It means what it means but thanks for the insult.
Find me an economist who says we have nothing to worry about when it comes to entitlements and then we can debate their honesty.
WASHINGTON — U.S. Treasury Secretary Steven T. Mnuchin and Office of Management and Budget (OMB) Director Mick Mulvaney today released details of the fiscal year (FY) 2018 final budget results. The deficit in FY 2018 was $779 billion, $113 billion more than in the prior fiscal year but $70 billion less than forecast in the FY 2019 Mid-Session Review (MSR). As a percentage of Gross Domestic Product (GDP), the deficit was 3.9 percent, 0.4 percentage point higher than the previous year.
President Trump continues to foster incredible economic strength that stands in stark contrast with the policies of the previous administration. The Tax Cuts and Jobs Act (TCJA), coupled with a renewed focus on economic freedom, has led to a booming economy:
America is enjoying the longest positive job-growth streak on record – more than four million new jobs have been created since President Trump took office.
For the first time on record there are more job openings than job seekers.
Real wage compensation has grown by 1.4 percent. Real median household income rose by 1.8 percent.
Manufacturing employment is growing at its fastest annual pace since 1995. Since the enactment of the TCJA, business fixed investment has increased at an 8.3 percent annual rate, up from 1.8 percent during the four quarters of 2016.
Consumer confidence is at peak levels and, during the past four quarters, real GDP has grown 2.9 percent, the fastest four-quarter pace since the second quarter of 2015.
It is clear that Americans are better off today than they were two years ago.
GDP 4+, unemployment below 4%
Also, you have to realize that the math shows that something HAS to be done with SS and Medicare. It's cannot keep running as it is. SS age HAS to be raised.
The U.S. unemployment rate is down to 4.1 percent, and economic growth could well increase in 2018. Consumer and business confidence is high. What could go wrong?
A group of distinguished economists from the Hoover Institution, a public-policy think tank at Stanford University, identifies a serious problem. The federal budget deficit is on track to exceed $1 trillion next year and get worse over time. Eventually, ever-rising debt and deficits will cause interest rates to rise, and the portion of tax revenue needed to service the growing debt will take an increasing toll on the ability of government to provide for its citizens and to respond to recessions and emergencies.
None of that is in dispute. But the Hoover economists then go wrong by arguing that entitlements are the sole cause of the problem, while the budget-busting tax bill that was passed last year is described as a “good first step.”
Entitlement programs support older Americans and those with low incomes or disabilities. Program costs are growing largely because of the aging of the population. This demographic problem is faced by almost all advanced economies and cannot be solved by a vague call to cut “entitlements” — terminology that dehumanizes the value of these programs to millions of Americans.
The deficit, of course, reflects the gap between spending and revenue. It is dishonest to single out entitlements for blame. The federal budget was in surplus from 1998 through 2001, but large tax cuts and unfunded wars have been huge contributors to our current deficit problem. The primary reason the deficit in coming years will now be higher than had been expected is the reduction in tax revenue from last year’s tax cuts, not an increase in spending. This year, revenue is expected to fall below 17 percent of gross domestic product — the lowest it has been in the past 50 years with the exception of the aftermath of the past two recessions.
All of us have supported corporate tax reform. The statutory tax rate was too high, much higher than in other Organization for Economic Cooperation and Development economies. However, because of deductions and breaks in the tax code, the effective marginal tax rate was similar to the average among competitor economies. The right way to do reform was to follow the model of the bipartisan tax reform of 1986, when rates were lowered while deductions were eliminated.
Instead, the tax cuts passed last year actually added an amount to America’s long-run fiscal challenge that is roughly the same size as the preexisting shortfalls in Social Security and Medicare. The tax cuts are reducing revenue by an average of 1.1 percent of GDP over the next four years. The Hoover authors minimized the cost of the tax cuts by noting that if major provisions are allowed to expire on schedule — certainly an open question, given political realities — they would amount to “only” 0.4 percent of GDP. Even this magnitude exceeds the Medicare Trustees’ projections of a 0.3 percent of GDP shortfall in Medicare hospital insurance over the next 75 years.
Just as entitlements are not the primary cause of the recent jump in the deficit, they also should not be the sole solution. It is important to use the right wording: The main entitlement programs are Social Security, Medicare, veterans benefits and Medicaid. These widely popular programs are indeed large and projected to grow as a share of the economy, not because of increased generosity of benefits but because of the aging of the population and the increase in economywide health costs.
There is some room for additional spending reductions in these programs, but not to an extent large enough to solve the long-run debt problem. The Social Security program needs only modest reforms to restore its 75-year solvency, and these should include adjustments in both spending and revenue. Additional revenue is critical because Social Security has become even more vital as fewer and fewer people have defined-benefit pensions. Medicare has been a leader in bending the health-care cost curve. Reforms to payments and reformed benefit structures in Medicare could do more to hold down its future costs.
