like the President is correct. There is more revenue somewhere. Interesting Republicans are now on board with increasing taxes.
And has anyone on this blog ever shown how Social Security contributes to the current years deficit? Is this why Republicans focus on SS instead of on items covered by yearly appropriations?
Kyle Wingfield
January 8th, 2013
10:56 am
Paul @ 10:40: The inconsistency you highlight is one reason why it’s tricky to talk about “raising revenue” when you mean “raising tax rates.” Revenues will rise without changes in tax laws if the economy grows faster. That’s what Isakson meant, and I probably should have made that clear by writing it as:
“…to generate more revenue” through economic growth.
As for your question about SS: It’s been contributing to annual deficits in recent years because payroll tax revenues haven’t kept up with benefit payments. You can argue the money is coming from the bonds in the “trust fund,” but who has to pay back those bonds? The taxpayers. Either that, or we pay for the bonds by borrowing more money from others — issuing more bonds. The taxpayers will eventually pay back those bonds.
And, in reality, there’s no distinction between SS payments and what you term “yearly appropriations.” Congress can change what it pays in SS benefits at any time; they are as much a “yearly appropriation” as anything else.
Reality
January 8th, 2013
10:58 am
@Kyle -
You are now interepting the words of the con politicans? Hummmm… You would think that they would ’say what they mean and mean what they say.’ However, these are republicans, so we certainly cannot count on that!
Paul
January 8th, 2013
11:13 am
Kyle
My memory is that Republicans over the last couple of years fought against anything that would mean an increase in revenue. I remember the health care debate and the fixation on the word ‘tax’ as applied to a penalty for those who refused to buy insurance. There was talk having a healthy economy, having more jobs, which necessarily leads to an increase in revenue. It does seem acceptance of the need for more revenue, whether from increasing marginal rates or eliminating deductions to make more income subject to tax, is a shift on the part of Republicans that they’d rather not highlight.
Thanks for your take on how SS contributes to yearly deficits. My initial reaction is to say those bond prices are already built into the system. Aren’t those investments in Treasury securities done with the excess funds not needed to fund current expenses? I know, it’s a chicken and egg kind of discussion and I don’t expect a response, as you’ve other duties to attend to. The shortages began just in 2010, after the current deficit rate accelerated.
Yes, I agree SS needs to be modified again. A slight adjustment to the CPI for retirees and one or two other relatively minor adjustments should suffice. Yes, some Democrats will hold fast against that, but it’s to be expected.
But my main point is, with somewhere around 40 cents of every dollar in the budget not supported by current revenue, SS should be given proportional attention and not what appears to be nearly exclusive attention by Republican leadership. Because, as you well know, ‘fixing’ SS so current benefits are supported by receipts will not have that big an impact on yearly deficits.
From the 2012 Annual Report: “Social Security’s expenditures exceeded non-interest income in 2010 and 2011, the first such occurrences since 1983, and the Trustees estimate that these expenditures will remain greater than non-interest income throughout the 75-year projection period. The deficit of non-interest income relative to expenditures was about $49 billion in 2010 and $45 billion in 2011, and the Trustees project that it will average about $66 billion between 2012 and 2018 before rising steeply as the economy slows after the recovery is complete and the number of beneficiaries continues to grow at a substantially faster rate than the number of covered workers. Redemption of trust fund assets from the General Fund of the Treasury will provide the resources needed to offset the annual cash-flow deficits. Since these redemptions will be less than interest earnings through 2020, nominal trust fund balances will continue to grow.”
Thanks again for the perspective.
Tiberius - pulling the tail of the left AND right when needed
January 8th, 2013
11:41 am
I say let’s go back to the Clinton-era tax rates.
As long as you go back to the Clinton-era spending levels as well.
How about it, libbies?
Paul
January 8th, 2013
11:54 am
Tiberius
“Libbies”?
You think that’s where the problem is?
You really think Republicans would go along with a Defense budget reduction from this year’s @ $614 billion to a level of around $268 billion?!!?
Let me know when you’ve got Republicans on board with that.
Kyle Wingfield
January 8th, 2013
11:54 am
Reality @ 10:58: It’s more context than interpretation. That’s the entire reason people talk about tax reform of the kind envisioned in Simpson-Bowles.
Kyle Wingfield
January 8th, 2013
11:59 am
Paul @ 11:13: Yes, those “investments” were made with excess payroll-tax revenues. But because those “investments” — really, the price of spending payroll taxes on something other than the programs they’re supposed to fund — were made with the government rather than an outside entity, they really just represent borrowing against future tax revenues. Those future tax revenues, because of our aging population, will come from taxes other than the payroll levy. Hence, we’ll have to trim SS benefits (e.g. in the way you describe, which I support) and/or SS benefits will contribute to the deficit.
As for the GOP’s focus: I would say there’s a lot more focus on Medicare, which is the more rapidly growing problem. It’s just that there’s less consensus about what to do wrt Medicare, so you hear more about SS tweaks.
Paul
January 8th, 2013
12:03 pm
Kyle
I like the last paragraph. I agree – Medicare’s the big problem and that constituency will be quite a challenge.
JDW
January 8th, 2013
12:33 pm
@Tiberius…”As long as you go back to the Clinton-era spending levels as well.”
See my post of yesterday…you will find that most of that nut is in Defense.
Lil' Barry Bailout - OBAMAPHONE!!!
January 8th, 2013
12:36 pm
Paul: Republicans are now on board with increasing taxes.
——–
Not intended to be a credible statement.
Paul
January 8th, 2013
6:37 pm
Lil’ Barry
What part of “making the tax code simpler and flatter to generate MORE REVENUE” don’t you understand?
Michael H. Smith
January 8th, 2013
8:27 pm
Onto the next round: The debt ceiling.
Think anyone will remind dear leader obuma what he said about raising the debt ceiling when he was a Senator and Bush was President ?
