In a few more days, 2 MILLION families will lose their unemployment benefits. At that point, they will have no income at all. As a result, we can look forward to more homelessness, more robberies, more domestic violence and some suicides. In April, it will get worse as several more MILLION families lose their unemployment benefits.
Obama's economic genius, Larry Summers, believes that if you are unemployed it is because you are lazy.
The Senate's political genius, Mitch McCollum, believes that if you get unemployment benefits you are too lazy to look for work.
Apparently, nobody in Washington understands that for every job vacancy today, there are five applicants. Is the math here too deep for the people in Washington?
Thursday, November 18, 2010
Want to Know Why We Have a Deficit??
When the "brains" in Washington decided to bail out General Motors, we bought something like 61% of the shares of the company for $44. Yesterday, we sold a majority of those shares for $35.
The Secretary of the Treasury proclaimed that event as a great financial achievement. But then, he is a guy who has trouble paying his taxes.
Still wonder why we have a huge deficit that is growing daily?
The Secretary of the Treasury proclaimed that event as a great financial achievement. But then, he is a guy who has trouble paying his taxes.
Still wonder why we have a huge deficit that is growing daily?
Wednesday, November 17, 2010
Controlling Medical Costs
In The Great Recession Conspiracy, we make the point that 60%-70%-80% of all medical costs are incurred in the last two months, two weeks, two days of life. All of these numbers are right. It just depends on who is counting and what they are counting.
The point remains that we could dramatically reverse our sky rocketing health care costs with a couple of simple and really cheap actions.
*Pay doctors to explain the options to patients and their families. Or it could be a nonMD with special training.
*Pay for Living Wills.
*Pay for DNR requests in writing.
A story in today's Los Angeles Times makes all of these points very clearly about just one disease.
latimes.com
Study examines end-of-life care for cancer patients
Many in their final days receive costly, aggressive treatments they may not want, according to researchers at the Dartmouth Atlas of Health Care. In California, Los Angeles County had the highest percentage of patients dying in hospitals.
By Molly Hennessy-Fiske, Los Angeles Times
November 17, 2010
Advertisement
One in three patients with advanced cancer spend their final days in hospitals receiving costly, aggressive treatments they may not want, according to a major national study released Tuesday.
Researchers at the Dartmouth Atlas of Health Care, whose work on hospital spending has been cited by the Obama administration, reviewed a sample of 20% of Medicare beneficiaries nationwide with advanced cancer who died between 2003 and 2007, including patients at 65 California hospitals.
Of nearly 240,000 terminally ill patients studied, about 29% died in hospitals. The likelihood of dying in a hospital varied significantly depending on where the person was treated, the report found.
In California, Los Angeles County had the highest percentage of advanced cancer patients dying in hospitals at about 41%, followed by Fresno (39%), Bakersfield (37%), San Francisco (36%) and Modesto (36%).
"We as physicians often make assumptions about what patients and their families want," said Dr. David C. Goodman, the report's lead author. "We are particularly uncomfortable with sharing the news that a cure is unlikely. But what patients really want is for physicians to be honest with them and share the full range of treatment choices."
Dartmouth's past reports have been widely circulated on Capitol Hill, generating debate but few policy changes. The latest report has the potential to spark meaningful conversations about end-of-life care, but it could also fuel concern about rationing healthcare if lawmakers use it to propose Medicare cuts or incentives for doctors to discuss less expensive — and less aggressive — treatment with terminal patients, he said.
"Having payment for end-of-life conversations was exactly what led people to start screaming about death panels," said Stephen Zuckerman, a health economist and senior fellow at the Washington, D.C.-based Urban Institute. "If you provide financial incentives for people to move into less aggressive treatment, is that the reaction you're going to get?"
A little more than half of patients surveyed used hospice care during their last month of life, but researchers found that in some cases referrals came so close to death that they were unlikely to have provided much assistance. Terminally ill cancer patients in L.A. County were less likely to be cared for in a hospice at the end of their life than the national average, the report found, with about 40% referred to hospice care.
Barbara Hayes, 70, of Los Angeles was diagnosed with metastatic colon cancer in May and met with a hospice worker Tuesday after suffering a heart attack that sent her to Cedars-Sinai Medical Center's intensive care unit. She signed paperwork refusing life-sustaining, aggressive treatment and said she was leaning toward hospice care.
"I want to just let it go and let nature take its course," said Hayes, who retired from an interior design firm and is covered by Medicare. "I don't want tubes down my throat."
Susan Negreen, executive director of the Sacramento-based California Hospice and Palliative Care Assn., said the Dartmouth report underscores the need for hospice awareness. Statewide, about 35% of Medicare deaths were in hospice, slightly below the national average of about 37% as of 2008, the most recent year for which information was available.
"It's very hard for people to realize they have run out of options," Negreen said. "There's always one more round of chemo or one more procedure they can do."
The report contrasted medical interventions at big-city hospitals with facilities in mid-sized or small cities, often in the Midwest. Cancer patients were more likely to receive "aggressive life-sustaining treatment" — including CPR, feeding and breathing tubes — during the last weeks of their lives in Manhattan (18%), Los Angeles (18%), Orange County (17%) and Chicago (16%) as compared with Minneapolis (4%), Des Moines (5%) and Seattle (6%).
About 6% of the patients nationwide received chemotherapy during their last two weeks of life, 7% in Los Angeles County, the study showed. In some areas, including Santa Barbara County, the rate exceeded 10%.
Dartmouth researchers have drawn criticism in the past for ignoring regional differences in patient health and the cost of providing care and for focusing on the cost of care instead of other measures of hospital quality.
Dr. Michael Langberg, chief medical officer at Cedars-Sinai, said the report was useful for discussion but "I remain concerned about taking their kind of research and from that leaping to policy."
Goodman, the report's author who is also director of Dartmouth's Center for Health Policy Research, said researchers were not "looking to control costs on the backs of people with advanced cancer" or to penalize hospitals for aggressive treatment.
He said the goal of the report was to promote palliative care, which aims to minimize patient suffering and promote quality of life, but is not covered as comprehensively as hospital care by the government private insurers. Medicare covers hospice services but requires patients who choose that option to then forgo most hospital treatment.
Federal officials are offering three-year grants to 15 hospice programs nationwide to serve patients without requiring them to give up hospital treatment.
Dr. Tom Rosenthal, chief medical officer for the UCLA Health System, said the study raises important questions about how doctors manage end-of-life care. The five UC hospitals recently joined Cedars-Sinai in an effort to standardize palliative-care programs and provide patient educators to explain intensive care and other end-of-life options. The project will be paid for by a three-year, $9.9-million federal stimulus grant.
"There really are nationally no norms for end-of-life treatment," Rosenthal said, but he cautioned that comparisons among hospitals are complicated by their mix of patients. "The people who want to die peacefully at home are not the patients pressuring their doctors to send them to a major urban care center."
Cheryl Stratos, 46, of McLean, Va., flies across the country each month to participate in a clinical trial at UCLA's Jonsson Comprehensive Cancer Center in Westwood to treat her metastatic melanoma.
Stratos, who runs a marketing firm and has a 13-year-old son, said she is not sure whether she would want life-sustaining treatment — her energy has been focused on seeking care, first at Georgetown University Hospital, then Memorial Sloan-Kettering Cancer Center in New York City and UCLA.
"It all depends on where I am in the process," she said.
molly.hennessy-fiske@latimes.com
Copyright © 2010, Los Angeles Times
The point remains that we could dramatically reverse our sky rocketing health care costs with a couple of simple and really cheap actions.
*Pay doctors to explain the options to patients and their families. Or it could be a nonMD with special training.
*Pay for Living Wills.
*Pay for DNR requests in writing.
A story in today's Los Angeles Times makes all of these points very clearly about just one disease.
latimes.com
Study examines end-of-life care for cancer patients
Many in their final days receive costly, aggressive treatments they may not want, according to researchers at the Dartmouth Atlas of Health Care. In California, Los Angeles County had the highest percentage of patients dying in hospitals.
