Government Shut Down?

[Ixiah]

well I guess you don't get to get over on the tax payers (any more than usual).

Guess not. Its nice to see that something was worked out between Obama and congress.

[SubGod22]

Ahead of Key Vote, Estimate Shows Budget Bill Saves Less Than Advertised

The $38 billion in budget cuts touted by Republicans over the weekend might end up being less. A lot less.

According to a Congressional Budget Office estimate, the hard-fought budget deal funding the government for the rest of the year saves only $352 million from non-war accounts this year. The new figure has rankled conservative lawmakers who thought they had extracted a fair amount of concessions out of the other side of the aisle. It wasn't the $61 billion in cuts they had originally sought, but House Speaker John Boehner and his deputies insisted $38 billion in cuts was the best deal they could get, with the White House and Senate Majority Leader Harry Reid on the other side of the negotiating table.

But the CBO analysis showed the savings mostly won't materialize this year, potentially spelling trouble for the deal as it approaches a floor vote Thursday, though Boehner insists it'll pass.

About $8 billion in immediate cuts to domestic programs and foreign aid are offset by nearly equal increases in defense spending. When war funding is factored in the legislation would actually increase total federal outlays by $3.3 billion relative to current levels.

To a fair degree, the lack of immediate budget-cutting punch is because the budget year is more than half over and that cuts in new spending authority typically are slow to register on deficit tallies. And Republicans promise that when fully implemented and repeated year after year, the cuts in the measure would reduce the deficit by $315 billion over the coming decade.

I believe the vote happens at some point today and it was a little iffy before. With these new numbers, I wonder how many House Republicans will now vote no that were maybe planning on yes. I'm not sure how this will effect some of the Dems who were pissed about certain cuts, but I'm guessing they're still voting no as well as those cuts still exist. If it passes the House, it still sounds like the Senate is no guarantee. I also believe that the temporary spending bill expires this afternoon, which means a shutdown is still possible if this fails to pass today.

[RoyalShock]

From what little I've read or seen on this, a number of conservatives are now thinking they will vote against that budget. Tim Huelskamp (KS-1) is one of them.

[SubGod22]

House Passes Budget for 2011, Bill Heads to Senate

The final vote was 260-167, with 59 Republicans opposing the package -- one House Speaker John Boehner had touted as the best deal he could get out of spending cut-averse Democrats. The bill now heads to the Senate side where it is expected to pass. Final passage would end, for the time being, the recurring concerns about a government shutdown which have loomed over Washington as it limped from one stopgap budget to another for the better part of the year.

[RoyalShock]

All I can say is that next year that budget better cut deep. And deep enough to affect entitlements.

[SubGod22]

All I can say is that next year that budget better cut deep. And deep enough to affect entitlements.

:good:

[SubGod22]

Sounds like it's just waiting on a signature from Obama. 2012 Budget is now up for debate...

House to Vote on GOP 2012 Budget

With a fundamental restructuring of Medicare and Medicaid, the plan has been blasted by Democrats, including President Obama, as an attempt to leave seniors and poor holding the bag on health care costs.

But Ryan, R-Wis., says the effort is an attempt to "preempt austerity" that will come by following the current budget route, which on its current trajectory adds $6.7 trillion to the deficit over the next 10 years.

"What we're trying to do here is keep the social compact," Ryan told an audience in Washington on Thursday. "A limited government, free enterprise system, a government that lives within its means, a government (that) keeps its promises to the most vulnerable in our society, to the seniors in our society, but a government that continues the idea of America, the characteristics of America, equal opportunity, upward mobility, prosperity."

According to Ryan's plan, Medicare payments would no longer be paid by government sending out checks for medical bills, but would let people under age 55 choose among private insurance plans that the government would then supplement. People 55 and over would remain in the current system, but younger workers would receive subsidies that would steadily lose value over time. Ryan says those who can pay more will have to do so while lower income Americans will still be covered.

[ShockBand]

Ryan says those who can pay more will have to do so while lower income Americans will still be covered.

While I totally agree we need changes, I would be curious to learn more about the mechanics of how this will be done with Medicare. Is there anything on this yet, or is this one of many details yet to come? Any info out there guys?

