By MARSHA MERCER
Nearly every news story about the first boomers turning 65 contains sober warnings that boomers haven’t saved enough, and their golden years could be dross.
Not only will most boomers be unable to start a winery in retirement, as a TV ad suggests is our natural right, but also we may be forced to subsist on cat food in cold, dark rooms without Facebook. (Just kidding about the Facebook part. It’s not that bad.)
Still, according to the news, as about 10,000 baby boomers a day turn 65 a day in 2011, all boomers face the perplexing prospect of outliving their resources. There’s surely an element of schadenfreude, delight in the misfortunes of others, in these gloomy reports.
Instead of accentuating the negative, though, there’s a brighter way to look at the situation.
Today, one in four Americans are boomers. Older people vote, and boomers are a political force. The generation born between 1946 and 1964 isn’t a political monolith, given its size and diversity, but boomers do have clout. Politicians can’t continue indefinitely to ignore the problems facing Social Security and Medicare.
The likely fixes -- raising the early retirement age and higher taxes on benefits – may be unpalatable to the youngest workers, but it’s unlikely that politicians will slash benefits for those in or edging toward retirement.
Plus, here’s a surprising fact. Most boomers turning 65 are already collecting Social Security. About 42 percent of 62-year-olds opt for early retirement payments, even though it means, roughly, a 25 percent lower monthly check.
Interestingly, people end up receiving about the same amount in Social Security benefits whether they start collecting at 62 with reduced benefits, at 66 with full benefits or wait until they’re 70, when they collect higher payments, according to a study by the Center for Retirement Research at Boston College. That’s because even though early retirees receive less per month, they live long enough to collect as much as those who start receiving larger payments at 70, Alicia H. Munnell, Alex Golub-Sass and Nadia Karamcheva found.
And, signing up for Social Security doesn’t mean people are retired. More than one-fifth of those 62 to 69 who were receiving Social Security between 2000 and 2009 described themselves as in the labor force, Census surveys report.
So, fellow boomers, let’s make some New Year’s resolutions. Let’s stop whining. Stop boring ourselves and everyone else with horrendous what-ifs. Let’s stop talking about our age. It can’t hurt, and it might help improve our mood. Many surveys find that boomers are in a grand funk as we start 2011.
Where to start? Banish the odious phrase “senior moment” along with the “C.R.A.F.T.” moment – rendered politely as “can’t remember a freaking thing.” And never, ever refer to ourselves as SOFT – Saggy, Old, Forgetful, Tubby.
One of my closest friends e-mailed the other day: “I did manage to go flying on the ice last week, in embarrassingly old lady fashion, but no serious damage done. There is something to be said for extra padding, I guess.”
No, no, no. I love Diann, but this time she had it wrong. People of all ages slip on ice. We slipped on the ice in college without a thought about decrepitude. A tumble now doesn’t mean we’re old ladies. Of course not! How about: “I did manage to keep my aplomb after a flight on the ice last week. No damage was done, and I arose with a smile.” OK, that’s pushing it. To paraphrase Tina Turner, what’s padding got to do with it?
Most boomers don’t feel o-l-d. A 2009 Pew Research Center study found that nearly two-thirds of boomers feel younger than their actual age. A boomer typically feels 9 years younger than his or her driver’s license says.
We boomers simply have to rise above the way younger people think. When Pew asked when old age sets in, people 18 to 29 said at 60. These same young people said that someone who “frequently forgets familiar names” is old. Ha. Less than half of all adults over 30 agree.
And when do people 65-plus say old age starts? Age 74.
Boomers turning 65 in 2011 starts a major demographic shift for this country. By 2030 nearly one in five Americans will be 65 or older. It’ll be a senior boom.
© 2010 Marsha Mercer. All rights reserved.
Wednesday, December 29, 2010
Wednesday, December 22, 2010
Fed pay freeze may warm taxpayers -- Dec. 22, 2010 column
By MARSHA MERCER
Congress passed a two-year civilian federal pay freeze Tuesday, a step the White House says will save $5 billion by the end of 2012, $28 billion over the next five years and more than $60 billion over 10 years.
OK, but it’s not about the money.