By Molly Hennessy-Fiske, Los Angeles Times
November 17, 2010
Advertisement
One in three patients with advanced cancer spend their final days in hospitals receiving costly, aggressive treatments they may not want, according to a major national study released Tuesday.
Researchers at the Dartmouth Atlas of Health Care, whose work on hospital spending has been cited by the Obama administration, reviewed a sample of 20% of Medicare beneficiaries nationwide with advanced cancer who died between 2003 and 2007, including patients at 65 California hospitals.
Of nearly 240,000 terminally ill patients studied, about 29% died in hospitals. The likelihood of dying in a hospital varied significantly depending on where the person was treated, the report found.
In California, Los Angeles County had the highest percentage of advanced cancer patients dying in hospitals at about 41%, followed by Fresno (39%), Bakersfield (37%), San Francisco (36%) and Modesto (36%).
"We as physicians often make assumptions about what patients and their families want," said Dr. David C. Goodman, the report's lead author. "We are particularly uncomfortable with sharing the news that a cure is unlikely. But what patients really want is for physicians to be honest with them and share the full range of treatment choices."
Dartmouth's past reports have been widely circulated on Capitol Hill, generating debate but few policy changes. The latest report has the potential to spark meaningful conversations about end-of-life care, but it could also fuel concern about rationing healthcare if lawmakers use it to propose Medicare cuts or incentives for doctors to discuss less expensive — and less aggressive — treatment with terminal patients, he said.
"Having payment for end-of-life conversations was exactly what led people to start screaming about death panels," said Stephen Zuckerman, a health economist and senior fellow at the Washington, D.C.-based Urban Institute. "If you provide financial incentives for people to move into less aggressive treatment, is that the reaction you're going to get?"
A little more than half of patients surveyed used hospice care during their last month of life, but researchers found that in some cases referrals came so close to death that they were unlikely to have provided much assistance. Terminally ill cancer patients in L.A. County were less likely to be cared for in a hospice at the end of their life than the national average, the report found, with about 40% referred to hospice care.
Barbara Hayes, 70, of Los Angeles was diagnosed with metastatic colon cancer in May and met with a hospice worker Tuesday after suffering a heart attack that sent her to Cedars-Sinai Medical Center's intensive care unit. She signed paperwork refusing life-sustaining, aggressive treatment and said she was leaning toward hospice care.
"I want to just let it go and let nature take its course," said Hayes, who retired from an interior design firm and is covered by Medicare. "I don't want tubes down my throat."
Susan Negreen, executive director of the Sacramento-based California Hospice and Palliative Care Assn., said the Dartmouth report underscores the need for hospice awareness. Statewide, about 35% of Medicare deaths were in hospice, slightly below the national average of about 37% as of 2008, the most recent year for which information was available.
"It's very hard for people to realize they have run out of options," Negreen said. "There's always one more round of chemo or one more procedure they can do."
The report contrasted medical interventions at big-city hospitals with facilities in mid-sized or small cities, often in the Midwest. Cancer patients were more likely to receive "aggressive life-sustaining treatment" — including CPR, feeding and breathing tubes — during the last weeks of their lives in Manhattan (18%), Los Angeles (18%), Orange County (17%) and Chicago (16%) as compared with Minneapolis (4%), Des Moines (5%) and Seattle (6%).
About 6% of the patients nationwide received chemotherapy during their last two weeks of life, 7% in Los Angeles County, the study showed. In some areas, including Santa Barbara County, the rate exceeded 10%.
Dartmouth researchers have drawn criticism in the past for ignoring regional differences in patient health and the cost of providing care and for focusing on the cost of care instead of other measures of hospital quality.
Dr. Michael Langberg, chief medical officer at Cedars-Sinai, said the report was useful for discussion but "I remain concerned about taking their kind of research and from that leaping to policy."
Goodman, the report's author who is also director of Dartmouth's Center for Health Policy Research, said researchers were not "looking to control costs on the backs of people with advanced cancer" or to penalize hospitals for aggressive treatment.
He said the goal of the report was to promote palliative care, which aims to minimize patient suffering and promote quality of life, but is not covered as comprehensively as hospital care by the government private insurers. Medicare covers hospice services but requires patients who choose that option to then forgo most hospital treatment.
Federal officials are offering three-year grants to 15 hospice programs nationwide to serve patients without requiring them to give up hospital treatment.
Dr. Tom Rosenthal, chief medical officer for the UCLA Health System, said the study raises important questions about how doctors manage end-of-life care. The five UC hospitals recently joined Cedars-Sinai in an effort to standardize palliative-care programs and provide patient educators to explain intensive care and other end-of-life options. The project will be paid for by a three-year, $9.9-million federal stimulus grant.
"There really are nationally no norms for end-of-life treatment," Rosenthal said, but he cautioned that comparisons among hospitals are complicated by their mix of patients. "The people who want to die peacefully at home are not the patients pressuring their doctors to send them to a major urban care center."
Cheryl Stratos, 46, of McLean, Va., flies across the country each month to participate in a clinical trial at UCLA's Jonsson Comprehensive Cancer Center in Westwood to treat her metastatic melanoma.
Stratos, who runs a marketing firm and has a 13-year-old son, said she is not sure whether she would want life-sustaining treatment — her energy has been focused on seeking care, first at Georgetown University Hospital, then Memorial Sloan-Kettering Cancer Center in New York City and UCLA.
"It all depends on where I am in the process," she said.
molly.hennessy-fiske@latimes.com
Copyright © 2010, Los Angeles Times
Monday, November 15, 2010
The GoldmanSachs No Reform Financial Bill
If you wondered why I truly disliked the Dodd-Frank phony financial reform bill, read this front page story in today's Los Angeles Times. The ink isn't even dry and the banks are already finding ways around the provisions, so just how good can they be?
latimes.com
Financial reform law offers look at lobbyists' efforts to shape it
Activists for banks, hedge funds and other firms have logged hundreds of meetings with federal regulators since the bill was passed. Many seek exemptions from key provisions.
By Nathaniel Popper, Los Angeles Times
November 15, 2010
Having failed to block financial reform, Wall Street is now focused on the next best thing: ensuring that the law is loosely interpreted and weakly enforced.
Lobbyists for banks, hedge funds and other firms have logged hundreds of meetings with federal regulators since the reform bill was signed into law July 21. The lobbyists are often pushing for exemptions to the bill's key provisions, including measures that would limit risky Wall Street trading and shield consumers from excessive bank fees, records and interviews show.
In an Aug. 18 meeting with Federal Reserve officials, for instance, Citigroup lobbyists warned that new rules restricting trading by hedge funds "may have a significant impact on the competitiveness of U.S. firms," according to a summary released by the Fed.
The incessant appeals — there were 18 separate meetings between lobbyists and government officials Sept. 28 alone — have become a sore spot with some regulators.
"I want to be professional and polite and courteous, and I'll let them say their peace," said Bart Chilton, a member of the Commodity Futures Trading Commission. "But I don't think it's a very valuable use of their time or mine, because that is not the direction we were instructed to go by Congress."
The meetings would normally be cloaked in secrecy. But in keeping with the spirit of financial reform, the Fed, the CFTC and two other agencies have begun disclosing their contacts with lobbyists on the new reform law, providing a rare glimpse behind the curtain.
That glimpse frequently shows companies arguing that their operations shouldn't be covered by the new regulations, or that the regulations should be narrowly written, according to summaries posted by the federal agencies on their websites.
For example, lawyers for investment firm BlackRock met with CFTC officials Sept. 23 to seek an exemption from new restrictions on the trading of derivatives — or investments whose value is tied to an underlying asset. Otherwise, BlackRock warned, it would "be forced to curtail our client-service activities" according to a document posted in connection with the meeting.
Not all of the meetings involve Wall Street firms. Four executives of Ford's consumer finance division met with Fed officials Aug. 14, asking that its vehicle loans "be exempt" from rules that are designed to rein in risky lending, according to documents released by the agency.
And the American Petroleum Institute met with Securities and Exchange Commission officials Sept. 27 to argue that new rules forcing oil and mining firms to report payments made to foreign governments "raises significant practicality and cost-benefit concerns by vastly increasing the amount of data that must be reported."