[SubGod22]

Ryan says those who can pay more will have to do so while lower income Americans will still be covered.

While I totally agree we need changes, I would be curious to learn more about the mechanics of how this will be done with Medicare. Is there anything on this yet, or is this one of many details yet to come? Any info out there guys?

I'll have to see if I can find more specifics. Maybe some time this weekend if I find the time to sit down and dig into it.

As expected: House Approves GOP 2012 Budget on Party-Line Vote

WASHINGTON -- On a party-line vote, the House of Representatives passed a Republican 2012 budget proposal which aims to start the country down the path of deficit reduction, but which Democrats warn will gut a vital safety net for seniors.

The House voted 235-193 to approve the plan by Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, though its future beyond that is uncertain. Still, Republicans say the country is on the precipice and they have no other choice but to start slashing trillions in future spending.

"The greatest danger that America faces today is doing nothing," House Speaker John Boehner said Friday before a vote on the RSC plan and a Democratic alternative.

The Ryan plan "is the strongest step we could take today, and we are going to take it," Boehner said.

Ryan's budget aims to cut $6.2 trillion in spending over 10 years, and reduce the deficit by more than $4 trillion. With $14 trillion in debt already on the books, government spending on the course it stands now aims to add another $6.7 trillion in debt over 10 years.

[SubGod22]

This is what a quick search got me:

Medicare

A Medicare Program for the 21st Century. As the long-term fiscal burden of Medicare becomes more unsustainable, it is clear that – to fulfill the mission of Medicare – small and gradual changes to the program will not suffice. The entire methodology of the program must be converted away from a program that shelters providers and consumers from prices – and is therefore inefficient in restraining rising costs – into one in which beneficiaries choose the most affordable coverage that best suits their needs.

Just as the Medicare Program requires a new methodology, so too does its structure of financing. In this proposal, the Part A and Part B trust funds are combined to create one unified trust fund. The new Medicare Program and the existing program continue to be financed by trust fund revenues, Medicare payroll taxes, and general revenue contributions. The measure of solvency is converted away from one based on the unfunded liability of the Part A trust fund and into one in which the program’s solvency is measured as a percentage of gross domestic product [GDP].

Medicare Payment. For future Medicare beneficiaries who are now under 55 or younger (those who first become eligible on or after 1 January 2021), the proposal creates a standard Medicare payment to be used for the purchase of private health coverage. Currently enrolled Medicare beneficiaries and those becoming eligible in the next 10 years (i.e. turning 65 by 1 January 2021) will see no changes in the current structure of their Medicare benefits. The payment will be made directly to the health plan designated by the beneficiary (similar to the administration of the refundable health care tax credit), with the beneficiary receiving any leftover amount as a payment from the health plan, or assuming financial responsibility for any difference in the payment and the total cost of the premium. This allows the Medicare beneficiary to invest the leftover amount in a Medical Savings Account [MSA] to pay for other medical expenses, or to purchase long-term care insurance.

Each Medicare beneficiary becomes eligible for the payment by enrolling in a health insurance plan. Medicare will publish an annual list of plans that are “Medicare certified.” Medicare enrollees are able to use their payment to pay for one of the Medicare certified plans, or any other plan, such as those offered by former employers or available from the private market.

When fully phased in, the average payment is $11,000 per year (the average amount Medicare currently spends per beneficiary), and is indexed for inflation by a blended rate of the CPI and the medical care component of the CPI. For affected beneficiaries, the payment replaces all components of the current Medicare Program (Medicare fee-for-service, Medicare Part B, Medicare Advantage, and Medicare Part D). Payment amounts are income-related and risk-adjusted. They also are partially geographically adjusted, with the geographic adjustment phasing out over time.

Risk Adjustment. When the plan is fully implemented, Medicare beneficiaries will receive on average the standard $11,000, with the flexibility to receive a positive adjustment of that amount based on a risk-assessment from their chosen health plan. Once enrolled, beneficiaries may complete initial health exams through their insurance plans to determine whether they are eligible to receive a higher risk-adjusted payments. Each health plan must submit to the Medicare program any necessary results of the exam for Medicare to determine an adjusted risk-assessment.

