Wednesday, July 20, 2011
We are still at it when it comes to our deficit and impending debt ceiling limit … yesterday the Gang of Six came out with their solution to the debt ceiling crisis. Now you may be asking yourself: Who exactly is the Gang of Six? It is a group of three Democrats and three Republicans who have been working to come up with a solution for our national debt. They have been working for a long while (since December of last year), but their plan has recently resurfaced as a potential solution. The members of this Gang are Democrats Mark Warner, Dick Durbin and Kent Conrad and Republicans Saxby Chambliss, Mike Crapo and Tom Coburn.
The Six Pak plan was not designed to be address the question of raising the debt ceiling. These guys have been working on this for some time as a way to address the $14 trillion in debt our children will be facing as they grow to adulthood. So why did the plan come out on the same day the House was considering the Cut, Cap and Balance idea? Some say it was to upstage the Republican held House … others say that the Six Pak plan needed to be part of the debate at this stage. You decide.
The plan would include $3.7 trillion in deficit reduction over ten years.
Daniel Mitchell of the Cato Institute has a solid analysis of the good, the bad and the ugly in the plan. Among the good are that the top income and corporate tax rates would be limited to 29% and it would do away with the Alternative Minimum Tax. Some of the bad? There is a net tax increase of $1.2 trillion, though they claim that a $1.5 trillion tax cut that would be achieved through “broad tax reforms.” Most importantly, the plan would still grow the size of government over the long-run. And while the plan suggests reforms in Social Security, what exactly are those reforms and when will we know what those will look like?
“Broad tax reforms”? Just what does that mean? This means that some current deductions from corporate and individual tax returns would be eliminated. My guess is that you would probably see the home mortgage interest deduction disappear for second or vacation homes. Obama is also probably going to see his demonizing of evil corporations who buy business jets disappear – so not good news for Savannah or Wichita.
Dear Ruler has thrown his tentative support behind this Gang of Six solution. Now that’s enough to make you suspicious right there …..