Oh, sure, when President Barack Obama proposed the two-year freeze last month, he said shared sacrifice would be necessary to tame the raging federal deficit. Trouble is, the savings are drops in the $1.3 trillion deficit bucket.
What freezing federal pay does is begin to repair the public’s perception of Washington as clueless and out of touch. Next: Members of Congress should freeze their own pay for another year, as they have the last two.
As 2010 winds to a gloomy close, a spate of polls confirms what we already know. Americans are unhappy – with the country’s direction, with the economy, with Congress, with the president and with the government. Only 17 percent of us are satisfied with the way things are going, Gallup reported.
“For Public, Tough Year Ends on a Down Note,” the Pew Research Center for People & the Press announced.
We’re in the dumps about high unemployment and the sputtering economy. Neither is likely to turn around anytime soon. Only about one in three people see the economy improving in the next year, the latest NBC News/Wall Street Journal survey found.
It’s easy to assume bleak is the new black, our new normal.
But here’s another number: 83. That’s the percent that said a three-year pay freeze for federal employees and members of Congress is “totally” or “mostly acceptable,” according to the NBC-Journal poll.
Naturally, it’s easy to freeze someone else’s pay, and most people still don’t work for the government. The overwhelming support of a pay freeze is about the public’s sense that government workers can’t understand the pain private sector workers feel.
While most American workers have faced years of job insecurity, furloughs, layoffs, and pay and benefit cuts, they’ve continued to pay the salaries of federal employees who have been largely insulated from these anxieties.
The ranks of federal workers making $150,000 a year or more “has soared tenfold in the past five years and doubled since President Obama took office,” USA Today reported last month.
The newspaper’s analysis found that the average compensation of federal workers is twice that of private sector employees. Federal workers have gotten bigger pay raises and benefit increases than private sector employees for nine years in a row.
USA Today reported on Bureau of Economic Analysis data that found “federal civil servants earned average pay and benefits of $123,049 in 2009, while private workers made $61,051 in total compensation.”
When Obama proposed the two-year pay freeze last month, he said, “The hard truth is that getting this deficit under control is going to require some broad sacrifice. And that sacrifice must be shared by the employees of the federal government.”
The political truth is that Republicans were already talking about a pay freeze, and Obama’s bipartisan deficit-reduction commission called for a three-year pay freeze a few days later.
Federal workers’ unions argue that workers do feel economic pain and that a pay freeze for federal employees is patently unfair when Congress is cutting taxes for the wealthiest Americans. It’s true that the sacrifice is uneven, but it could be worse. Federal workers reportedly still will be eligible for bonuses and promotions.
Members of Congress, having read the handwriting on the wall, refrained from giving themselves pay raises in 2009 and 2010. Senators and representatives make $174,000 a year, with the leadership making more. It would be unseemly Congress to get raises while doctors and nurses in veterans’ hospitals, FBI agents and security officers do without.
The good news in all the gloom is that Americans remain stubbornly optimistic. More than half – 55 percent – of those Pew surveyed think 2011 will be better than 2010.
It’s largely symbolic, but a freeze in federal civilian and congressional pay is good symbolism. The pay freeze may save $60 billion in 10 years. If it warms taxpayers to their government, though, that would be priceless.
© 2010 Marsha Mercer. All rights reserved.
30
Congress passed a two-year civilian federal pay freeze Tuesday, a step the White House says will save $5 billion by the end of 2012, $28 billion over the next five years and more than $60 billion over 10 years.
OK, but it’s not about the money.
Oh, sure, when President Barack Obama proposed the two-year freeze last month, he said shared sacrifice would be necessary to tame the raging federal deficit. Trouble is, the savings are drops in the $1.3 trillion deficit bucket.
What freezing federal pay does is begin to repair the public’s perception of Washington as clueless and out of touch. Next: Members of Congress should freeze their own pay for another year, as they have the last two.
As 2010 winds to a gloomy close, a spate of polls confirms what we already know. Americans are unhappy – with the country’s direction, with the economy, with Congress, with the president and with the government. Only 17 percent of us are satisfied with the way things are going, Gallup reported.
“For Public, Tough Year Ends on a Down Note,” the Pew Research Center for People & the Press announced.
We’re in the dumps about high unemployment and the sputtering economy. Neither is likely to turn around anytime soon. Only about one in three people see the economy improving in the next year, the latest NBC News/Wall Street Journal survey found.
