LyrArc Article Gist
Posturing and negotiating between Republicans and Democrats on deficit reduction before the "fiscal cliff" of automatic spending cuts and tax increases on Jan. 1, 2013.

LyrArc Article Gist
CEO's of more than 80 large U.S. companies have come together behind a plan that would reduce the U.S. federal deficit with tax revenue increases and reduced spending. The CEO statement was organized by the Fix the Debt campaign, a bipartisan effort inspired by Republican Alan Simpson and Democrat Erskine Bowles of the 2010 Simpson-Bowles Deficit Commission. The CEO statement calls for an overhaul of the U.S. tax code to eliminate or reduce deductions, credits and loopholes (reduction of tax expenditures also referred to as "broadening the base"). The CEO statement says any fiscal plan to succeed has to control increases in health care spending, make Social Security solvent, and include "comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit." This is the first time a large group of business leaders have supported raising taxes as part of an overall solution. This puts together elements of the Bowles-Simpson plan, reduces deductions and loopholes, lowers rates as part of overall tax reform and cutting spending. The CEO statement says the Simpson Bowles recommendations for $3 in spending cuts for every $1 in tax increases was an "effective framework" for tackling a problem that affects the economic well being and security of the U.S....

LyrArc Article Gist
President Obama's proposal on Dec. 17, 2012, in the fiscal cliff negotiations sets the figure at which Bush era tax cuts are permandently extended at $400,000 instead of the $250,000 in earlier proposals. Speaker Boehner's Republican proposal was for a figure of $1 million. The $400,000 proposal would mean that the top tax bracket of 35% would increase to 39.6%. Currently the tax rate increases to 35% from 33% at the cutoff point of $388,500. The White House plan now cuts spending by $1.22 trillion over 10 years. $800 billion comes from cuts to programs, with half of these cuts in federal health care programs, $200 billion in programs like farm price supports, $100 billion in military spending, and $100 billion in other domestic programs over which Congress has control. The White House proposal also supports additional spending on infrastructure, extension of expiring unemployment benefits, protection of "vulnerable populations" such as the disabled and wounded veterans on Supplemental Social Security benefits in inflation calculations, and permanently stop expansion of the alternative minimum tax affecting the middle class. On business investment the president's proposal would make permanent the credit for corporate research and development....

LyrArc Article Gist
How the deepening downturn is leading Brown and Labor and the liberal Democrats who had rejected tax cuts for so long to now advocate large tax cuts, with the Conservatives arguing for fiscal discipline when they had argued for taxcuts on principled grounds for most of the last decade. A tax cut of 15 billion pounds or $23 billion was mentioned by the Institute for Fiscal Studies. Strange things are happening.

LyrArc Article Gist
The BBC Fact check for crime, cost of living, immigration, world affairs is shown next to this transcript of the former president's speech at the Republican National Convention in Milwaukee, July 2024. The biggest issue is cost of living, for housing, food and groceries, gas and automobiles new and repairs. "I will end the devastating inflation crisis immediately, bring down interest rates and lower the cost of energy . We will drill, baby, drill. Prices will start to come down." Fact: Gas prices may come down a bit, but it will do little or nothing for the other major components of cost of living - for housing and mortgage rates of 6-7%, for automobile prices and auto repairs, for food and groceries.The problem of job creation will come to the fore because of an inherent contradiction of trying to commit to Republican old platform of tax cuts for the wealthy and efforts to take cost of living action for the now larger lower and middle classes. Without this money that goes to tax cuts for wealthy there is not much to invest in Make at Home, in manufacturing in US the way Biden is doing and plans for next 4 years creating hundreds of thousands of jobs every month and still keeping inflation low at 3% through an investment driven economy. ...

