Right Wing Bloggers Ought To Fear GOP Budget, Tax "Reform" More Than Frederica Wilson

The approval last Thursday of the GOP budget by a 51-49 Senate vote using "budget reconciliation" ought to send shivers down the spine of every citizen. That also includes raucous Righties and inveterate Trumpies who've been castigating Frederica Wilson because she's a powerful black woman who dares to wear a cowboy hat -  something most white crackers can't handle.  Of course we know from psychology such over the top hate-filled rants (including use of epithets like "black ape") shows profound fear,  A fear Citizen John Kelly (he's no longer a general), after all, displayed last Thursday.

  Kelly-  who had to run interference for Dotard last week-  actually lied about a speech congresswoman Wilson gave honoring slain FBI agents in Miami in 2015. The whole video of the speech was released by the Sun-Sentinel revealing there was no element of the self-glorification that Kelly had claimed. No "empty barrel" - just a serious black woman who gave all those gathered their just due. It confirmed once and for all Kelly is a damned liar and tool.

But Kelly's lie followed Dotard's earlier lie about Ms. Wilson "fabricating" the content of a phone call he made to Myesha Johnson, LaDavid Johnson's widow.  Yesterday, Myesha Johnson confirmed that Dotard is the liar and Wilson was "absolutely correct" because she was in the same car when the speaker phone sounded. Dotard followed up his earlier lies with more yesterday including he had a "respectful conversation" with Myesha Johnson. No, he didn't.  He made her "cry even worse" in her own words, because he didn't even know the name of this slain soldier. Yet the deranged Righties are determined to give Dotard all kinds of breaks and excuses.

The Trumpkins who blog on how they love Dotard so much have also castigated Frederica for "being anti-military". For example, not voting for the $2b bill that would have extended benefits to families of the fallen, failing to note that the bill was killed mainly by Tea Baggers (i.e. in the GOP) who wanted to use a rider to defund Obamacare. (Also not processing that the budget sequester was still in effect). But this sort of shtick is par for the Right's course when they target a person of color, especially one who is outspoken and not prepared to take lies from Donald Dotard or his sock puppet Kelly.( At least most of the rightist bloggers, while biased against Wilson,  have been decent enough not to use the "black ape" epithet this time.)

The point I am making here is that while the Dotard lovers are getting off now piling onto Frederica  Wilson and blaming the "left" for using a tragedy (the killing of 4 soldiers in Niger) to foment a "crisis" - it is really the rightists who have no shame.   They certainly ought to have bridled against Trump's and Kelly's clumsy defense of the words "he knew what he signed up for" to a grieving widow. As another Gold Star father  (Khizr Khan) told CBS a.m. hosts yesterday morning, Trump only had to read decent and respectful words from a note to Mrs. Johnson, and not  "wing it". As Mr. Khan also noted, when asked if Trump or Kelly could be given the benefit of the doubt and "no one can perfectly say the words needed",  they needn't be perfect only respectful.  And if the widow herself didn't feel they were then they weren't.

The next best thing was to apologize but Dotard didn't even have the grace to do that, and up to now Kelly hasn't even offered a correction to his rash, untrue comments.   Khizr Khan put it best last night in an MSNBC interview, that perhaps Kelly hasn't yet found the courage.

But here's the choice part: these Trumpkins who are savaging Wilson for  past plans to "cut VA benefits"  will now have to face real, serious jeopardy if and when this latest GOP budget plan materializes. And according to the WSJ yesterday, it may well do so before Thanksgiving.  If it does, these Frederica critics will really have something to grouse about when their VA benefits - especially medical - are transferred to private sources.  The only thing right now standing in the way of full passage are a handful of Tea Party radicals and deficit hawks who may want to block any budget or tax reform that they believe adds to the deficit.

Let's go over the Budget proposal as it stands now and which we know.  The plan is also to cut $1 trillion from Medicaid and $473 billion from Medicare over ten years.   This is also the timeline over which the VA modifications (to a private system)  are expected to be implemented. (The propaganda attached to the latter is that vets will be afforded more choice going to private health providers, in return for which they will have to sacrifice a bit more money.)