It’s easy to assume bleak is the new black, our new normal.
But here’s another number: 83. That’s the percent that said a three-year pay freeze for federal employees and members of Congress is “totally” or “mostly acceptable,” according to the NBC-Journal poll.
Naturally, it’s easy to freeze someone else’s pay, and most people still don’t work for the government. The overwhelming support of a pay freeze is about the public’s sense that government workers can’t understand the pain private sector workers feel.
While most American workers have faced years of job insecurity, furloughs, layoffs, and pay and benefit cuts, they’ve continued to pay the salaries of federal employees who have been largely insulated from these anxieties.
The ranks of federal workers making $150,000 a year or more “has soared tenfold in the past five years and doubled since President Obama took office,” USA Today reported last month.
The newspaper’s analysis found that the average compensation of federal workers is twice that of private sector employees. Federal workers have gotten bigger pay raises and benefit increases than private sector employees for nine years in a row.
USA Today reported on Bureau of Economic Analysis data that found “federal civil servants earned average pay and benefits of $123,049 in 2009, while private workers made $61,051 in total compensation.”
When Obama proposed the two-year pay freeze last month, he said, “The hard truth is that getting this deficit under control is going to require some broad sacrifice. And that sacrifice must be shared by the employees of the federal government.”
The political truth is that Republicans were already talking about a pay freeze, and Obama’s bipartisan deficit-reduction commission called for a three-year pay freeze a few days later.
Federal workers’ unions argue that workers do feel economic pain and that a pay freeze for federal employees is patently unfair when Congress is cutting taxes for the wealthiest Americans. It’s true that the sacrifice is uneven, but it could be worse. Federal workers reportedly still will be eligible for bonuses and promotions.
Members of Congress, having read the handwriting on the wall, refrained from giving themselves pay raises in 2009 and 2010. Senators and representatives make $174,000 a year, with the leadership making more. It would be unseemly Congress to get raises while doctors and nurses in veterans’ hospitals, FBI agents and security officers do without.
The good news in all the gloom is that Americans remain stubbornly optimistic. More than half – 55 percent – of those Pew surveyed think 2011 will be better than 2010.
It’s largely symbolic, but a freeze in federal civilian and congressional pay is good symbolism. The pay freeze may save $60 billion in 10 years. If it warms taxpayers to their government, though, that would be priceless.
© 2010 Marsha Mercer. All rights reserved.
30
Thursday, December 16, 2010
Tax cuts, `Catch-22' and what's enough -- Dec. 16, 2010 column
By MARSHA MERCER
Authors Kurt Vonnegut and Joseph Heller were at a party given by a billionaire on Shelter Island in New York. Vonnegut told his pal Heller that their host, a hedge fund manager, probably made more money in a single day than Heller had earned from his bestseller “Catch-22” in its entire history.
“Yes,” Heller responded, “but I have something he will never have…enough.”
Vonnegut wrote a poem about the conversation that appeared in The New Yorker in 2005. John C. Bogle, founder of the Vanguard mutual fund group, tells the Vonnegut-Heller story in his 2009 book, “Enough.” He was struck by what he calls “the simple eloquence” of the word enough.
“For a critical element of our society, including many of the wealthiest and most powerful among us, there seems to be no limit today on what enough entails,” Bogle writes.
I’ve been thinking about Bogle, Heller and what’s enough since Sen. Bernie Sanders of Vermont made his marathon speech last week on the Senate floor.
For nearly nine hours, Sanders, the Senate’s socialist elected as an independent, railed against extending the Bush-era tax breaks for the wealthiest Americans. To Sanders, the tax deal Obama and congressional Republican leaders agreed upon was both not enough -- and too much.
He argued that the concessions Republicans made, such as to extend unemployment benefits, were no more than they would have supported anyway. The tax cuts for the richest Americans, he insisted, were unconscionably large.
The president pragmatist said the two-year deal -- which contains the middle-class tax cut he wanted and other benefits -- was the best he could negotiate.
Sanders wasn’t having any compromise. He talked about growing income inequality, rising poverty levels – about 43 million Americans had income below the poverty line has year -- and escalating greed.