LyrArc Article Gist
Christina Romer, former chairwoman of Obama's Council of Economic Advisors, puts forward a strategy to get deficit reduction and avoid the "fiscal cliff" of automatic cuts based on the Simpson-Bowles commission recommendations to reduce tax expenditures, deductions and loopholes. She says let Republicans in Congress determine where spending on infrastructure improvements should go as the needs are so diverse and widespread and this will get constructive input to improve the focus on vital areas. Earlier efforts on road building for stimuls spending were criticized for generating temporary work but not creating long term benefits and synergies.

LyrArc Article Gist
Boeing is working out pricing on its new 777X jet to include the fuel efficiency savings made by airlines using the new aircraft. The new plane would save 20% more fuel per seat than the current 777 jets. Airlines spent $210 billion on fuel in 2012. About half the cost of a long range flight is on fuel.The Dreamliner price is at about $290 million. The 777X could be priced around $400 million, with discounts bringing this down to above $200 million for the 400 seat aircraft. Earlier pricing efforts by Boeing on the 787 Dreamliner were based on manufacturing costs going down with a significant portion of work done by suppliers. After problems in manufacturing, supplier issues and the learning curve, Boeing will take a more conservative approach to pricing this time without the steep discounts in earlier periods. In pricing the A320neo EADS passed on half of the fuel efficiency savings to buyers, and only half added to the price.

LyrArc Article Gist
Paul Ryan asks President Obama to put forward his plan for deficit reduction the day after the passage of the August 2, 2011 Debt Ceiling and Deficit Reduction bill in Congress. Ryan points out that health care cost increases are on an unsustainable path with costs going up by 8% in 2011 and projected to go up by 8.5% in 2012. The Obama Health Care legislation tries in Ryan's view the same failed bureaucratic efforts of the past to cut health care costs. Without a genuine and sure plan to cut costs the only way to pay for Medicare with new mandates is to increase taxes again and again. He cites the CBO's Long Term Outlook in June that total tax revenues would have to double by 2050 to finance the current rate of spending on Medicare and other programs. For Ryan the failure of the Obama administration to come up with its own plan for deficit reduction after passing the Health Care legislation- with expanded mandates and no certain cost control in the reform - is the most difficult to swallow. ...

LyrArc Article Gist
Eduardo Porter compares Italy's propensity to collect and invest tax dollars in healthcare and public services to a much greater degree than the U.S. In 2007 he points out Italy spent 25% of its output on social programs such as health, food and housing, compared to 16% in the U.S. He reflects on the possible reasons for this based on research. Italians see the tax dollars at work in a health care system that works for them and their children, as in this example of Eduardo and his child at a health clinic in Liguria, Italy. In the U.S. there is less evidence of this and the sense that government is likely to waste tax dollars, that the individual is better able to make choices. The less homogenous society in the U.S. also means there is less support for public services that might benefit other lingusitic and cultural groups.There is also the feeling that in American society there is greater oportunity for the less well off to join the upper class given the open capitalist framework, as compared to Italy where connections and traditional advantages matter. Some experts attribute this to smaller taxes leading to economic growth, but Porter says the examples of Sweden, Norway, and Japan showed growth was higher or similiar to that in the U.S. ...

LyrArc Article Gist
Retirement in America 2026- what to watch out for- $6500 per month full time home health aide. There is  $45.8 trillion in US IRA's 401 (K)  in 2026. It was half that in 2015. People are saving more 8-12% of income. A lot of it invested in arget dated mutual funds. Yet older Americans, seniors are facing poverty- 15% in 2025 compared to 10.7% of older Americans living in poverty in 2021. cost of living has hit this group the hardest. Removing the tax on Social Security could be prescient, popular and fair for these Americans, as suggested by DJT. If invested well this $45 trillion could give the US leadership in investment for decades to come as it grows with good management of investments raising living standards and financing the Nation's rebuilding of infrastructure in all areas.

