‘Foong on Finance’ with Keat Foong: 1 for 3
- Jul 22, 2011
President Obama has placed social security and Medicare on the table. He and the Republicans reportedly have plans to curtail social security (which does not contribute to the federal deficit), Medicare and Medicaid, all support programs for the middle class and/or the poor.
Will President Obama be known as the Democratic president who succeeded with these radical plans (more than $3 trillion in cuts) to begin to claw back social support programs that even Republican presidents have not had the audacity to touch before?
In exchange, so that this arrangement not be too one sided, the plan is to raise some taxes on high income earners. ($1 trillion in revenue raisers versus the $3 trillion in cuts, reportedly the preferred option.)
We have seen this play, and this formula being put to use, at least once before: eg., in exchange for extending unemployment benefits, the Bush tax cuts were extended and contributions to social security were reduced by 30 percent under the Obama tax cut package. So will President Obama be successful with the agenda? Based on his record, very likely?
Not to worry, the 15 percent tax rate on capital gains is probably sacrosanct. Meanwhile, even more purchasing power may be lost by the consuming masses—many of them, I know first hand, who are already living from hand to mouth.