“What worries me so much about this growing concentration of wealth and income in this country is that when the rich get richer… they say: I am not rich enough. I need to be richer. What motivates some of these people is greed and greed and more greed,” he said.
Few politicians go after fat cats anymore; even Obama has pulled in his claws and purrs around business leaders. No one had stepped into the late Sen. Edward M. Kennedy’s role as a champion of society’s have-nots – until Sanders. Instead we have more politicians like Sen. Richard Burr, Republican of North Carolina, who suggest that extending jobless benefits is wrong because it discourages people from looking for work.
Sanders gave voice to the downtrodden, reading letters from ordinary Americans who are struggling to make ends meet. He criticized his Senate colleagues for listening more closely to lobbyists than to their own constituents. He was passionate, articulate and, in the end, unpersuasive.
Obama brought out the really big gun, former President Bill Clinton, to endorse the tax compromise. The Senate rejected Sanders’ attempt to raise taxes on high earners before it overwhelmingly approved the tax package, 81 to 19.
Sanders lost because pragmatism won.
Sanders said he was disappointed but gratified. More than 10,000 phone calls and 9,300 e-mails poured into his office, most supporting him.
While the tax deal does give cuts averaging $100,000 to people whose incomes are above a million dollars a year, it also contains help for the jobless as well as working people and the middle class. It extends unemployment benefits for 13 months, reduces for one year the employee portion of the Social Security payroll tax and continues tax credits that help pay for college.
Critics noted that the deal harms some workers because it provides less payroll tax relief than the recovery act did. The recovery package expires at the end of the year, and some working poor Americans reportedly will pay higher payroll taxes next year.
Other analysts who study how policies affect the poor said the tax deal offered more benefit than expected and likely was better than could be achieved otherwise.
For example, extending unemployment benefits will prevent 7 million jobless workers from losing income support, said Robert Greenstein, director of the Center on Budget and Policy Priorities. Greenstein, citing that provision and several others, endorsed the package.
Nobody said pragmatism was pretty, but it gets the job done. Sometimes, that’s enough.
© 2010 Marsha Mercer. All rights reserved.
30
Authors Kurt Vonnegut and Joseph Heller were at a party given by a billionaire on Shelter Island in New York. Vonnegut told his pal Heller that their host, a hedge fund manager, probably made more money in a single day than Heller had earned from his bestseller “Catch-22” in its entire history.
“Yes,” Heller responded, “but I have something he will never have…enough.”
Vonnegut wrote a poem about the conversation that appeared in The New Yorker in 2005. John C. Bogle, founder of the Vanguard mutual fund group, tells the Vonnegut-Heller story in his 2009 book, “Enough.” He was struck by what he calls “the simple eloquence” of the word enough.
“For a critical element of our society, including many of the wealthiest and most powerful among us, there seems to be no limit today on what enough entails,” Bogle writes.
I’ve been thinking about Bogle, Heller and what’s enough since Sen. Bernie Sanders of Vermont made his marathon speech last week on the Senate floor.
For nearly nine hours, Sanders, the Senate’s socialist elected as an independent, railed against extending the Bush-era tax breaks for the wealthiest Americans. To Sanders, the tax deal Obama and congressional Republican leaders agreed upon was both not enough -- and too much.
He argued that the concessions Republicans made, such as to extend unemployment benefits, were no more than they would have supported anyway. The tax cuts for the richest Americans, he insisted, were unconscionably large.
The president pragmatist said the two-year deal -- which contains the middle-class tax cut he wanted and other benefits -- was the best he could negotiate.
Sanders wasn’t having any compromise. He talked about growing income inequality, rising poverty levels – about 43 million Americans had income below the poverty line has year -- and escalating greed.
“What worries me so much about this growing concentration of wealth and income in this country is that when the rich get richer… they say: I am not rich enough. I need to be richer. What motivates some of these people is greed and greed and more greed,” he said.
Few politicians go after fat cats anymore; even Obama has pulled in his claws and purrs around business leaders. No one had stepped into the late Sen. Edward M. Kennedy’s role as a champion of society’s have-nots – until Sanders. Instead we have more politicians like Sen. Richard Burr, Republican of North Carolina, who suggest that extending jobless benefits is wrong because it discourages people from looking for work.