The names listed most frequently in the logs are Goldman Sachs, with 21 meetings with regulators, and JPMorgan Chase, with 23. Jamie Dimon, chairman and chief executive of JPMorgan, was among those in attendance when a bank contingent met Oct. 8 with Federal Deposit Insurance Corp. Chairwoman Sheila Bair, records show.
In all, regulators have had at least 510 meetings with lobbyists representing 325 organizations since July, according to a Times analysis of meeting logs. That's when the Fed, the SEC, the FDIC and the CFTC first began keeping the logs on their websites, in the spirit of transparency that was a driving factor for the financial reform law.
Despite taking up 2,319 pages, the Wall Street Reform and Consumer Protection Act left key details to regulatory agencies. Consumer groups applauded the decision to release details of the meetings, saying it provides a rare window into the rule-making process.
"It helps to alleviate the sense that all the important decisions are being made behind closed doors," said Barbara Roper, the director of investor protection for the Consumer Federation of America.
Regulators, lobbyists and consumer groups could not recall another instance of government agencies listing such meetings. But the lists appear to have attracted scant public notice — and do not appear to have influenced the rule-making process.
"The meetings recently have been like the meetings we have always had," said Elisse Walter, a member of the SEC.
At the same time, the logs show that consumer interests are heavily outnumbered by Wall Street.
More than 90% of the groups that appear in the meeting logs are banks, hedge funds and other big companies that rely on the financial industry, according to The Times' analysis. Some worry that the imbalance could affect the rules regulators are drafting to implement the law.
"Clearly the big banks have a ton of money to put toward this battle, and the people who are fighting for reform just don't have the resources or the people," said Heather Slavkin, a policy advisor for the AFL-CIO who has attended several meetings with regulators.
Many of the meetings involve arcane facets of the reform law, such as the structure of new trading exchanges that are designed to bring greater transparency to the market for complex securities such as credit default swaps.
Sheila Krumholz, the executive director of the Center for Responsive Politics, is concerned that Wall Street's voice will be especially powerful in discussions on implementing these measures.
"As you get into the nitty-gritty details there aren't a lot of people who can give a countervailing argument," she said.
But what's hammered out in the meetings probably will affect Main Street as well as Wall Street. The recent financial crisis underscored how even obscure activities can have a momentous effect on the pensions and pocketbooks of all Americans. The unregulated investments that banks made in complex, mortgage-based securities, for instance, eventually vaporized billions of dollars in retirement savings.
In addition, the regulators and lobbyists are discussing a wide variety of consumer-related topics such as debit card fees and retail investment brokers.
Industry officials declined to comment on specific meetings. But in general, finance executives say they are trying to educate regulators about the market segments that will be affected by the law, and they note that several of the meetings were convened at the request of regulators.
"The sheer volume of the number of rules that they need to write here is so much greater than in the past that you'll see a lot more outreach — and lot more of these meetings and efforts to lobby," said Robert Pickel, executive vice chairman of the International Swaps and Derivatives Assn.
Wall Street representatives say the risk is that financial reform will put the brakes on the financial recovery.
"The worst-case scenario for the banks is that … we end up with rules that constrain markets, which then impact the economy," said Tim Ryan, CEO of the Securities Industry and Financial Markets Assn. "There is a big risk here of overshooting the mark."
The SEC's Walter said she was bothered by the fact that regulators were not usually good hosts, so she bought a coffee machine for her office for visitors.
"I grew up in a nice Jewish home in New York and if you don't offer someone a cup of coffee you are kind of a jerk," Walter said.
Chilton said he is not always so gracious. In one instance he grew frustrated after seeing the same law firm three times in two weeks — representing three different financial companies but making the same case each time.
"I have to say, the third time I had the meeting my attention span was dwindling," Chilton said. "I want to know how to make this work, and get useful information about how to go forward — not fight battles that they've already lost on Capitol Hill."
nathaniel.popper@latimes.com
Times staff writer Thomas Suh Lauder contributed to this report.
Copyright © 2010, Los Angeles Times
latimes.com
Financial reform law offers look at lobbyists' efforts to shape it
Activists for banks, hedge funds and other firms have logged hundreds of meetings with federal regulators since the bill was passed. Many seek exemptions from key provisions.
By Nathaniel Popper, Los Angeles Times
November 15, 2010
Having failed to block financial reform, Wall Street is now focused on the next best thing: ensuring that the law is loosely interpreted and weakly enforced.
Lobbyists for banks, hedge funds and other firms have logged hundreds of meetings with federal regulators since the reform bill was signed into law July 21. The lobbyists are often pushing for exemptions to the bill's key provisions, including measures that would limit risky Wall Street trading and shield consumers from excessive bank fees, records and interviews show.
In an Aug. 18 meeting with Federal Reserve officials, for instance, Citigroup lobbyists warned that new rules restricting trading by hedge funds "may have a significant impact on the competitiveness of U.S. firms," according to a summary released by the Fed.
The incessant appeals — there were 18 separate meetings between lobbyists and government officials Sept. 28 alone — have become a sore spot with some regulators.
"I want to be professional and polite and courteous, and I'll let them say their peace," said Bart Chilton, a member of the Commodity Futures Trading Commission. "But I don't think it's a very valuable use of their time or mine, because that is not the direction we were instructed to go by Congress."
The meetings would normally be cloaked in secrecy. But in keeping with the spirit of financial reform, the Fed, the CFTC and two other agencies have begun disclosing their contacts with lobbyists on the new reform law, providing a rare glimpse behind the curtain.
That glimpse frequently shows companies arguing that their operations shouldn't be covered by the new regulations, or that the regulations should be narrowly written, according to summaries posted by the federal agencies on their websites.
For example, lawyers for investment firm BlackRock met with CFTC officials Sept. 23 to seek an exemption from new restrictions on the trading of derivatives — or investments whose value is tied to an underlying asset. Otherwise, BlackRock warned, it would "be forced to curtail our client-service activities" according to a document posted in connection with the meeting.
Not all of the meetings involve Wall Street firms. Four executives of Ford's consumer finance division met with Fed officials Aug. 14, asking that its vehicle loans "be exempt" from rules that are designed to rein in risky lending, according to documents released by the agency.
And the American Petroleum Institute met with Securities and Exchange Commission officials Sept. 27 to argue that new rules forcing oil and mining firms to report payments made to foreign governments "raises significant practicality and cost-benefit concerns by vastly increasing the amount of data that must be reported."
The names listed most frequently in the logs are Goldman Sachs, with 21 meetings with regulators, and JPMorgan Chase, with 23. Jamie Dimon, chairman and chief executive of JPMorgan, was among those in attendance when a bank contingent met Oct. 8 with Federal Deposit Insurance Corp. Chairwoman Sheila Bair, records show.
In all, regulators have had at least 510 meetings with lobbyists representing 325 organizations since July, according to a Times analysis of meeting logs. That's when the Fed, the SEC, the FDIC and the CFTC first began keeping the logs on their websites, in the spirit of transparency that was a driving factor for the financial reform law.
Despite taking up 2,319 pages, the Wall Street Reform and Consumer Protection Act left key details to regulatory agencies. Consumer groups applauded the decision to release details of the meetings, saying it provides a rare window into the rule-making process.
"It helps to alleviate the sense that all the important decisions are being made behind closed doors," said Barbara Roper, the director of investor protection for the Consumer Federation of America.
Regulators, lobbyists and consumer groups could not recall another instance of government agencies listing such meetings. But the lists appear to have attracted scant public notice — and do not appear to have influenced the rule-making process.
"The meetings recently have been like the meetings we have always had," said Elisse Walter, a member of the SEC.
At the same time, the logs show that consumer interests are heavily outnumbered by Wall Street.
More than 90% of the groups that appear in the meeting logs are banks, hedge funds and other big companies that rely on the financial industry, according to The Times' analysis. Some worry that the imbalance could affect the rules regulators are drafting to implement the law.