As we focus on the long-run fiscal situation, our goal should be to put the debt on a declining path as a share of the economy. That will require running smaller deficits in strong economic periods — such as the present — to offset the larger deficits that are needed in recessions to restore demand and avoid deeper crises. Last year’s Tax Cuts and Jobs Act turned that economic logic on its head. The economy was already at or close to full employment and did not need a boost. This year’s bipartisan spending agreement contributed further to the ill-timed stimulus. The Federal Reserve will have to act to make sure the economy does not overheat.
Several years ago, there was broad agreement that responding to the looming fiscal challenge required a balanced approach that combined increased revenue with reduced spending. Two bipartisan commissions, Simpson-Bowles and Domenici-Rivlin, proposed such approaches that called for tax reform to raise revenue as a percent of GDP and judicious spending cuts.
Without necessarily agreeing with these specific plans, we believe a balanced approach is the correct one. Start with spending goals based on the priorities of the American people and then set tax policy to realize adequate revenue.
The Hoover economists’ advocacy of paying for large tax cuts with entitlement reductions would take the United States in the wrong direction.
ya think McConnell is proposing to expand Medicaid, like Obama did ??
Nope, hes gonna use it to plaster up the deficit expansion that result from the tax cuts for those above your pay grade.
I can afford a part B increase that will surely happen in 2020 health insurance premiums,everything will flow downhill. 2020 will give Trump time to get out of office so the GOP can blame the Democrats for the coming mess.
Oh well, Obama got us out of the last mess and had the economy up to speed when pLump came on board. Plump will have as much time to kick off the next recession just as GHW Bush did in his.
Every honest economist in the US (and the world) knows that eventually something must be done with entitlement programs.
They must either be reformed or our taxes must be increased to extraordinary levels.
No Dem wants to argue, honestly, about the latter, but quite a few Republicans are willing to do so on the former
The tax cuts to the rich is the biggest culprit, exploding the deficit.
The bipartisan military budget is next. Democrats insisted on giving them millions more than they wanted.
Unfortunately, it will cost me money, I do not wish to spend (I cancelled my WaPo subscription a year ago) to access your link.
We should have a 60% federal tax on all income over $200,000.
WASHINGTON - Congress' most powerful Republican has intentionally taken a back seat in the negotiations over how to end the government shutdown, even as it extends to a record three weeks with no resolution on the horizon.
Senate Majority Leader Mitch McConnell, R-Ky., has gotten Congress out of a lot of political jams in the past decade, including other shutdowns, fiscal cliffs and funding disputes.
But he's ceded control over the latest Washington stalemate to President Donald Trump, Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Charles E. Schumer, D-N.Y.
It's partly a reflection of the changing political dynamic now that Democrats control one chamber of Congress. But it may also say something about McConnell's evolving approach to dealing with an unpredictable president such as Trump, particularly in areas where they may disagree.
"Mitch understands what makes the mules plow around here, and certainly, I would like to see him involved more," said Sen. John Kennedy, R-La., who acknowledged the Kentucky Republican leader's ability to negotiate. "I see his point of view. Until Mrs. Pelosi and President Trump can even try to find a sliver of common ground, what could he contribute? I haven't seen that sliver yet."
McConnell has pledged that he and other Senate Republicans are aligned with Trump - although cracks have emerged, particularly among Republicans up for reelection in 2020. That leaves little place for McConnell in the public debate until Trump - the most powerful Republican figure in Washington, as well as the states where many Republicans will face reelection in two years - can find some kind of compromise with Democrats.
Democrats say the Senate majority leader has "abdicated" his responsibility and handed the keys to the castle to Trump, particularly by blocking votes on government funding bills approved by the Democrat-led House. A half dozen or so Republican senators have indicated they might support reopening the government without border wall money.
"He thinks he's losing his caucus, and he doesn't want a vote on the floor," said Sen. Richard J. Durbin, D-Ill. "His caucus is pretty tired of this shutdown, and he doesn't want a visible manifestation of that."
McConnell has a record of negotiating bipartisan deals as well as protecting his Republican members from politically costly votes. Five years ago, McConnell referred to himself as "the guy that gets us out of shutdowns." He back-channeled during the Obama administration with Vice President Joe Biden, his longtime Senate colleague, to construct deals to raise the debt limit and fund the government.
McConnell never wanted a shutdown. Last month, he led his Republican lawmakers into a vote for a government spending bill without wall money. Senate Republicans approved the bill thinking the White House was on board or confident that Trump would feel pressured to sign it. Instead, Trump bashed the approach as inadequate and the government shut down.