Sanders gave voice to the downtrodden, reading letters from ordinary Americans who are struggling to make ends meet. He criticized his Senate colleagues for listening more closely to lobbyists than to their own constituents. He was passionate, articulate and, in the end, unpersuasive.
Obama brought out the really big gun, former President Bill Clinton, to endorse the tax compromise. The Senate rejected Sanders’ attempt to raise taxes on high earners before it overwhelmingly approved the tax package, 81 to 19.
Sanders lost because pragmatism won.
Sanders said he was disappointed but gratified. More than 10,000 phone calls and 9,300 e-mails poured into his office, most supporting him.
While the tax deal does give cuts averaging $100,000 to people whose incomes are above a million dollars a year, it also contains help for the jobless as well as working people and the middle class. It extends unemployment benefits for 13 months, reduces for one year the employee portion of the Social Security payroll tax and continues tax credits that help pay for college.
Critics noted that the deal harms some workers because it provides less payroll tax relief than the recovery act did. The recovery package expires at the end of the year, and some working poor Americans reportedly will pay higher payroll taxes next year.
Other analysts who study how policies affect the poor said the tax deal offered more benefit than expected and likely was better than could be achieved otherwise.
For example, extending unemployment benefits will prevent 7 million jobless workers from losing income support, said Robert Greenstein, director of the Center on Budget and Policy Priorities. Greenstein, citing that provision and several others, endorsed the package.
Nobody said pragmatism was pretty, but it gets the job done. Sometimes, that’s enough.
© 2010 Marsha Mercer. All rights reserved.
30
Thursday, December 9, 2010
Education or Politics? -- Column of Dec. 9, 2010
By MARSHA MERCER
While Washington obsessed about the political drama unfolding over taxes, President Barack Obama flew to North Carolina to talk about something even more important than his future: ours.
“I came to Winston-Salem because I believe that right now there are bigger issues at stake for our country than politics,” the president said at a technical college. “At this moment, the most important contest we face is not between Democrats and Republicans. It’s between America and our economic competitors all around the world.”
Let’s see. Unemployment is nudging 10 percent, the economy is stalled -- and the president has to leave Washington to say that educating the young for a global economy is more important than partisan bickering. We do live in interesting times.
Obama’s tax cut compromise with Republicans and the resulting Democrats’ rebellion dominated the nation’s capital. Business leaders praised the president, and liberals likened him to George H.W. Bush, whose reversal on his “no new taxes” pledge cost him a second term.
No wonder Obama wanted to change the subject by talking about education and the world economy.
“In the race for the future, America is in danger of falling behind. That’s just the truth,” he said. “If you hear a politician say it’s not, they’re not paying attention.”
This president hasn’t used the bully pulpit much to galvanize support around national priorities. Republicans defined the tax cut debate, but an across-the-board cut, while popular, won’t make our students smarter or more competitive against those in Asia. Despite all the talk over the last few years about leaving no child behind, this country continues to lag much of the world in math and science.
More bad news about the global education race dropped this week. An international survey reported that teenagers in Shanghai have the world’s top scores in reading, math and science. The United States ranked only 14th in reading, 25th in math and 17th in science literacy, according to the Organization for Economic Cooperation and Development, which oversees the Program for International Student Assessment, known as PISA.
The PISA 2009 survey of how well students in dozens of countries are prepared for the future found that American 15-year-olds are just average. Students in South Korea, Finland and Canada, among others, scored higher than those in America.
Arne Duncan, the education secretary, said the report should be “a wake-up call” that many nations are out-educating us.
“The mediocre performance of America’s students is a problem we cannot afford to accept and yet cannot afford to ignore,” he said.
It’s not for lack of money. We’re falling behind even though we spend more per student than any other country on Earth – except Luxembourg, Duncan said.
Here’s another facet: American 15-year-olds may be only average in reading, math and science, but they are more confident of their academic skills than students in virtually any other country. Duncan called the finding stunning.
“Students here are being commended for work that would not be acceptable in high-performing education systems,” he said.
To be sure, dire reports about American education are nothing new. Politicians have been vowing to reform or transform the system at least since the elder George Bush campaigned for president in 1988, saying he wanted to be the “education president.”