"Clearly the big banks have a ton of money to put toward this battle, and the people who are fighting for reform just don't have the resources or the people," said Heather Slavkin, a policy advisor for the AFL-CIO who has attended several meetings with regulators.
Many of the meetings involve arcane facets of the reform law, such as the structure of new trading exchanges that are designed to bring greater transparency to the market for complex securities such as credit default swaps.
Sheila Krumholz, the executive director of the Center for Responsive Politics, is concerned that Wall Street's voice will be especially powerful in discussions on implementing these measures.
"As you get into the nitty-gritty details there aren't a lot of people who can give a countervailing argument," she said.
But what's hammered out in the meetings probably will affect Main Street as well as Wall Street. The recent financial crisis underscored how even obscure activities can have a momentous effect on the pensions and pocketbooks of all Americans. The unregulated investments that banks made in complex, mortgage-based securities, for instance, eventually vaporized billions of dollars in retirement savings.
In addition, the regulators and lobbyists are discussing a wide variety of consumer-related topics such as debit card fees and retail investment brokers.
Industry officials declined to comment on specific meetings. But in general, finance executives say they are trying to educate regulators about the market segments that will be affected by the law, and they note that several of the meetings were convened at the request of regulators.
"The sheer volume of the number of rules that they need to write here is so much greater than in the past that you'll see a lot more outreach — and lot more of these meetings and efforts to lobby," said Robert Pickel, executive vice chairman of the International Swaps and Derivatives Assn.
Wall Street representatives say the risk is that financial reform will put the brakes on the financial recovery.
"The worst-case scenario for the banks is that … we end up with rules that constrain markets, which then impact the economy," said Tim Ryan, CEO of the Securities Industry and Financial Markets Assn. "There is a big risk here of overshooting the mark."
The SEC's Walter said she was bothered by the fact that regulators were not usually good hosts, so she bought a coffee machine for her office for visitors.
"I grew up in a nice Jewish home in New York and if you don't offer someone a cup of coffee you are kind of a jerk," Walter said.
Chilton said he is not always so gracious. In one instance he grew frustrated after seeing the same law firm three times in two weeks — representing three different financial companies but making the same case each time.
"I have to say, the third time I had the meeting my attention span was dwindling," Chilton said. "I want to know how to make this work, and get useful information about how to go forward — not fight battles that they've already lost on Capitol Hill."
nathaniel.popper@latimes.com
Times staff writer Thomas Suh Lauder contributed to this report.
Copyright © 2010, Los Angeles Times
The Deficit
In reality, solving the deficit problem isn't all that hard. Here is how I solved it in the New York Times Deficit Reduction exercise at their website. Take a whack at it yourself.
Budget Puzzle: You Fix the Budget
Today, you’re in charge of the nation’s finances. Some of your options have more short-term savings and some have more long-term savings. When you have closed the budget gaps for both 2015 and 2030, you are done. Make your own plan, then share it online.
Related Article | Behind The Times’s Deficit Project | Printable PDF Version | Room for Debate: 16 Ways to Cut the Deficit
You solved the deficit!
Domestic programs and foreign aid Projected Savings to Deficit in:
2015 2030
Cut foreign aid in half
At a time when the United States is facing large deficits, some budget analysts argue that the country should significantly reduce the money it spends helping other countries. Others say that foreign aid already represents a smaller share of the budget here than in other rich countries and that it expands American influence.
$17 billion $17 billion
Eliminate earmarks
Earmarks are lawmaker-directed spending items, often to finance local projects favored by a member of Congress.
$14 billion $14 billion
Eliminate farm subsidies
Many economists argue that farm subsidies distort the workings of the market and largely flow to big agricultural businesses. As the Congressional Budget Office has noted, advocates of reducing the subsidies argue that doing so “could help small farms indirectly, slowing the rate” of consolidation. Supporters argue that the subsidies help preserve the American agriculture industry.
$14 billion $14 billion
Cut pay of civilian federal workers by 5 percent
“During the Great Recession, most private-sector employees have seen their wages frozen, and some have even watched wages decline,” the chairmen of the deficit panel wrote. “In contrast, federal workers have seen their wages increase.” This option would be a one-time 5 percent cut in federal civilian workers’ pay; the chairmen called for a three-year freeze on pay, which would have a similar effect.
$14 billion $17 billion
Reduce the federal workforce by 10 percent
This proposal would reduce the size of the federal work force by 200,000, from its current level of more than 2 million. The chairmen of the fiscal commission noted that the federal work force peaked at about 2.3 million in the late 1960s and fell to a low of 1.8 million in 2000. “Under this proposal, the government could hire two new workers for every three who leave service,” the chairmen said. The proposal would not take effect until 2012.
$12 billion $15 billion
Cut 250,000 government contractors
In the past decade, both the number of federal employees and the number of contractors rose. Recent estimates suggest that contractors outnumber federal employees by millions. The chairmen wrote, “While contractors provide useful services — sometimes at a lower cost than the federal government — their numbers are simply too high in light of the current budget deficit.”
$17 billion $17 billion
Other cuts to the federal government
The chairmen called for a series of smaller cuts, including eliminating some agencies, cutting research funds for fossil fuels, reducing funds for the Smithsonian and the National Park Service, eliminating certain regional subsidies, and eliminating the Office of Safe and Drug-Free Schools.
$30 billion $30 billion
Cut aid to states by 5 percent
In the past decade, even before the stimulus bill, state aid rose significantly, as a share of the economy. In 2005, it equaled 3.4 percent of gross domestic product, compared with 2.3 percent in 1990 and 3.3 percent in 1980. Cutting state aid, advocates say, would persuade states to spend more efficiently and reduce waste. Opponents worry about the effects on education, poverty and public safety.
$29 billion $42 billion
Military Projected Savings to Deficit in:
2015 2030
Reduce nuclear arsenal and space spending
Would reduce number of nuclear warheads to 1,050, from 1,968. Would also reduce the number of Minuteman missiles and funding for nuclear research and development, missile development and space-based missile defense.
$19 billion $38 billion
Reduce military to pre-Iraq War size and further reduce troops in Asia and Europe
“This option,” according to the bipartisan Sustainable Defense Task Force, “would cap routine U.S. military presence in Europe and Asia at 100,000 personnel, which is 26 percent below the current level and 33 percent below the level planned for the future. All told, 50,000 personnel would be withdrawn.” The option would also reduce the standing size of the military as the wars in Iraq and Afghanistan wind down.
$25 billion $49 billion
Reduce Navy and Air Force fleets
Under this option, the Navy would build 48 fewer ships and retire 37 more ships than now scheduled. Overall, the battle fleet would shrink to 230 ships, from 286. In addition, the Air Force would retire two tactical fighter wings and reduce the number of fighter jets it planned to purchase.
$19 billion $24 billion
Cancel or delay some weapons programs
This option would cancel the purchase of some expensive equipment, like the F35 fighter jet and MV-22 Osprey, with less expensive equipment that the bipartisan Sustainable Defense Task Force judged to have similar capability. It would delay other purchases. Research and development spending, which the task force considered a relic of the cold war arms race, would be reduced.
$19 billion $18 billion
Reduce noncombat military compensation and overhead
Would change health-care plan for veterans who had not been wounded in battle. Premiums, which have not risen in a decade, would rise. More veterans would receive health insurance from employer. This option would also take some benefits, like housing allowances, into account when tying military raises to civilian pay raises. Currently, increases in those benefits come on top of pay raises. The military would also reduce the length and frequency of combat tours. No unit or person will be sent to a combat zone for longer than a year, and they will not be sent back involuntarily without spending at least two years at home.
$23 billion $51 billion
Foreign troop levels: Choose one or none
Reduce the number of troops in Iraq and Afghanistan to 60,000 by 2015
Reduce the number of troops in Iraq and Afghanistan to 60,000 by 2015 Today, the United States military has 100,000 troops in Afghanistan and 50,000 in Iraq. The Obama Administration plans to reduce these numbers in coming years but has not specified troop levels. Defense and budget experts say this 60,000 option would be faster than what is now planned. The savings is the difference between the administration's projected spending and the spending under this option.