At least Trump didn't attack his fellow Republicans on Twitter. In a rare example of restraint, Trump cast his social media ire on Democrats.
Now McConnell, perhaps burned but famously unmoved by public pressure, is staying largely in the background. He says the Senate won't vote again on a spending bill until Trump and Democratic leaders publicly approve it.
"That is the only way to move the country forward," he said earlier this week.
Some of his fellow Republicans fear there won't be a solution until McConnell gets involved, whether publicly or privately.
McConnell "is one of the best you've ever known in the inner workings of the Senate," said Sen. Richard Shelby, R-Ala., the top Senate appropriator. "Sometimes there is nothing going on (publicly), but it's about what could be going on" that members don't see.
McConnell has stayed relatively quiet, except to reaffirm that Senate Republicans stand by Trump. This week, he blocked Democrats' efforts to try to pass bills to reopen the government and chided Democrats for filibustering unrelated legislation he tried to move during the shutdown. He skipped two of Trump's lengthy appearances before reporters at the White House, even though his House Republican counterparts stood behind the president. Aides say he didn't know about the first press conference.
Since then, he hasn't embraced any off-ramps or voiced an opinion about Trump's threat to declare a national emergency to divert military funds for a wall.
Early Thursday, Sen. Lindsey Graham, R-S.C., floated an immigration proposal that he suggested would end the standoff. "The last best hope to solve this problem is in the Senate," he said as he crafted a plan to fund the government with border funding in exchange for providing protections for certain immigrants known as "Dreamers."
But after huddling with McConnell on the plan, Graham declared it dead and called for Trump to declare the border a national emergency.
The White House seems to appreciate McConnell's approach.
"Leader McConnell is standing strong. He's in the room ... he's been in the room every step of the way," Vice President Mike Pence told reporters in the Capitol this week. "Republicans are standing rock solid with the president and Leader McConnell is right there with them."
In fact, McConnell's diminished role may help Republicans: It reinforces the GOP message that the shutdown is a battle between Trump and Democrats in Congress, not Republicans. Recent polling suggests that Americans first blame Trump for the shutdown, then Democrats and, finally, Republicans.
About half of voters, or 47 percent, blame Trump for the shutdown, according to a recent Politico/Morning Consult poll. A third of respondents blame Democrats in Congress, and 5 percent say it rests with congressional Republicans.
In a remarkable rebuke of Senate Majority Leader Mitch McConnell and the White House, eleven Republicans on Tuesday joined with unanimous Democrats to keep alive a resolution opposing the Trump administration's decision to diminish sanctions against Russia.
The development underscored the growing foreign policy fissures in the Republican Party, whose leaders have sparred with the Trump administration in recent weeks over everything from the U.S. military pullout in Syria to its stance on humanitarian abuses in Saudi Arabia.
The Republican-controlled Senate voted 57 to 42 against the attempt by McConnell, R-Ky., to table the resolution crafted by Senate Minority Leader Chuck Schumer, D-N.Y. The Republicans who defied McConnell on the procedural vote were Sens. John Kennedy, Susan Collins, Marco Rubio, John Boozman, Tom Cotton, Steve Daines, Cory Gardner, Josh Hawley, Ben Sasse, Martha McSally and Jerry Moran.
McConnell set up another procedural vote Wednesday to end debate on the resolution. The vote, set for 12:30 p.m. ET, needs 60 votes to pass.
“We’re only a few Republican votes short of the U.S. Senate telling Putin he can’t run the show no matter what President Trump and his administration try to do," Schumer said in a statement. "If Republican Senators agree with Leader McConnell, who said that Putin is a ‘thug’ – they’ll vote yes tomorrow.”
Treasury Secretary Steven Mnuchin was urging senators on Tuesday to vote against Schumer's resolution, which called for maintaining sanctions on companies linked to Russian oligarch Oleg Deripaska. The measure would block a Treasury Department move, announced in December, to lift penalties against the aluminum manufacturing giant Rusal and two other companies connected to Deripaska.
The 2017 sanctions law permits Congress to override the White House's efforts to reduce penalties on Russia, but a 60-vote threshold would effectively be required to defeat Trump's potential veto.
Mnuchin met with Republican senators behind closed doors Tuesday in the hours before a planned Senate vote on the Schumer sanctions resolution.
Speaking to reporters after the meeting, Mnuchin said, "We have been tougher on Russia with more sanctions than any other administration." He said the sanctions "shouldn't be a political issue."
Tuesday's development marked a striking defeat not only for Mnuchin, and the latest in a string of losses for McConnell. For more than a week, McConnell has tried and failed on three occasions to get the Senate to start debate on a bill to assist Israel and sanction Syria. Each of the procedural votes to launch debate on that measure went down to defeat.