LyrArc Article Gist
Charlie Rose talks to Bowles and Simpson of the President's Deficit Commission. On health care and Paul Ryan's point that the Deficit Commission did not take on health care, Simpson says they did not do as much as Paul would like to see, but they have $500 billion in cuts for the next 10 years. Simpson says its garbage to say that they balanced the budget on the backs of Social Security, and Bowles says they took a very balanced approach. With the Social Security Trust fund running out in 2037, Bowles-Simpson raises a little bit of revenue, benefit cuts mostly on upper-end people. On the Bush tax cuts Bowles says, if you give more tax cuts you lose revenue. Their approach was to broaden the base, bring down rates. Bowles points to $1.1 trillion worth of tax expenditures, what he calls spending, in the tax code that benefit mostly upper-end people. Some of these are mortgage interest deductions, deductions for state and local taxes, charitable deductions, and he says their approach was to eliminate those and bring tax rates down to 8%, 14%, and 23%, and the corporate tax rate down to 26%....

LyrArc Article Gist
This NYT editorial says the Pfizer bid to acquire Astra Zeneca is an inversion, a tax maneouvre using openings in U.S. and British tax laws that allows an American company to incorporate in London by acquiring a British company. In effect Pfizer beomes a subsidiary of the British company. This reduces taxes owed even though business takes place at Pfizer as before. NYT says 25 companies have adopted inversions since 2008. The top corporate tax rate in Britain at 20% is lower thant the top rate of 35% in the U.S. Additional tax maoeuvres could make it easier for income shifting to tax havens, and make it possible to free up cash held in foreign countries without the need to first repatriate it to the U.S. The problem is that such maneouvres are taking place at a time of large U.S. deficits, and deep cuts in public services and government investment in R&D, infrastructure, education, that would lead to future economic growth.

LyrArc Article Gist
One way US president Biden hopes to pay for replacing America's crumbling infrastructure is by bringing back the principle of fair sharing of the tax burden to 45 of America's largest companies. Companies like Amazon, Apple and Google would now pay the minimum corporate tax rate of 15%. The idea of a global minimum tax rate is put forward by US central bank chief Janet Yellen and the US Treasury Department, and also by president Biden. Over four decades China moved from a nation of bicycles to some of the newest infrastructure in the world just as the US and Europe's infrastructure decayed and was not renovated. There is a sense of awareness today that this decay of  infrastructure should not have been allowed to happen, that it is essential for the welfare of the countries and the people of America and Europe.

LyrArc Article Gist
The failure of the 117th Congress to pass key parts of president Biden's agenda for hard hit families and workers in America is now taking place. The 50-50 standoff in the US Senate and failure of two Democrat senators Sinema of Arizona, Manchin of West Virgina to support Biden's Families and Workers Plan leaves key parts of the safety net being left out. This leaves out the education, and paid leave part of the agenda and provisions for utilities to accelerate shift away from coal out of the bill. It fails to implement a new national agenda for upward mobility, child care and paid leave to help stressed out mothers and families. The failure to include even a modest community college 2 years of support at a time when men's college enrollment is dropping to disastrous levels for America's economic competitiveness is a failure of the 117th Congress to grasp the needs of families and workers in America today. Only a new Congress in 2022 can take up the needed action for families and workers in education, health care, child care and help for families. The passage of the infrastructure bill and the current version of the social spending bill can only be seen as a first step in the right direction, after three decades of different administrations neglecting infrastructure, education, healthcare, childcare, elderly care, upward mobility, and climate change. On the plus side as the first step to restore dignity and health of families and workers in America it includes- $150 billion for rental assistance, home buying help, public housing repairs, and building 1 million affordable housing units. $150 billion for federal programs for home health care and community care for older Americans and people with disabilities $165 billion to reduce premiums for people under Affordable Health Care Act, cover additional 4 million through Medicaid, adding hearing coverage but not dental or vision to Medicare. $200 billion for child care tax credit to parents. $400 billion to reduce health care costs and give universal pre-kindergarden for 3-4 year old children. $40 billion for worker training $555 billion for fighting climate change including through tax incentives for sources of energy that are low emission and low carbon. It will be paid for by additional taxes on incomes of very high income earners in annual $1 million plus range, and by having a corporate minimum tax of 15% for large corporations, including on profits overseas, that previously did not pay this tax. A wealth tax on unrealized capital gains of billionaires or other wealth of the richest Americans is left for a future Congress to consider for financing the key parts of climate change provisions, education and health care that were left out. The education and healthcare provisions need to be expanded to restore America's historic mission of upward mobility for all. A provision for Medicare to comprehensively negotiate prices with pharmaceutical companies that would be taken for granted in any advanced country as in Europe, is also left for a future Congress that understands and responds to the dire needs of families and workers in America for affordable healthcare medicine neglected by administration after administration for the last three decades.   ...