$51 billion $149 billion
Reduce the number of troops in Iraq and Afghanistan to 30,000 by 2013
Reducing troops by to 30,000 from 60,000 could save an additional $20 billion by 2030.
$86 billion $169 billion
Health care Projected Savings to Deficit in:
2015 2030
Enact medical malpractice reform
Many doctors believe so-called defensive medicine – ordering tests and procedures to avoid lawsuits – is a major reason health costs are so high. This option would begin to reduce the chances of large malpractice verdicts, and supporters believe, also reduce rising medical costs. Opponents say it could reduce doctors’ incentives to avoid errors. The savings estimate comes from the Congressional Budget Office.
$8 billion $13 billion
Medicare costs: Choose one or none
Increase the Medicare eligibility age to 68
Those who favor raising the eligibility age for Medicare often say that Americans are living longer and should work longer. And, some say, the new health-care bill will allow people in their late 60s without employer-provided insurance to buy a policy through an exchange. Opponents say that low-income workers have experienced the lowest increases in longevity, and they need Medicare the most.
$8 billion $56 billion
Increase the Medicare eligibility age to 70
This option would save nearly $50 billion more than increasing the age to 68 would.
$8 billion $104 billion
Reduce the tax break for employer-provided health insurance
This option would reduce the tax break for employer-provided health insurance, by slowly adjusting the cap, so that it increases at the rate of economic growth, rather than the growth in health costs – which tends to be significantly faster. Over time, more employer spending on health insurance would be taxed.
$41 billion $157 billion
Cap Medicare growth starting in 2013
This option would cap the Medicare growth at G.D.P. growth plus 1 percentage point, starting in 2013. Among other things, this would crack down on many hospitals and doctors with the highest costs.
$29 billion $562 billion
Social security Projected Savings to Deficit in:
2015 2030
Changing the retirement age: Choose one or none
Raise the Social Security retirement age to 68
The increase in longevity has caused some to favor higher eligibility ages for Social Security. This option would gradually raise the age from the currently planned 67 to 68. Supporters say that the change would go a long way toward fixing Social Security’s shortfall, by reducing benefits and by encouraging people to work (and thus pay payroll taxes) for longer. Opponents say that longevity increases have been smallest among low-income workers, who need Social Security the most.
$13 billion $71 billion
Raise the Social Security retirement age to 70
This option would gradually raise the age to 70, potentially saving an additional $175 billion.
$13 billion $247 billion
Reduce Social Security benefits for those with high incomes
“Currently, initial Social Security benefits are determined in a way that allows them to grow with economy-wide wage growth,” says the Committee for a Responsible Federal Budget, a private group in Washington. Under this option, workers below the 60th percentile of the lifetime earnings distribution would continue to have their retirement benefits grow over time with average wage increases. But the benefits of top earners would grow more slowly – with inflation – while benefits for workers just above the 60th percentile would grow at a rate between inflation and wage growth.
$6 billion $54 billion
Tighten eligibility for disability
The costs of the disability insurance program, which is administrated by the Social Security Administration, have been rising rapidly. This option would cut disability spending by 5 percent by focusing on states with the loosest standards. Supporters note that growing numbers of workers are classified as disabled, though the average job is less physically taxing. Opponents worry that injured or ill workers with few good job prospects would be harmed.
$9 billion $17 billion
Use an alternate measure for inflation
Some economists believe that the Consumer Price Index overstates inflation, giving Social Security recipients larger cost-of-living increases than necessary. This option would use a different, lower inflation measure both for Social Security and in the tax code (thus pushing more households into higher brackets over time). Supporters say the lower measure is more accurate. Opponents say it is less accurate for the elderly, who buy a different mix of goods and services than other households.
$21 billion $82 billion
Existing taxes Projected Savings to Deficit in:
2015 2030
Modifying estate taxes: choose one or none
The Lincoln-Kyl proposal
For the first time since early in the 20th century, there is no estate tax in 2010 – a feature of the 2001 Bush tax cut. (The tax is scheduled to return in 2011, but this exercise assumes the cut will continue.) A proposal by Senators Jon Kyl, an Arizona Republican, and Blanche Lincoln, an Arkansas Democrat, is the most moderate of the estate-tax options here. It would exempt the first $5 million from any taxable estate and index this level to inflation over time. Any estate value above $5 million would be taxed at a 35 percent rate.
$12 billion $20 billion
President Obama's proposal
President Obama's proposal is more agressive than Kyl-Lincoln, but would still cut the estate tax when compared to the Clinton years. The Obama plan would exempt the first $3.5 million from any taxable estate. Any estate above $3.5 million would be taxed at a 45 percent rate. These are the same provisions that applied in 2009, as part of the 2001 Bush tax cut.
$24 billion $45 billion
Return the estate tax to Clinton-era levels
Under President Bill Clinton, the estate tax exempted $1 million from any taxable estate. This level would not grow with inflation over time, subjecting more estates to the tax. The rate would start at 18 percent and climb to 55 percent, as it did in the 1990s. The 55 percent rate would begin at $3 million. If Congress takes no action, this would become law on Jan. 1, 2011.
$50 billion $104 billion
Investment taxes: Choose one or none
President Obama's proposal
Capital gains and dividends are now untaxed for couples with incomes below $68,000. For everyone else, the tax rate is 15 percent. This option, proposed by President Obama, would raise the rate to 20 percent for households making roughly $250,000 a year and above.
$10 billion $24 billion
Return rates to Clinton-era levels
This option would return rates to their level under President Bill Clinton: 10 percent on capital gains for low-income households and 20 percent for everyone else, while dividends would again be taxed at the same rate as ordinary income.
$32 billion $46 billion
The Bush Tax Cuts
Allow expiration for income above $250,000 a year
This option would allow the expiration, on Jan. 1, of the Bush tax cuts for the top 2 percent or so of households on the income distribution – those making $250,000 or more. On average, the change would equal about 2 percent of a given household’s pretax income.
$54 billion $115 billion
Allow expiration for income below $250,000 a year
This option would allow the expiration, on Jan. 1, of the Bush tax cuts for the bottom 98 percent or so of households on the income distribution – those making $250,000 or less. On average, the change would equal about 2 percent of a given household’s pretax income.
$172 billion $252 billion
Payroll tax: Subject some incomes above $106,000 to tax
When the payroll tax – which finances Social Security and Medicare – was created, it covered 90 percent of all income. Today, with a ceiling at $106,800, it covers closer to 80 percent. This option would gradually raise the ceiling, until 90 percent of income was again subject to the tax.
$50 billion $100 billion
New Taxes and Tax Reform Projected Savings to Deficit in:
2015 2030
Millionaire's tax on income above $1 million
Currently, the top tax brackets starts at about $375,000. In past decades, it started at much higher income level, after inflation is taken into account. This option – which the House passed last year but the Senate did not – would create a new 5.4 percent surtax on income above $1 million.
$50 billion $95 billion
Closing tax loopholes: choose one or none
Eliminate loopholes, reduce rates (Bowles-Simpson plan)
The deficit commission proposed a series of tax overhaul plans. Each one would reduce tax breaks for companies and individuals, while lowering tax rates. On the whole, the plans would raise revenue. One plan would cut all tax breaks other than the child and earned-income tax credits and those for mortgages, health and retirement benefits. The corporate tax would then be cut to 28 percent, from 35 percent, while individual tax rates would be cut for all brackets too.
$75 billion $175 billion
Eliminate loopholes, but keep taxes slightly higher
This option is the same as the previous one – except that tax rates would be cut less, raising more revenue to reduce the deficit.
$136 billion $315 billion
Reduce mortgage-interest deduction by converting to credit
The benefits of the mortgage-interest deduction (and several other tax breaks) flow mostly to high-income households – because they tend to have larger mortgages and have marginal income-tax rates. This option would reduce the value of some of those breaks to high-income households.
$25 billion $54 billion
National sales tax
Nearly every other rich country has a tax on consumption, also known as a value-added tax or national sales tax. This option would impose a 5 percent consumption tax, exempting education, housing and charitable giving.