In terms of the Medicare cuts, let's process that recent studies indicate a 65-year old couple will need an average of  $260,000 just to cover out of pocket health care costs. This is a staggering number for retirees struggling to get by - especially the 20 percent who have no income beyond Social Security. (Which the GOP also has in its cutting sights, via the elimination or reduction of the COLA).

As for Medicaid, many Americans forget that this is not only the health care system for lower income citizens but also middle income seniors who  suffer medical calamities. That is, medical crises that require 24/7 nursing home or long terms care - sometimes at $100,000 a year.  That cost is usually not covered by insurance policies or Medicare (which only pays for 10-15 days before seniors need to pay out of pocket.)

The way it works currently, is that for a medically compromised senior - say with  late stage Alzheimer's - to access Medicaid, they must spend their assets down.  If they have assets worth $400,000 they must continue to spend it all down until they have less than $5,000 left - which is the threshold Medicaid finally kicks in.

The GOP explains the justification for the preceding safety net cuts to as a need to offset the $1.5 trillion in deficits that will be caused by the planned tax cuts - mainly to the corporations and wealthy. They  argue these cuts will generate such enormous economic growth they will pay for themselves. Of course this is codswallop.  My question would be: If the tax cuts pay for themselves, why would you need to cut Medicare and Medicaid to the tune of nearly as much $$$?

To be fair, let's be  clear that the federal budget outlines how the government plans to spend money during the new fiscal year. We need money in order to spend money - that's where tax revenue comes into play. Republicans in Congress are hoping to use the budget passed as a basis to next pass tax cuts worth nearly $1.5 trillion. Those tax cuts are a big deal as midterm elections approach because most taxpayers are in favor of some form of cuts. Also, Trump and the GOP have promised the clueless GOP base they will get them, and if it doesn't come to pass....well, things might get dicey. Even the Dems taking over the House next year. Who knows?

The corollary to this is while most taxpayers want the benefit of tax cuts they do not wish to have their own oxen gored when the time comes for spending cuts to offset the tax cuts. Pushing  tax cuts through without corresponding cuts in spending will increase the deficit and that's not good politics for a party which prides itself on fiscal responsibility.  So much for the bunk that they will "pay for themselves".

If Americans were smarter, more savvy, the tax cut fever and fetish would never be the huge obsession it is for the likes of the Goopers.

By contrast, most intelligent Europeans  know they can never make enough money on their own to have medical or social insurance needs  met so they agree from the get go to allow higher taxes to pay for them. Americans (too many) are too dumb to see that and always believe they can make it on their own - until they can't' - like when they end up with a horrific cancer or get into a tragic auto accident that leaves them paraluzed.

The following are what The Center on Budget and Policy Priorities identifies as getting the worst budget hits:

To offset the cost of a $1.5 trillion tax cut, Medicare payments to doctors, hospitals, and insurance plans would be automatically cut 4 percent for each of the next ten years, on top of the 2-percent cuts that those payments are already experiencing under the sequestration triggered by the 2011 Budget Control Act.  

In addition, the automatic cuts would bring the complete elimination of more than 150 mandatory payments for farmers, health insurance, the military retirement trust fund, housing, social services, victims of crime, child nutrition, and many others, all lasting a decade.

This whole exercise essentially resurrects the supply side bunkum which has failed miserably ever since it was first introduced  by Reagan sycophant Arthur Laffer on the back of a napkin. The "Laffer curve" (see diagram below) :


was rendered by one Arthur Laffer in 1974. Laffer was then an economist at the University of Chicago and traveled to Washington, D.C. to meet with Donald Rumsfeld, Gerald Ford's then chief of staff.