LyrArc Article Gist
A mid-July 2011 CBS poll on where Tea party supporters stand on raising the debt ceiling and on a balanced deficit reduction approach combining tax increases and spending cuts. This poll shows 66% of Tea Party supporters saying Republicans in Congress should compromise on their positions to reach an agreement to raise the debt ceiling. Only 31% said they should stick to their positions even if this meant not reaching an agreement. On a balanced approach 53% said it should be the path taken including tax increases and spending cuts for a solution to deficits, and 45% said only spending cuts was the right way. This shows a more flexible Tea Party than is presented in the media reports and strident statements of politicians.

LyrArc Article Gist
Krugman questions the Paul Ryan U.S. budget proposal on several grounds. He says the Ryan proposal depends on projections by the Heritage Foundation for its assumption that the tax cuts would generate higher revenues by creating a booming economy. The Heritage Foundation projection is for revenue increasing by $600 billon over the next 10 years as a result of tax cuts. Krugman cites a different view from the Congressional Budget Office estimate for the Ryan proposal, which shows assumed savings from spending cuts will go not to reduce the deficit but to pay for tax cuts, with bigger deficits in the next decade. He says the spending cuts excluding Social Security, Medicare and Medicaid- but including defense- go down from 12% of GDP in 2011 to 6% of GDP in 2022- meaning that cuts in public services will need to cut to the bone. The Medicare part of Ryan's proposal does not say how spending on medical care will be reduced. The voucher or premium support Ryan envisages is estimated by the Congressional Budget Office to cover only one third of the cost of insurance premiums for Medicare equivalent care by 2030. Krugman cites the Center on Budget and Policy Priorities, which says the Ryan proposal achieves two thirds of its $4 trillion in spending cuts over the next decade by cutting programs that primarily serve low-income Americans. ...

LyrArc Article Gist
The Guardian sends its reporters along with UN special envoy on poverty Australian Prof. Alston as he spends two weeks in the world's richest country looking at poverty in urban areas.  They look at some of the 55,000 homeless people in Los Angeles, homelessness exacerbated by the tech boom in California that has sent housing costs skyrocketing. LA saw homeless people increase by 25% in 2017. The safety net is not being reinforced as the Trump administration cuts many social safety net programs. Next they visit the Tenderloin district in San Francisco where homeless people can be found at St Boniface Church sleeping in the pews. As the Guardian points out the cuts to social programs disproportionately hurt people of color who make up 39% of the homeless in the U.S. This report looks at the incongruity between the tax cuts that are likely to hurt poor whites who supported the Trump administration, as well as hurt the social protections that are part of today's democracies across the western world. This is most evident when one looks at the European Union. They were put in there in Europe for a reason- fairness is good for all classes, and most of all it protects democracies. Authoritarian regimes arise out of social dislocation from wars, or from lack of social protections and ineptitude of elites. Which is why a Lincoln or a Theodore Roosevelt from the Republican party supported fairness and social protections as much as FDR and Truman from the Democratic Party. The view expressed in this report in the Guardian is that the U.S. may have moved in the wrong direction under the Reagan and Clinton administrations creating the "me first" culture that prevails in the U.S. today. ...