$41 billion $281 billion
Carbon tax
This option would tax carbon emissions, starting at $23 per ton of CO2. The tax rate would increase at a constant annual rate of 5.8 percent, from 2012 through 2050.
$40 billion $71 billion
Bank Tax
This option would tax banks based on the size of their holdings and the perceived riskiness of those holdings. Larger, riskier banks would pay more tax, both to discourage them from taking big risks and to help cover the costs of future financial crises.
$73 billion $103 billion
Notes: These suggested cuts would need to be implemented gradually over the next 20 years, some taking effect well before 2030 in order to keep the deficit, and thus interest payments on the national debt, at a manageable level between now and 2030. All figures are adjusted for projected inflation and expressed in terms of 2010 dollars. The baseline for this exercise assumes that all current policies continue, even those scheduled to expire, like the Bush tax cuts.
Budget Puzzle: You Fix the Budget
Today, you’re in charge of the nation’s finances. Some of your options have more short-term savings and some have more long-term savings. When you have closed the budget gaps for both 2015 and 2030, you are done. Make your own plan, then share it online.
Related Article | Behind The Times’s Deficit Project | Printable PDF Version | Room for Debate: 16 Ways to Cut the Deficit
You solved the deficit!
Domestic programs and foreign aid Projected Savings to Deficit in:
2015 2030
Cut foreign aid in half
At a time when the United States is facing large deficits, some budget analysts argue that the country should significantly reduce the money it spends helping other countries. Others say that foreign aid already represents a smaller share of the budget here than in other rich countries and that it expands American influence.
$17 billion $17 billion
Eliminate earmarks
Earmarks are lawmaker-directed spending items, often to finance local projects favored by a member of Congress.
$14 billion $14 billion
Eliminate farm subsidies
Many economists argue that farm subsidies distort the workings of the market and largely flow to big agricultural businesses. As the Congressional Budget Office has noted, advocates of reducing the subsidies argue that doing so “could help small farms indirectly, slowing the rate” of consolidation. Supporters argue that the subsidies help preserve the American agriculture industry.
$14 billion $14 billion
Cut pay of civilian federal workers by 5 percent
“During the Great Recession, most private-sector employees have seen their wages frozen, and some have even watched wages decline,” the chairmen of the deficit panel wrote. “In contrast, federal workers have seen their wages increase.” This option would be a one-time 5 percent cut in federal civilian workers’ pay; the chairmen called for a three-year freeze on pay, which would have a similar effect.
$14 billion $17 billion
Reduce the federal workforce by 10 percent
This proposal would reduce the size of the federal work force by 200,000, from its current level of more than 2 million. The chairmen of the fiscal commission noted that the federal work force peaked at about 2.3 million in the late 1960s and fell to a low of 1.8 million in 2000. “Under this proposal, the government could hire two new workers for every three who leave service,” the chairmen said. The proposal would not take effect until 2012.
$12 billion $15 billion
Cut 250,000 government contractors
In the past decade, both the number of federal employees and the number of contractors rose. Recent estimates suggest that contractors outnumber federal employees by millions. The chairmen wrote, “While contractors provide useful services — sometimes at a lower cost than the federal government — their numbers are simply too high in light of the current budget deficit.”
$17 billion $17 billion
Other cuts to the federal government
The chairmen called for a series of smaller cuts, including eliminating some agencies, cutting research funds for fossil fuels, reducing funds for the Smithsonian and the National Park Service, eliminating certain regional subsidies, and eliminating the Office of Safe and Drug-Free Schools.
$30 billion $30 billion
Cut aid to states by 5 percent
In the past decade, even before the stimulus bill, state aid rose significantly, as a share of the economy. In 2005, it equaled 3.4 percent of gross domestic product, compared with 2.3 percent in 1990 and 3.3 percent in 1980. Cutting state aid, advocates say, would persuade states to spend more efficiently and reduce waste. Opponents worry about the effects on education, poverty and public safety.
$29 billion $42 billion
Military Projected Savings to Deficit in:
2015 2030
Reduce nuclear arsenal and space spending
Would reduce number of nuclear warheads to 1,050, from 1,968. Would also reduce the number of Minuteman missiles and funding for nuclear research and development, missile development and space-based missile defense.
$19 billion $38 billion
Reduce military to pre-Iraq War size and further reduce troops in Asia and Europe
“This option,” according to the bipartisan Sustainable Defense Task Force, “would cap routine U.S. military presence in Europe and Asia at 100,000 personnel, which is 26 percent below the current level and 33 percent below the level planned for the future. All told, 50,000 personnel would be withdrawn.” The option would also reduce the standing size of the military as the wars in Iraq and Afghanistan wind down.
$25 billion $49 billion
Reduce Navy and Air Force fleets
Under this option, the Navy would build 48 fewer ships and retire 37 more ships than now scheduled. Overall, the battle fleet would shrink to 230 ships, from 286. In addition, the Air Force would retire two tactical fighter wings and reduce the number of fighter jets it planned to purchase.
$19 billion $24 billion
Cancel or delay some weapons programs
This option would cancel the purchase of some expensive equipment, like the F35 fighter jet and MV-22 Osprey, with less expensive equipment that the bipartisan Sustainable Defense Task Force judged to have similar capability. It would delay other purchases. Research and development spending, which the task force considered a relic of the cold war arms race, would be reduced.
$19 billion $18 billion
Reduce noncombat military compensation and overhead
Would change health-care plan for veterans who had not been wounded in battle. Premiums, which have not risen in a decade, would rise. More veterans would receive health insurance from employer. This option would also take some benefits, like housing allowances, into account when tying military raises to civilian pay raises. Currently, increases in those benefits come on top of pay raises. The military would also reduce the length and frequency of combat tours. No unit or person will be sent to a combat zone for longer than a year, and they will not be sent back involuntarily without spending at least two years at home.
$23 billion $51 billion
Foreign troop levels: Choose one or none
Reduce the number of troops in Iraq and Afghanistan to 60,000 by 2015
Reduce the number of troops in Iraq and Afghanistan to 60,000 by 2015 Today, the United States military has 100,000 troops in Afghanistan and 50,000 in Iraq. The Obama Administration plans to reduce these numbers in coming years but has not specified troop levels. Defense and budget experts say this 60,000 option would be faster than what is now planned. The savings is the difference between the administration's projected spending and the spending under this option.
$51 billion $149 billion
Reduce the number of troops in Iraq and Afghanistan to 30,000 by 2013
Reducing troops by to 30,000 from 60,000 could save an additional $20 billion by 2030.
$86 billion $169 billion
Health care Projected Savings to Deficit in:
2015 2030
Enact medical malpractice reform
Many doctors believe so-called defensive medicine – ordering tests and procedures to avoid lawsuits – is a major reason health costs are so high. This option would begin to reduce the chances of large malpractice verdicts, and supporters believe, also reduce rising medical costs. Opponents say it could reduce doctors’ incentives to avoid errors. The savings estimate comes from the Congressional Budget Office.
$8 billion $13 billion
Medicare costs: Choose one or none
Increase the Medicare eligibility age to 68
Those who favor raising the eligibility age for Medicare often say that Americans are living longer and should work longer. And, some say, the new health-care bill will allow people in their late 60s without employer-provided insurance to buy a policy through an exchange. Opponents say that low-income workers have experienced the lowest increases in longevity, and they need Medicare the most.
$8 billion $56 billion
Increase the Medicare eligibility age to 70
This option would save nearly $50 billion more than increasing the age to 68 would.
$8 billion $104 billion
Reduce the tax break for employer-provided health insurance
This option would reduce the tax break for employer-provided health insurance, by slowly adjusting the cap, so that it increases at the rate of economic growth, rather than the growth in health costs – which tends to be significantly faster. Over time, more employer spending on health insurance would be taxed.
$41 billion $157 billion
Cap Medicare growth starting in 2013
This option would cap the Medicare growth at G.D.P. growth plus 1 percentage point, starting in 2013. Among other things, this would crack down on many hospitals and doctors with the highest costs.