Everyone pays lip service to the notion that the United States needs highly trained scientists and engineers, but our goals shift with the political winds. Recent policy has focused on raising the performance of low-achieving students, a laudable goal, but the brightest achievers deserve attention too. Can’t we help both?
Duncan suggests we can learn from countries that are doing education right. Education ministers from around the world will gather in New York in March for a summit. Some states are already forging ahead in pursuit of higher educational standards and improved teaching, he said.
Obama mentioned the PISA report at a news conference the day after he was in North Carolina.
“So what are we doing to revamp our schools to make sure our kids can compete? What are we doing in terms of research and development to make sure that innovation is still taking place here in the United States?” he asked.
The questions were rhetorical. Instead of talking policy, he segued into a discussion of his coming debate with Republicans over the fairness of the tax code. It was time again for party politics.
© 2010 Marsha Mercer. All rights reserved.
30
While Washington obsessed about the political drama unfolding over taxes, President Barack Obama flew to North Carolina to talk about something even more important than his future: ours.
“I came to Winston-Salem because I believe that right now there are bigger issues at stake for our country than politics,” the president said at a technical college. “At this moment, the most important contest we face is not between Democrats and Republicans. It’s between America and our economic competitors all around the world.”
Let’s see. Unemployment is nudging 10 percent, the economy is stalled -- and the president has to leave Washington to say that educating the young for a global economy is more important than partisan bickering. We do live in interesting times.
Obama’s tax cut compromise with Republicans and the resulting Democrats’ rebellion dominated the nation’s capital. Business leaders praised the president, and liberals likened him to George H.W. Bush, whose reversal on his “no new taxes” pledge cost him a second term.
No wonder Obama wanted to change the subject by talking about education and the world economy.
“In the race for the future, America is in danger of falling behind. That’s just the truth,” he said. “If you hear a politician say it’s not, they’re not paying attention.”
This president hasn’t used the bully pulpit much to galvanize support around national priorities. Republicans defined the tax cut debate, but an across-the-board cut, while popular, won’t make our students smarter or more competitive against those in Asia. Despite all the talk over the last few years about leaving no child behind, this country continues to lag much of the world in math and science.
More bad news about the global education race dropped this week. An international survey reported that teenagers in Shanghai have the world’s top scores in reading, math and science. The United States ranked only 14th in reading, 25th in math and 17th in science literacy, according to the Organization for Economic Cooperation and Development, which oversees the Program for International Student Assessment, known as PISA.
The PISA 2009 survey of how well students in dozens of countries are prepared for the future found that American 15-year-olds are just average. Students in South Korea, Finland and Canada, among others, scored higher than those in America.
Arne Duncan, the education secretary, said the report should be “a wake-up call” that many nations are out-educating us.
“The mediocre performance of America’s students is a problem we cannot afford to accept and yet cannot afford to ignore,” he said.
It’s not for lack of money. We’re falling behind even though we spend more per student than any other country on Earth – except Luxembourg, Duncan said.
Here’s another facet: American 15-year-olds may be only average in reading, math and science, but they are more confident of their academic skills than students in virtually any other country. Duncan called the finding stunning.
“Students here are being commended for work that would not be acceptable in high-performing education systems,” he said.
To be sure, dire reports about American education are nothing new. Politicians have been vowing to reform or transform the system at least since the elder George Bush campaigned for president in 1988, saying he wanted to be the “education president.”
Everyone pays lip service to the notion that the United States needs highly trained scientists and engineers, but our goals shift with the political winds. Recent policy has focused on raising the performance of low-achieving students, a laudable goal, but the brightest achievers deserve attention too. Can’t we help both?
Duncan suggests we can learn from countries that are doing education right. Education ministers from around the world will gather in New York in March for a summit. Some states are already forging ahead in pursuit of higher educational standards and improved teaching, he said.
Obama mentioned the PISA report at a news conference the day after he was in North Carolina.
“So what are we doing to revamp our schools to make sure our kids can compete? What are we doing in terms of research and development to make sure that innovation is still taking place here in the United States?” he asked.
The questions were rhetorical. Instead of talking policy, he segued into a discussion of his coming debate with Republicans over the fairness of the tax code. It was time again for party politics.
© 2010 Marsha Mercer. All rights reserved.