LyrArc Article Gist
Former U.S. Treasury secretary Robert Rubin talks to Charlie Rose about the August 2 Debt Ceiling and Deficit legislation. He says there are two constructive things about the legislation. There are no serious cuts in 2011 and 2012, so there will be almost no loss in demand as spending cuts do not affect the immediate 18 month period. Former Treasury Secretary Summers also makes this point. And that the cuts include defense and non-defense. He favors the approach of the Bowles-Simpson Commission. On the overall situation Rubin points out the importance of getting a real public discussion going about what this means, what the consequences of decisions made now. Especially important for Rubin is public understanding of the importance of setting up a serious deficit reduction program that sets the date of implementation a couple of years into the future to give time to get back on track, and the need for increased revenues. A useful point Rubin makes is that the question of jobs and the question of getting into a sound position fiscally are really the same question. He cites his experience in 1993 when he helped President Clinton setup and implement a deficit reduction program- which had half spending cuts and half revenue increases. Bowles-Simpson Commission recommendations for closing loopholes for tax expenditures and Martin Feldstein's similiar proposal for limiting the deductions and exclusions to 2% of Adjusted Gross Income offer an option that creates revenues without any tax increases....

LyrArc Article Gist
The BBC's Soutik Biswas takes a look at prime minister Modi as he seeks a second term in India's general election in May 2019.  Modi's first term is marked by exceptional development schemes, efforts to provide health insurance to 500 million people who cannot afford health insurance, bringing cooking gas cylinders to hundreds of millions of Indian women especially in rural areas, efforts to jumpstart building of infrastructure projects such as airports and metro subways. A new law for GST brings together the country with one tax instead of a hodge podge of state taxes for interstate commerce, something India needed for a long time but different governments failed to implement. A failed effort to fight corruption by removing from circulation large denomination currency notes reduced economic growth briefly during the first term, though it may have accelerated the shift to formal economy needed in the long run to improve tax revenues for development needs. One of the problems for the Modi government is how do you put a value on something like Swach Bharat Mission, the achievement of the goal of defecation free India in 2019 by 100% on the 150th anniversary of the birth of Mahatma Gandhi, getting rural toilets up from 38% to 100%. Development had to start from the bottom up. Similarly in a country where middle men took up a lot of the transfer to poor families of government assistance- the delivery to hundreds of millions their own bank accounts.- how do you put a value on something like this, but it is essential for development from the ground up. More than missiles or other talk this has got to be the spirit of any development oriented administration in India. Ground up, big goals and rapid delivery and an apology for the difficulties that the people suffered earlier for lack of this infrastructure. For both China and India it is the same - moving quickly to make up for 100 years of colonial rule and stagnation. The Modi government has responded to rural farmer distress with support for guaranteed crop prices. As more young voters vote for the first time an important factor is how the new voters see the years ahead under either a government led by the BJP or by a patchwork of parties as the previous ruling Congress party depends on alliances with other parties with conflicting agendas or lack of rapid development agendas. The Modi government sees itself as setting the stage for the next phase of development that would change the economy through new infrastructure development and create jobs in construction and engineering, and other areas. The criticism is that not enough jobs were created in the first term. Yet bold infrastructure development targets such as transformed the Chinese economy could be the answer for job creation. The question then is who is better qualified to launch that effort based on its track record. The Congress party's main criticism is that it has to make alliances with parties that could stall development with conflicting agendas. The other is that in the the 2 years leading to the election of Mr. Modi the Congress led government of Manmohan Singh was stalled due to corruption charges, leading to a lack of decisionmaking at the highest levels, and stalled efforts for the rapid development that could deliver the kind of jobs India needs.  Young Indians would like to see growth first and foremost, only something rivalling China's transformation over 2 decades can do this. It should be kept in mind that China poured more concrete in the 21st century so far than all the concrete the United States poured in the 20th century, according to The Guardian report. The question then is who is best qualified and in a position to deliver this needed economic miracle.    ...

