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November 30th, 2011 By Kevin Osborne | News | Posted In: Congress, Financial Crisis, Bailout, Washington

Retiree Group: Focus on True Causes of Deficit

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An organization of retired labor union workers is praising the failure of Congress' so-called “super committee” to agree on a deficit reduction deal as a good development for elderly Americans.

The Ohio chapter of the Alliance for Retired Americans said many politicians, especially Republicans, are unfairly blaming the deficit on Social Security, Medicare and Medicaid. They are using the budget battle as an excuse to dismantle programs they dislike, the group added.

“Although these programs were widely scapegoated in federal deficit discussions, (our recent) report points out that they are not the true cause of the deficit,” said David Friesner, president of the Ohio chapter, in a prepared statement. “The report notes the recent run-up in federal deficits resulted largely from 2001 and 2003 tax cuts; unpaid costs of the Iraq and Afghanistan wars; the Great Recession which dramatically reduced tax collections, and the Wall Street bank bailout.”

Friesner added, “This was not the first threat that retirees have faced to their Social Security, Medicare, and Medicaid – and it will not be the last. There may even be votes to cut these programs in December. At a time when so many retirees are struggling to get by, and when today’s workers wonder if they will ever be able to retire, it is unconscionable that Republicans continue to eye cuts to these programs as a way to fund an extension of tax cuts for the wealthiest Americans.”

A Nov. 27 New York Times column by Nobel Prize-winning economist Paul Krugman emphasizes the point.

Krugman writes that restoring pre-1980 higher tax brackets for the wealthiest Americans would reduce the federal deficit by more than $1 trillion over the next decade. By comparison, proposals to raise the age of Medicare eligibility to 67 would cause the deficit ti fall by just $125 billion during the next 10 years.

“The (Congressional) Budget Office estimates that outlays would fall by only $125 billion over the next decade, as the age increase phased in. And even when fully phased in, this partial dismantling of Medicare would reduce the deficit only about a third as much as could be achieved with higher taxes on the very rich,” Krugman wrote. “So raising taxes on the very rich could make a serious contribution to deficit reduction. Don’t believe anyone who claims otherwise.”

The Alliance for Retired Americans is a nonprofit, nonpartisan organization of retired union members affiliated with the AFL-CIO. Its predecessor organization was the National Council of Senior Citizens, which played a critical role in enacting Medicare into law.

The organization has more than 4 million members, with affiliates in 30 states.

 
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