30
Monday, December 6, 2010
States challenge Medicaid expansion
Some 16 million additional Americans will receive Medicaid coverage under the new health reform law, but the expansion is being challenged in federal court in Florida. My story in the AARP Bulletin online looks at the issues. http://aarp.us/gLnW9V
Thursday, December 2, 2010
Killing earmarks won't slay deficit dragon -- Dec. 2, 2010 column
By MARSHA MERCER
Everybody agrees taming the deficit is going to hurt.
“The problem is real. The solution will be painful. There is no easy way out. Everything must be on the table. And Washington must lead.” So say members of the National Commission on Fiscal Responsibility and Reform in “The Moment of Truth” report.
Co-chairmen Erskine Bowles, a Democrat, and Alan Simpson, a Republican, took aim at dozens of sacred cows in the 60-page report. They called for curbing military spending, raising taxes by nearly $1 trillion by 2020, lifting the retirement age to 69 in 2075 and increasing the gas tax. Many called the plan dead on arrival.
Bowles, former Clinton White House chief of staff, and Simpson, former senator from Wyoming, know their solutions are politically unpalatable. They hope at least to start a serious national conversation.
A first step toward having an adult conversation, though, would be to stop the pretense that killing earmarks will save billions of dollars.
The myth is on page 27 of the commission’s report: “Eliminate all congressional earmarks,” for a savings of “at least $16 billion in 2015.”
Alas, killing earmarks won’t save a nickel.
Earmarks are the special spending projects lawmakers put in for their districts. Earmarks are highly unpopular, especially when other people get them, but they don’t add to spending. They just redirect it.
Commission member Sen. Dick Durbin, D-Ill., called out the earmarks’ proposal Wednesday at the commission hearing where the report was released. The measure “reflects a fundamental misunderstanding of how the appropriations process works,” he said.
“I’m sorry you included it,” Durbin told Bowles and Simpson.
Durbin, an appropriations subcommittee chairman, explained that earmarks – which amount to one-half to one percent of appropriations – exist within overall spending limits.
As the proposal’s presence in the report suggests, anti-earmark pressure around the country is intense. Tea party activists and others hate earmarks, which they believe speak to the arrogance of power. Earmarks were an issue in the midterm campaigns, and President Obama is an anti-earmark convert.
In one of their first actions after the election, congressional Republicans approved a two-year moratorium on earmarks. After that, Sen. Richard Lugar, R-Ind., declared the emperor wore no clothes. Lugar, who opposed the moratorium, said, “Eliminating earmarks does not reduce spending.”
In a statement, Lugar said, “At a moment in which over-spending by the federal government perpetuates annual deficits to over $1 trillion a year, the Congress is being asked to debate a congressional earmark spending resolution which will save no money, even while giving the impression that the Congress is attempting to meet the public demand to reduce spending.”
Congress holds the power of the purse under the Constitution, and Lugar argues that Congress, by giving up the ability to direct spending, is surrendering its constitutional authority to bureaucrats and the Obama administration.
PolitiFact.com, the fact-checking Web site, examined Lugar’s statement and said it was “mostly true.”
“Since earmarks are simply provisions of larger spending bills that direct where lawmakers want the money to go, earmarks, strictly speaking, do not increase the cost of a spending bill – they only tell where portions of that spending should go,” PolitiFact said.
Some analysts think earmarks encourage lawmakers to approve higher budgets so they can be assured of money for their pet projects, so eliminating earmarks could reduce pressure on spiraling budgets, PolitiFact said.
The “Moment of Truth” reports that for fiscal 2010, Congress approved 9,000 earmarks.
“Many of these earmarks are doled out by members of Congress for parochial concerns in their districts and to special interest groups.” The report cites three examples: $1.9 million for a Pleasure Beach Water Taxi Service in Connecticut, $900,000 for a program encouraging Oklahoma students to role-play how to make tough choices as members of Congress, and $238,000 for ancient-style sailing canoes in Hawaii.
These earmarks surely do sound like silly spending tricks, but worthiness is a different issue than cost-savings. Adults coping with real problems can take pain, but they need real solutions, not symbolic gestures.
As for the earmark moratorium, Alan Simpson himself is no fan. He told reporters last month that the ban was as inconsequential as a “sparrow belch.”