In the new Congress, the Republican Senate has failed three times to begin debate on a measure backed by McConnell. But the first measure on which the Senate actually was able to begin debate in the new Congress is the one backed by Schumer.
The Treasury Department says the Russian companies have committed to separating from Deripaska, who will remain blacklisted as part of an array of measures announced in early April that targeted tycoons close to the Kremlin. It also warns that the sanctions could upset global aluminum markets.
The vote comes as Democrats have questioned President Trump's Russian ties and questioned whether his administration is being too soft on Russia.
Schumer, who introduced the resolution and called for a vote on it, called the Treasury Department decision "sanctions relief for President [Vladimir] Putin's trusted agents." Congress has 30 days to block the move to terminate the sanctions.
Democratic House leaders have also criticized the move and are considering a similar vote. The new Democratic chairmen of seven committees called Mnuchin in for a classified briefing last week on the easing of the sanctions.
At issue is a December announcement from the Treasury Department that the U.S. would lift sanctions on the three companies — Rusal, EN+ Group and the Russian power company JSC EuroSibEnergo. EN+ Group is a holding company that owns nearly 50 percent of Rusal.
In a letter asking Mnuchin for a briefing, the committee chairmen said the sanctions deal appears to allow Deripaska to keep "significant ownership" of one of the companies. They did not elaborate.
The Treasury Department maintains that the companies have committed to diminish Deripaska's ownership and sever his control. In a statement released ahead of the House briefing, Mnuchin reiterated that Deripaska remains under sanctions, "his property and interests remain blocked, and any companies he controls are also sanctioned."
Treasury added that if the companies remained under sanctions, the Russian government might move to nationalize the company, thus shutting it out from any outside control.
Democrats have asked for an extension of the 30-day timeline because the sanctions announcement came just before a holiday recess and the start of the government shutdown. Mnuchin said after his Senate meeting Tuesday that they will see how the Senate vote goes.
"Our view is that we have great responsibility in managing the sanctions programs all over the world, and we take those responsibilities very seriously at Treasury," Mnuchin said.
Senate Majority Leader Mitch McConnell is facing scrutiny over his decision to send senators home for the weekend as the House sought to finalize its coronavirus response bill to provide relief for families amid the outbreak.
On Sunday evening, McConnell tweeted a statement from his iPhone announcing that passing a coronavirus relief package would be an "urgent" priority for Senate this week.
Critics were quick to leap on the GOP senator, however, pointing out that while he had sent senators home for the weekend and reportedly returned to Kentucky himself, House representatives had been working to solidify the Families First CoronaVirus Response Act, passing the bill on Saturday.
The House passed the bipartisan relief package, which includes provisions for paid emergency leave for those affected by the COVID-19 outbreak, as well as free testing for those who need it, in the early hours of Saturday morning.
While the bill saw bipartisan support, with 363 Republicans and Democrats coming together to vote in favor of the measure, 40 GOP members voted against it and Independent Justin Amash voted "present."
In a statement, Senate Minority Leader Chuck Schumer said it was "remarkably irresponsible and out of touch for Sen. McConnell to send senators out of town in the middle of a public health crisis before the House passed this vital people-focused legislation."
According to The Washington Post, McConnell had already been absent from negotiations on the coronavirus response legislation on Friday, with the senator attending a judicial event in Kentucky with Supreme Court Justice Brett Kavanaugh that day.
Schumer was not the only one to take aim at McConnell, with a number of commentators hitting out at the Senate majority leader for his handling of the situation.
"Oh cool, you're back from your three day weekend? There's like a 1000 more cases than when you left," political commentator and MSNBC show host Chris Hayes said in a response to McConnell's Sunday tweet.
"Define 'urgent,' Mr. Weekender," MSNBC host Joy Reid weighed in.
Republicans have defended the decision to send senators home for the weekend, however, with McConnell's own statement pointing out that the House had not yet finalized the coronavirus response bill when he made the decision on Friday.
"First, we still need to receive the final version of the House's coronavirus relief legislation," McConnell said.
"I know Senators on both sides are carefully reviewing the details and are eager to act swiftly to help American workers, families, and small businesses navigate this challenging time," he asserted.
Approached for comment by Newsweek, a spokesperson for McConnell provided a copy of the Senate majority leader's statement and stressed the fact that Senate has yet to receive the House bill on the Senate side.
Asked whether that would still have been the case had senators remained in D.C., the spokesperson did not immediately respond.
It is expected that the Families First CoronaVirus Response Act will be a priority for Senate on Monday, with President Donald Trump already voicing his support for the measure, paving the way for the bill to move forward.