Under the current system, Medicare frequently overpays for some services and beneficiaries and underpays for others. By risk-adjusting beneficiaries’ payments based on their health condition, this reform targets support to those who truly need additional help.

Income-Relating. The payment amount is modified based on income, in a manner similar to that for current Medicare Part B premium subsidies. Specifically: beneficiaries with incomes below $80,000 ($160,000 for couples) receive full standard payment amounts; beneficiaries with annual incomes between $80,000 and $200,000 ($160,000 to $400,000 for couples) receive 50 percent of the standard; and beneficiaries with incomes above $200,000 ($400,000 for couples) receive 30 percent.

Enhanced Support for Low-Income Beneficiaries. While any Medicare beneficiary, regardless of income level, is able to set up a tax-free MSA if he or she desires, the new Medicare Program establishes and funds an MSA for low-income beneficiaries. Specifically, for those who are fully “dual eligible” (eligible under current policies for both Medicare and Medicaid), and beneficiaries with incomes below 100 percent of the poverty level, the plan provides an MSA payment equal to the amount of the deductible for the average Medicare high-deductible health plan. Those with incomes between 100 percent and 150 percent of poverty receive 75 percent of the full deposit.

Retention of Medicare for Those 55 and Older. Clearly, the transition to this restructured Medicare Program should protect those at or near retirement – people who have long planned on the existing Medicare Program for their retired years. That is why the transition to the individual purchase of private health insurance applies to those eligible starting on 1 January 2021. For those eligible prior to that date (those 55 and older), the existing Medicare Program remains, and is strengthened with changes, such as income-relating of drug benefit premiums, to ensure its long-term sustainability.

Premiums continue to be based on an all-beneficiary average, so the phasing of the younger population into the new program will not increase premiums for the population continuing in the existing program. The proposal also retains the Medicare payroll tax of 2.9 percent of the Federal Insurance Contributions Act [FICA] and Self-Employed Contributions Act [SECA] payroll tax, as is the case now.

For individuals now younger than 55 only, the proposal adapts Medicare’s eligibility age to reflect Americans’ improving lifespans, raising in gradually, and in modest steps, from the current 65 to 69 years and 6 months.

Fail-Safe Mechanism. The proposal would establish a mechanism that would be activated in the Medicare trustees determined that the percentage of funding from general revenues exceeded 45 percent in the prior fiscal year. If activated, on 1 July or 2 months after the Medicare trustees’ report is released, whichever comes later, the mechanism would apply an automatic 1-percent reduction in payments for services provided in Medicare’s fee-for-service sector.

The plan was developed in consultation with the Congressional Budget Office [CBO] Office of the Chief Actuary of the Centers for Medicaid and Medicare Services, and would assure the solvency of the overall Medicare Program for the long term.

There's more on other areas of the budget here. A lot of reading if you're interested.

[ShockBand]

Thanks, Sub. I'll try and read it some this weekend as well.

[SubGod22]

Here's a take from Cato on Obama's proposed budget for 2012... Obama's Soak-the-Rich Tax Hikes Won't Work

Even if the president could persuade Congress to enact all of his proposed tax increases, in addition to surtaxes already included in ObamaCare, the CBO finds we would still face endless budget deficits averaging 4.8% of GDP.

"Federal debt held by the public would double under the President's budget," says the CBO, "growing from $10.4 trillion (69% of GDP) at the end of 2011 to $20.8 trillion (87% of GDP) at the end of 2021, adding $9.5 trillion to the nation's debt from 2012 to 2021."

And yet, enormous as they are, these deficit and debt estimates assume that the higher tax rates called for under the president's 2012 budget plan do no harm to the economy, that interest rates stay unusually low, and that the economy avoids recession for a dozen years. Those assumptions require taxpayers to behave much differently than they ever have before.

The revenue estimates are even more unbelievable. According to the Office of Management and Budget, total revenues would supposedly exceed 19% of GDP after 2015, rising to 20% by 2021 — a level briefly reached only at the height of World War II (1944-45) and the pinnacle of the tech-stock boom (2000). Moreover, these unprecedented revenues would supposedly come from the individual income tax, which is even less plausible.