Laffer had a new theory on why tax rates were inefficient when too high, or one might say "inefficiently high". One interested nabob from the WSJ asked Rumsfeld to meet with Laffer on the issue. As it happened, Rumsfeld had other commitments so dispatched Dick Cheney instead to a bar, where the meeting took place. (See, e.g. Economics for the Rest of Us by Moshe Adler, Ch. 6)

There in front of Cheney Laffer proceeded to sketch his infamous diagram on a napkin on why the rich could be said to be "over taxed".  As drawn, it was totally convincing! Especially for a guy like Cheney with minimal math skills. Note the line defining the highest marginal tax rate of 70% for Gerald Ford's presidency. What Laffer's curve sought to show is that by cutting that rate down, say to 50%, one could increase the revenues by nearly 35%! Of course, the 50% turned out to be wholly arbitrary and in fact after Reagan became President in 1980 the rates were cut down to 50 percent by 1981, then to 28% (by 1988). After all, if one could increase revenues by cutting taxes 20%, imagine what one could do by cutting them more than 40%!

Thus was born "voodoo economic" or supply side theory as it has come to be known. (Now it's mre rightly called "trickle down" because the crumbs from the richest are forecast to fall on our respective tables to enrich us too. Well up to a point!)

In their examination of supply side tax cuts,  authors James Medoff and Andrew Harless in The Indebted Society, 1995, found, p. 23:

"For the health of the economy, Reagan's policies turned out to be just about the worst thing that could have happened: investment did not increase, growth continued to stagnate, and the federal deficit ballooned to new dimensions....In 1981, the year Reagan took office, the public debt was 26.5 % of the gross domestic product (GDP)....In 1993, the year that Bush left office, the public debt was a staggering 51.9 percent of the GDP."

The current GOP budget proposal  on the whole, would cause most Americans' incomes to fall more than they would gain from the tax cuts themselves. That’s because the planned tax cuts are so concentrated on the rich, and the cuts involved would take so much away from low- and middle-income families.

Is there any chance at all of the proposed tax cuts doing what they claim? None!

A Financial Times analysis of the Bush tax cuts (9/15/10, p. 24) passed in 2001 and 2003, found:

The 2000s- that is the period immediately following the Bush tax cuts – were the weakest decade in U.S. postwar history for real, non-residential capital investment. Not only were the 2000s by far the weakest period but the tax cuts did not even curtail the secular slowdown in the growth of business structures. Rather the slowdown accelerated to a full decline

For reference, the top marginal tax rate during the Bush years (for income tax) was reduced to 36% from the 39.5% during the 1990s Clinton Years. Over the 1950s and into the 1960s (until about 1964) the top marginal rate was at 91%, going down to 65% by the mid -60s. The lower level of 50% wasn’t hit until Reagan arrived in 1980, and passed his tax cuts. And we've been piling up deficits ever since.

The FT analysis also observed that “during each decade from the 1950s to the 1990s, growth in real gross non-residential investment averaged between 3.5 percent and 7.4 percent a decade. During the 2000s it averaged a mere 1%”

This is evidence enough that again, tax cuts to spur economic growth don't work. That is the  myth once called "Voodoo economics" by George Bush Sr. and which Trump and the Goopers are attempting to spring on us again.

The intended VA cuts have been known at least since last July.  While the VA backed off somewhat according to The Military Times the GOP remains dedicated to eliminating the Individual Unemployability benefit payments to retirement-age veterans, a move expected to save $3.2 billion next year alone and $41 billion over the next decade.  The GOP budgeteers are also determined to privatize the VA, and are entertaining doing it in stealth mode - like they tried with the skinny repeal of Obamacare - which didn't work out so well, but you never know. They are determined to get those spending cut offsets to the $1.5 trillion in tax cuts to the rich.

There is even more pressure now on the VA cuts after Trump scotched the GOP plan to limit pretax 401k contributions to $2,400 a year - down from $18,000. This would have offset nearly $115 b which will now have to be found from another source. Short of Social Security, the VA is the only other likely one. (And also fewer will be screaming bloody murder relative to the many millions more who collect S.S.)

If any Reich wing vets have any sense out there, they will take their gnarly, jaundiced sights off Frederica Wilson and put them squarely on the rate at which this GOP budget bill moves to the House for "reconciliation" and then is used to launch the new "tax reform". Their own welfare might depend on it, as opposed to scaring up phony phobias about Ms. Wilson.