As many of you know, I reprinted the Presidential Commission's plan to reduce the deficit because I thought it was a good beginning point. Now, dissident Commission member Rep. Jan Schakowsky (D-Ill.) has put forth her competing plan to cut the deficit. Her proposal makes clear why Democrats were shellacked in the recent med-term election [they just don't get it]. The Representative's proposes raising taxes at every term and her only true cuts are in the military budget.
The idea of raising the tax on capital gains and dividends shows me that she doesn't have an understanding of job creation and capital formation. Rep. Schakowsky’s lack of economic understanding is even more glaring in her proposal to use the "the public option” is a way to stem the rising cost of healthcare! With voters wanting more and more coverage mandates without a commensurate way to fund them, the healthcare system loses whatever remaining fiscal responsibility exists within the private marketplace. Oh sure, in the short run, Americans would switch from their existing private plan to the government plan because voters will dictate levels of coverage without a way to pay for them. What socialist politicians like Rep. Schakowsky and President Obama fail to consider is that, without the cost containment inherent in a private "for-proft" plan, competition to the public option will whither. This scenario leads to habitual tax increases to to meet the invariable healthcare system shortfalls, and the quality of the system will falter because the new bureaucracy will surely turn off our brightest kids from becoming doctors.
Take a look at the plan and tell me if this was created by someone who understands how a free market economy works.
The Schakowsky Plan could reduce the deficit by $427.75 billion by 2015, without burdening the middle class. This would surpass the projection of the President's target of $250 billion -- an amount that the Commission's plan would not even achieve.
Schakowsky's plan also calls for:
- Raising taxes on the highest incomes.
- Modifying Social Security without changing benefits paid out.
- A $200 billion two-year stimulus investment, creating jobs and providing economic growth.
- Cutting farm subsidies and the Pentagon budget by more than $100 billion (both of which are also being proposed by the Commission, though Schakowsky goes further by cutting unnecessary weapons systems, reducing troop levels and other measures).
- Imposing taxes on corporations that out-source jobs and saving $132 billion from limiting or closing tax breaks on corporations.
- Letting the Bush tax cuts for the wealthy expire.
- Treating capitol gains and dividends as regular income, which could generate another $150 billion.
- Removing the caps on payroll taxes for employers and lifting the threshold above $106,000 for employees, and imposing a 'legacy tax' above the cap.
- And, most impressively, Schakowsky proposes a Public Option for health insurance, which would lower healthcare costs and allow the government to negotiate drug prices with the PHARMA industry to lower costs, like it does for the V.A. Drug costs could become a fraction of the amount that seniors now pay. Tellingly, both Bowles and Simpson acknowledge a Public Option may be necessary if costs don't go down, so perhaps a P.O. could finally be on the way? There is certainly no indication health care costs will decrease in 2011.