It is not as though we have never tried high tax rates before. From 1951 to 1963, the lowest tax rate was 20% to 22% and the highest was 91% to 92%. The top capital gains tax rate approached 40% in 1976-77. Aside from cyclical swings, however, the ratio of individual income tax receipts to GDP has always remained about 8% of GDP.

The individual income tax brought in 7.8% of GDP from 1952 to 1979 when the top tax rate ranged from 70% to 92%, 8% of GDP from 1993 to 1996 when the top tax rate was 39.6%, and 8.1% from 1988 to 1990 when the highest individual income tax rate was 28%. Mr. Obama's hope that raising only the highest tax rates could keep individual tax receipts well above 9% of GDP has been repeatedly tested for more than six decades. It has always failed.

Federal revenue from the individual income tax exceeded 9% of GDP only eight times in U.S. history — during World War II (9.4% in 1944), the recessions of 1969-70, 1981-82 and 1991-92, and the tech-stock boom-bust of 1998-2001. Revenues were a high share of GDP during the three recessions because GDP fell.

[SubGod22]

Cato or Ryan's budget: Ryan's Way Is the Better Way

[SubGod22]

Ratings Service Warns Politics Could Delay Budget Deal, Downgrades Outlook

Standard & Poor's Ratings Service warned Monday that politics may be getting in the way of a budget compromise, and -- in an announcement which sent stocks tumbling -- said it was lowering the outlook for U.S. sovereign debt to "Negative" from "Stable" due to the risk posed by the growing deficit.

Putting Washington on notice, S&P warned that it might be compelled to lower the country's rating if Congress can't reach a budget deal that brings the deficit under control.

The announcement puts added pressure on lawmakers and the White House as they pitch dueling budget plans. Republicans called it a "wake-up call" to get spending under control. But the Obama administration disputed S&P's finding and said negotiators are, to the contrary, ready to bridge their differences.

White House spokesman Jay Carney said the political process will outperform the agency's expectations, downplaying the significance of the announcement.

The agency reaffirmed the investment-grade credit ratings on the United States' long-term and short-term debt. S&P says the U.S. has a high-income, diversified and flexible economy that has helped it to encourage growth while containing inflation.

But the country's ballooning deficit could offset those positives over the next two years. The agency noted that the deficit grew to 11 percent of gross domestic income in 2009. That is much higher than the average of 2 percent to 5 percent in the previous six years.

The statement from S&P reflected what it called the "significant risk" that deadlock in Washington could last through the 2012 elections, leaving the government without a medium-term deficit strategy for another several years.

"Our negative outlook on our rating on the U.S. sovereign signals that we believe there is at least a one-in-three likelihood that we could lower our long-term rating on the U.S. within two years," S&P's credit analyst Nikola G. Swann said in a statement. "The outlook reflects our view of the increased risk that the political negotiations over when and how to address both the medium- and long-term fiscal challenges will persist until at least after national elections in 2012."

[SubGod22]

DeMint Threatens Filibuster on Debt Ceiling Vote

Throwing down the gauntlet, Republican Sen. Jim DeMint threatened Monday to block a vote in Congress on raising the U.S. debt ceiling unless he wins a balanced-budget amendment to the Constitution.

The filibuster threat comes a day after Treasury Secretary Tim Geithner suggested Republican leaders had offered private assurances to the White House that they ultimately would vote to raise the $14.3 trillion ceiling, regardless of whether a deal is reached on long-term spending cuts.

Publicly, Republicans say they will demand spending cuts as a condition for supporting a hike in the debt ceiling. They stood by that claim following Geithner's comments, and DeMint took their demands a step further.

"I will oppose any attempt to vote to raise the limit on our $14 trillion debt until Congress passes the balanced-budget amendment," the South Carolina conservative said. He first made the remarks to McClatchy, which his office confirmed to Fox News.

A balanced-budget amendment would prohibit the U.S. government from running a deficit. Such a provision would take a two-thirds vote in Congress, in addition to ratification by the states.