$29 billion $562 billion
Social security Projected Savings to Deficit in:
2015 2030
Changing the retirement age: Choose one or none
Raise the Social Security retirement age to 68
The increase in longevity has caused some to favor higher eligibility ages for Social Security. This option would gradually raise the age from the currently planned 67 to 68. Supporters say that the change would go a long way toward fixing Social Security’s shortfall, by reducing benefits and by encouraging people to work (and thus pay payroll taxes) for longer. Opponents say that longevity increases have been smallest among low-income workers, who need Social Security the most.
$13 billion $71 billion
Raise the Social Security retirement age to 70
This option would gradually raise the age to 70, potentially saving an additional $175 billion.
$13 billion $247 billion
Reduce Social Security benefits for those with high incomes
“Currently, initial Social Security benefits are determined in a way that allows them to grow with economy-wide wage growth,” says the Committee for a Responsible Federal Budget, a private group in Washington. Under this option, workers below the 60th percentile of the lifetime earnings distribution would continue to have their retirement benefits grow over time with average wage increases. But the benefits of top earners would grow more slowly – with inflation – while benefits for workers just above the 60th percentile would grow at a rate between inflation and wage growth.
$6 billion $54 billion
Tighten eligibility for disability
The costs of the disability insurance program, which is administrated by the Social Security Administration, have been rising rapidly. This option would cut disability spending by 5 percent by focusing on states with the loosest standards. Supporters note that growing numbers of workers are classified as disabled, though the average job is less physically taxing. Opponents worry that injured or ill workers with few good job prospects would be harmed.
$9 billion $17 billion
Use an alternate measure for inflation
Some economists believe that the Consumer Price Index overstates inflation, giving Social Security recipients larger cost-of-living increases than necessary. This option would use a different, lower inflation measure both for Social Security and in the tax code (thus pushing more households into higher brackets over time). Supporters say the lower measure is more accurate. Opponents say it is less accurate for the elderly, who buy a different mix of goods and services than other households.
$21 billion $82 billion
Existing taxes Projected Savings to Deficit in:
2015 2030
Modifying estate taxes: choose one or none
The Lincoln-Kyl proposal
For the first time since early in the 20th century, there is no estate tax in 2010 – a feature of the 2001 Bush tax cut. (The tax is scheduled to return in 2011, but this exercise assumes the cut will continue.) A proposal by Senators Jon Kyl, an Arizona Republican, and Blanche Lincoln, an Arkansas Democrat, is the most moderate of the estate-tax options here. It would exempt the first $5 million from any taxable estate and index this level to inflation over time. Any estate value above $5 million would be taxed at a 35 percent rate.
$12 billion $20 billion
President Obama's proposal
President Obama's proposal is more agressive than Kyl-Lincoln, but would still cut the estate tax when compared to the Clinton years. The Obama plan would exempt the first $3.5 million from any taxable estate. Any estate above $3.5 million would be taxed at a 45 percent rate. These are the same provisions that applied in 2009, as part of the 2001 Bush tax cut.
$24 billion $45 billion
Return the estate tax to Clinton-era levels
Under President Bill Clinton, the estate tax exempted $1 million from any taxable estate. This level would not grow with inflation over time, subjecting more estates to the tax. The rate would start at 18 percent and climb to 55 percent, as it did in the 1990s. The 55 percent rate would begin at $3 million. If Congress takes no action, this would become law on Jan. 1, 2011.
$50 billion $104 billion
Investment taxes: Choose one or none
President Obama's proposal
Capital gains and dividends are now untaxed for couples with incomes below $68,000. For everyone else, the tax rate is 15 percent. This option, proposed by President Obama, would raise the rate to 20 percent for households making roughly $250,000 a year and above.
$10 billion $24 billion
Return rates to Clinton-era levels
This option would return rates to their level under President Bill Clinton: 10 percent on capital gains for low-income households and 20 percent for everyone else, while dividends would again be taxed at the same rate as ordinary income.
$32 billion $46 billion
The Bush Tax Cuts
Allow expiration for income above $250,000 a year
This option would allow the expiration, on Jan. 1, of the Bush tax cuts for the top 2 percent or so of households on the income distribution – those making $250,000 or more. On average, the change would equal about 2 percent of a given household’s pretax income.
$54 billion $115 billion
Allow expiration for income below $250,000 a year
This option would allow the expiration, on Jan. 1, of the Bush tax cuts for the bottom 98 percent or so of households on the income distribution – those making $250,000 or less. On average, the change would equal about 2 percent of a given household’s pretax income.
$172 billion $252 billion
Payroll tax: Subject some incomes above $106,000 to tax
When the payroll tax – which finances Social Security and Medicare – was created, it covered 90 percent of all income. Today, with a ceiling at $106,800, it covers closer to 80 percent. This option would gradually raise the ceiling, until 90 percent of income was again subject to the tax.
$50 billion $100 billion
New Taxes and Tax Reform Projected Savings to Deficit in:
2015 2030
Millionaire's tax on income above $1 million
Currently, the top tax brackets starts at about $375,000. In past decades, it started at much higher income level, after inflation is taken into account. This option – which the House passed last year but the Senate did not – would create a new 5.4 percent surtax on income above $1 million.
$50 billion $95 billion
Closing tax loopholes: choose one or none
Eliminate loopholes, reduce rates (Bowles-Simpson plan)
The deficit commission proposed a series of tax overhaul plans. Each one would reduce tax breaks for companies and individuals, while lowering tax rates. On the whole, the plans would raise revenue. One plan would cut all tax breaks other than the child and earned-income tax credits and those for mortgages, health and retirement benefits. The corporate tax would then be cut to 28 percent, from 35 percent, while individual tax rates would be cut for all brackets too.
$75 billion $175 billion
Eliminate loopholes, but keep taxes slightly higher
This option is the same as the previous one – except that tax rates would be cut less, raising more revenue to reduce the deficit.
$136 billion $315 billion
Reduce mortgage-interest deduction by converting to credit
The benefits of the mortgage-interest deduction (and several other tax breaks) flow mostly to high-income households – because they tend to have larger mortgages and have marginal income-tax rates. This option would reduce the value of some of those breaks to high-income households.
$25 billion $54 billion
National sales tax
Nearly every other rich country has a tax on consumption, also known as a value-added tax or national sales tax. This option would impose a 5 percent consumption tax, exempting education, housing and charitable giving.
$41 billion $281 billion
Carbon tax
This option would tax carbon emissions, starting at $23 per ton of CO2. The tax rate would increase at a constant annual rate of 5.8 percent, from 2012 through 2050.
$40 billion $71 billion
Bank Tax
This option would tax banks based on the size of their holdings and the perceived riskiness of those holdings. Larger, riskier banks would pay more tax, both to discourage them from taking big risks and to help cover the costs of future financial crises.
$73 billion $103 billion
Notes: These suggested cuts would need to be implemented gradually over the next 20 years, some taking effect well before 2030 in order to keep the deficit, and thus interest payments on the national debt, at a manageable level between now and 2030. All figures are adjusted for projected inflation and expressed in terms of 2010 dollars. The baseline for this exercise assumes that all current policies continue, even those scheduled to expire, like the Bush tax cuts.
Sunday, November 14, 2010
More on income inequality
As you listen to the endless blah, blah, blah about Bush's tax cuts and what to do about them, here is one fact you should bear in mind. In 1976, the top 1% of all income earners took in just less than 9% of the total U.S. income. In 2007, the top 1% took in 23.5% of the total income. Virtually all of the growth came from tax laws and exclusions.
If you want more details, see Frank Rich's column, "Who Will Stand Up to the Superrich?" in today's New York Times.
If you want more details, see Frank Rich's column, "Who Will Stand Up to the Superrich?" in today's New York Times.
Wednesday, November 10, 2010
Obesity among young people
In an earlier Report on a Road Trip, we commented on the incredible number of obese people that we saw along the road. Particularly heart rending were all the young people who are destined to lead miserable lives. Today's Los Angeles Times provides a narrative and the numbers that go along with that story. When you finish reading the article, remember that Obamacare does absolutely nothing to stop this runaway horror story.
latimes.com
Obesity often follows the young into adulthood
People who were obese between the ages of 12 and 21 are seven times more likely than normal-weight or overweight peers to develop severe obesity by the time they reach their late 20s to early 30s, a study finds.