LyrArc Article Gist
The U.S. House of Representatives passes the McConnell-Biden deal on raising the debt ceiling by 269 to 161. For its passage through the House 174 Republicans and 95 Democrats voted in favor, 66 Republicans and 95 Democrats voted against it. Republicans voted for it with a proportion of 3 in favor and 1 against, compared to Democrats where it was 1:1 and as many opposed it as supported it. It took much persuasion from Vice President Biden and Speaker Boehner to get the votes in favor of passage. Republicans who opposed it were concerned about the modest cuts in spending. Democrats who opposed it considered it a giveaway to Republicans with no tax increases or addressing of tax expenditures. The deal's trigger provision to require cuts in spending to be 50-50 for defence and entitlements was used by Biden to show Democrats that the next $1.2 trillion in cuts would take a more balanced approach. Democrats would have leverage to make their case for savings through tax increases or tax expenditures....

LyrArc Article Gist
The Economist magazine says Mr. Trump's claim that he could fix things because he is an outsider is now quickly proving to be false. The lack of experience works against the Trump administration as it stumbles from one crisis to another. The tweets that were used to turn voter sentiment against opponents now work the other way. There are other problems that are noted here but not emphasized to the extent they need to be. Mr. Trump, as Peggy Noonan, a Reagan aide, has pointed out in the WSJ, risks alienating the very blue collar vote, and older voters whose interests he claimed to defend. This happened with the Ryan Republican House health care bill as millions of poor Americans approaching retirement were one of the worst affected groups. The Economist points out that the next project to tackle tax reform has the same possible consequences for the Trump blue collar base, as it says Republican plans for tax reform are seen as regressive. Tax reform has eluded previous administrations, and requires more experience in building coalitions which the Trump administration lacks in its confrontational attitude towards Congressmen on both sides of the aisle who disagree with him. Improving the U.S. trade position, infrastructure investment are other areas that the administration plans to tackle, yet the first 100 days show that the lack of experience and the lack of a calm composed mind is hurting the Trump administration, to the point of policies that hurt the very voters who put their faith in the Trump administration to improve things. A similar process is unfolding in Britain as it faces a Brexit negotiation that the Economist points out has been badly handled by prime minister Theresa May, and could lead to worsening the economy if no deal is reached because the European Union sees that it is not in its interest to do so, and Ms. May realizes only later that she has taken nationalist sentiment a bit too far for a European economic arrangement to work and provide mutual benefit. A continent wide economic arrangement that it was the wisdom of past leaders from Britain, France and Germany to support for over six decades is not easily undone by one vote, or one government. ...

LyrArc Article Gist
The failure of the Supercommitte in the U.S. Congress by the Thanksgiving deadline will not have any immediate consequences. This is because automatic spending cuts that are supposed to go into effect if the Supercommitte fails, do not go into effect till Jan 2013. This gives Congress another year in which to come up with necessary deficit savings. This is a major reason the two sides divided on major issues from the extension of Bush tax cuts and tax increases, and facing pressure from their party's interest groups and voter support groups, have no special incentive to reach a compromise. Such a compromise also means politicians taking the political risk of not being reelected. Another dynamic that is in play in November 2011 is that interest groups in the Republican and Democratic parties both now see the "sequester," as the automatic cuts are described, as a better alternative than any bipartisan agreement that cuts health and retirement programs. For anti-tax groups, the automatic cuts are better than a deal than includes tax increases. Sen. Rand Paul (R-Kentucky) says: "We promised tax cuts. And I think we need to have cuts." For liberal groups, the trigger or sequester for the 2013 automatic cuts is better than a deal that cuts health and retirement programs. The trigger for automatic cuts will cut agency budgets, but spending for the poor and the elderly -including food stamps, Medicaid, Medicare- is exempted. Eric Kinson, co-director of the Strengthen Social Security Campaign, says no deal is better than one that is flawed, the extra time gives the country time to pause and think about the alternatives....