Monday, September 19, 2011

Thoughts on the "Super Committee"

As you may know, the “super committee” is charged with coming up with at least $1.5 trillion in savings over the next ten years or so.  Should the committee fail to produce those savings, and should Congress fail to vote (and maybe pass) those recommendations by the end of December, automatic cuts go into place beginning in 2013.  (which, of course, will happen)

I’ve read where some on the committee are willing to reform Medicare and Social Security if other members will consider increasing taxes (or tax rates).  Some members favor some kind of grand bargain that will encompass major entitlement reforms.  I say there’s no need to consider increasing taxes to gain the right to reform Social Security or Medicare.  No, that will happen on its own, because these two entitlement programs are rapidly spinning out of control and will need addressing regardless. 
Social Security has already begun paying out more (in benefits) than it takes in (payroll taxes), which wasn’t supposed to happen until many years down the road.  An unfavorable economy coupled with lower tax revenue, and an increase in claims has pushed the program faster toward default.  Medicare is in even worse shape with costs set to explode as baby boomers retire en masse.  These two programs will go bankrupt soon enough, and to cave on taxes now would be short-sighted, in my humble opinion.

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