By Melissa Healy, Los Angeles Times
5:00 PM PST, November 9, 2010
Advertisement
Click here to find out more!
Some adolescent memories — prom dates, fashion choices, Facebook postings — tend to fade and, mercifully, disappear in the transition to adulthood. But a study released Tuesday finds that one increasingly common source of teen angst — obesity — has a cruel knack for following adolescents into their adult years, then tightening its grip.
The result not only confers profound health risks for teens whose excess weight follows them and accelerates into adulthood, it also spells a looming public health disaster in a country where almost 1 in 5 adolescents is obese, experts say.
By the time they reach their late 20s to early 30s, people who were obese between 12 and 21 are more than seven times more likely than normal-weight or overweight peers to develop severe obesity — defined as having a body mass index, or BMI, of 40 or more — according to the study published in the Journal of the American Medical Assn.
For women and for ethnic minorities, the likelihood of proceeding from adolescent obesity to adult severe obesity is particularly pronounced. Among women, 51.3% of those who had been obese when they were younger became severely obese adults (for men, the figure was 37.1%). Among African American women, 52.4% who had been obese in earlier years went on to become severely obese.
By comparison, 7.9% of all participants in the study, and less than 5% of those whose weight was in the normal range, became severely obese in adulthood.
The authors, epidemiologists based in North Carolina, estimated from their findings that 1 million Americans who were between the ages of 12 and 21 in 1996, when the study began, became severely obese adults. As they did so, they took on the increased risk of developing obesity-related conditions such as cardiovascular disease, Type 2 diabetes, certain cancers and musculoskeletal pain.
The report comes against the backdrop of evidence that the ranks of the severely obese — typically, those who carry at least 80 to 100 pounds of excess body weight — are rising faster in the U.S. population than those classified as moderately obese. Given the scarcity of solutions — drugs and diet-and-exercise interventions have proved less safe and effective than experts had hoped — the authors note that "prevention is critical."
For those already obese, the authors said, it is important to identify those at greatest risk of becoming severely obese and focusing weight-loss programs on them.
The investigation tracked 8,834 participants ages 12-21 at the study's start for 13 years. Because of the long follow-up, the study provides a clearer picture than most of obesity's progression in individuals of different genders, ages and ethnicities, said lead author Penny Gordon-Larsen, an epidemiologist with the Carolina Population Center at the University of North Carolina.
In particular, the findings underline that for children who struggle with their weight, the transition to adulthood can be a particularly perilous crossing, Gordon-Larsen said.
Obese teens increasingly are steered toward riskier measures to avert future health problems, including bariatric surgery — a weight-loss intervention that grew sevenfold among teens between 2005 and 2007, according to a recent report. The authors of the JAMA study suggested such surgery may be justified because it "is the only treatment to have long-term success," albeit with "major potential complications."
Pediatric endocrinologist David S. Ludwig, director of Children's Hospital Boston's Optimal Weight for Life program, said the JAMA study emphasized the "critical importance" of treating childhood obesity early, before poor lifestyle habits can become deeply ingrained. Early obesity also "may produce changes in metabolism, hormones or the brain that oppose weight loss," Ludwig added.
At the same time, some experts in weight management across the lifespan said the study's usefulness was limited by its reliance on the BMI as the primary measure of an individual's healthful weight.
"I'm not a big fan of BMI, especially for kids," said Dr. David Heber, director of UCLA's Risk Factor Obesity Program. A rough measure of fat based on an individual's height and weight, the BMI can be useful for detecting population trends, but is often not the best measure of an individual adolescent's fitness or prospects of developing obesity-related health conditions, he said.
Instead, Heber prefers to measure an adolescent's fat and lean-muscle mass and calculate their relative proportions. "They'll tell you what your target weight should be," he said.
melissa.healy@latimes.com
Copyright © 2010, Los Angeles Times
latimes.com
Obesity often follows the young into adulthood
People who were obese between the ages of 12 and 21 are seven times more likely than normal-weight or overweight peers to develop severe obesity by the time they reach their late 20s to early 30s, a study finds.
By Melissa Healy, Los Angeles Times
5:00 PM PST, November 9, 2010
Advertisement
Click here to find out more!
Some adolescent memories — prom dates, fashion choices, Facebook postings — tend to fade and, mercifully, disappear in the transition to adulthood. But a study released Tuesday finds that one increasingly common source of teen angst — obesity — has a cruel knack for following adolescents into their adult years, then tightening its grip.
The result not only confers profound health risks for teens whose excess weight follows them and accelerates into adulthood, it also spells a looming public health disaster in a country where almost 1 in 5 adolescents is obese, experts say.
By the time they reach their late 20s to early 30s, people who were obese between 12 and 21 are more than seven times more likely than normal-weight or overweight peers to develop severe obesity — defined as having a body mass index, or BMI, of 40 or more — according to the study published in the Journal of the American Medical Assn.
For women and for ethnic minorities, the likelihood of proceeding from adolescent obesity to adult severe obesity is particularly pronounced. Among women, 51.3% of those who had been obese when they were younger became severely obese adults (for men, the figure was 37.1%). Among African American women, 52.4% who had been obese in earlier years went on to become severely obese.
By comparison, 7.9% of all participants in the study, and less than 5% of those whose weight was in the normal range, became severely obese in adulthood.
The authors, epidemiologists based in North Carolina, estimated from their findings that 1 million Americans who were between the ages of 12 and 21 in 1996, when the study began, became severely obese adults. As they did so, they took on the increased risk of developing obesity-related conditions such as cardiovascular disease, Type 2 diabetes, certain cancers and musculoskeletal pain.
The report comes against the backdrop of evidence that the ranks of the severely obese — typically, those who carry at least 80 to 100 pounds of excess body weight — are rising faster in the U.S. population than those classified as moderately obese. Given the scarcity of solutions — drugs and diet-and-exercise interventions have proved less safe and effective than experts had hoped — the authors note that "prevention is critical."
For those already obese, the authors said, it is important to identify those at greatest risk of becoming severely obese and focusing weight-loss programs on them.
The investigation tracked 8,834 participants ages 12-21 at the study's start for 13 years. Because of the long follow-up, the study provides a clearer picture than most of obesity's progression in individuals of different genders, ages and ethnicities, said lead author Penny Gordon-Larsen, an epidemiologist with the Carolina Population Center at the University of North Carolina.
In particular, the findings underline that for children who struggle with their weight, the transition to adulthood can be a particularly perilous crossing, Gordon-Larsen said.
Obese teens increasingly are steered toward riskier measures to avert future health problems, including bariatric surgery — a weight-loss intervention that grew sevenfold among teens between 2005 and 2007, according to a recent report. The authors of the JAMA study suggested such surgery may be justified because it "is the only treatment to have long-term success," albeit with "major potential complications."
Pediatric endocrinologist David S. Ludwig, director of Children's Hospital Boston's Optimal Weight for Life program, said the JAMA study emphasized the "critical importance" of treating childhood obesity early, before poor lifestyle habits can become deeply ingrained. Early obesity also "may produce changes in metabolism, hormones or the brain that oppose weight loss," Ludwig added.
At the same time, some experts in weight management across the lifespan said the study's usefulness was limited by its reliance on the BMI as the primary measure of an individual's healthful weight.
"I'm not a big fan of BMI, especially for kids," said Dr. David Heber, director of UCLA's Risk Factor Obesity Program. A rough measure of fat based on an individual's height and weight, the BMI can be useful for detecting population trends, but is often not the best measure of an individual adolescent's fitness or prospects of developing obesity-related health conditions, he said.
Instead, Heber prefers to measure an adolescent's fat and lean-muscle mass and calculate their relative proportions. "They'll tell you what your target weight should be," he said.
melissa.healy@latimes.com
Copyright © 2010, Los Angeles Times
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