© 2010 Marsha Mercer. All rights reserved.
Everybody agrees taming the deficit is going to hurt.
“The problem is real. The solution will be painful. There is no easy way out. Everything must be on the table. And Washington must lead.” So say members of the National Commission on Fiscal Responsibility and Reform in “The Moment of Truth” report.
Co-chairmen Erskine Bowles, a Democrat, and Alan Simpson, a Republican, took aim at dozens of sacred cows in the 60-page report. They called for curbing military spending, raising taxes by nearly $1 trillion by 2020, lifting the retirement age to 69 in 2075 and increasing the gas tax. Many called the plan dead on arrival.
Bowles, former Clinton White House chief of staff, and Simpson, former senator from Wyoming, know their solutions are politically unpalatable. They hope at least to start a serious national conversation.
A first step toward having an adult conversation, though, would be to stop the pretense that killing earmarks will save billions of dollars.
The myth is on page 27 of the commission’s report: “Eliminate all congressional earmarks,” for a savings of “at least $16 billion in 2015.”
Alas, killing earmarks won’t save a nickel.
Earmarks are the special spending projects lawmakers put in for their districts. Earmarks are highly unpopular, especially when other people get them, but they don’t add to spending. They just redirect it.
Commission member Sen. Dick Durbin, D-Ill., called out the earmarks’ proposal Wednesday at the commission hearing where the report was released. The measure “reflects a fundamental misunderstanding of how the appropriations process works,” he said.
“I’m sorry you included it,” Durbin told Bowles and Simpson.
Durbin, an appropriations subcommittee chairman, explained that earmarks – which amount to one-half to one percent of appropriations – exist within overall spending limits.
As the proposal’s presence in the report suggests, anti-earmark pressure around the country is intense. Tea party activists and others hate earmarks, which they believe speak to the arrogance of power. Earmarks were an issue in the midterm campaigns, and President Obama is an anti-earmark convert.
In one of their first actions after the election, congressional Republicans approved a two-year moratorium on earmarks. After that, Sen. Richard Lugar, R-Ind., declared the emperor wore no clothes. Lugar, who opposed the moratorium, said, “Eliminating earmarks does not reduce spending.”
In a statement, Lugar said, “At a moment in which over-spending by the federal government perpetuates annual deficits to over $1 trillion a year, the Congress is being asked to debate a congressional earmark spending resolution which will save no money, even while giving the impression that the Congress is attempting to meet the public demand to reduce spending.”
Congress holds the power of the purse under the Constitution, and Lugar argues that Congress, by giving up the ability to direct spending, is surrendering its constitutional authority to bureaucrats and the Obama administration.
PolitiFact.com, the fact-checking Web site, examined Lugar’s statement and said it was “mostly true.”
“Since earmarks are simply provisions of larger spending bills that direct where lawmakers want the money to go, earmarks, strictly speaking, do not increase the cost of a spending bill – they only tell where portions of that spending should go,” PolitiFact said.
Some analysts think earmarks encourage lawmakers to approve higher budgets so they can be assured of money for their pet projects, so eliminating earmarks could reduce pressure on spiraling budgets, PolitiFact said.
The “Moment of Truth” reports that for fiscal 2010, Congress approved 9,000 earmarks.
“Many of these earmarks are doled out by members of Congress for parochial concerns in their districts and to special interest groups.” The report cites three examples: $1.9 million for a Pleasure Beach Water Taxi Service in Connecticut, $900,000 for a program encouraging Oklahoma students to role-play how to make tough choices as members of Congress, and $238,000 for ancient-style sailing canoes in Hawaii.
These earmarks surely do sound like silly spending tricks, but worthiness is a different issue than cost-savings. Adults coping with real problems can take pain, but they need real solutions, not symbolic gestures.
As for the earmark moratorium, Alan Simpson himself is no fan. He told reporters last month that the ban was as inconsequential as a “sparrow belch.”
© 2010 Marsha Mercer. All rights reserved.
Wednesday, December 1, 2010
Medicaid Expansion Looms in Virginia
Medicaid is a lifeline for many Americans. Read how its expansion under the health reform law will affect Virginia in my story in the AARP Bulletin. http://aarp.us/fqEmST
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