The Coburn Deficit Reduction Plan
Here it is, Tom Coburn's "Back in Black" deficit reduction plan. Some highlights:
- $8 trillion in budget cuts over the next ten years
- $1 trillion in additional revenue from tax reform. No tax rates are increased.
- $1 trillion in defense budget cuts.
- A Social Security reform package that increases the full retirement age to age 70.
For more highlights, see this document.
Overall, I like it. I would certainly be happy with an 8-1 ratio of spending reduction to revenue increases - especially when these "revenue increases" come in the form of eliminating tax breaks for special interest groups (like $1 billion in tax breaks for Hollywood movie producers). The Ryan plan only produces about half of those savings during that time frame.
Remember - a $9 trillion improvement in the budget outlook amounts to roughly $9 trillion in lower future taxes for ourselves, our kids and grand kids. I'll take it.
Mr. President, what say you?
[Update]
ATR is throwing a tantrum.The headline reads - "Tom Coburn proposes $1 trillion tax hike plan."
It should read, "Tom Coburn proposes plan that will reduce tax burden on American people by $8 trillion."
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Comments :
Jul '10
Re: The Coburn Deficit Reduction Plan
Sadly, ATR has it right. The way to raise revenues is to grow the economy, the way to grow the economy is to establish a stable business environment.
By definition, revenue increases by tax reform are tax increases. Closing loopholes is a tax increase just as much as raising rates, and CBO scoring reflects that. Republicans floating tax increases, however couched, is even scarier to the unemployed and barely employed than the usual leftist dim-wittery.
Just return to the 2007 baseline budget and work from there.
Dec '10
Re: The Coburn Deficit Reduction Plan
Hear, hear! Too much crap (read stimulus) has been cemented into the baseline through passing continuing resolutions rather than budgets. We must reset the baseline to the real baseline, or we will simply continue down the same path. We need a change of direction, not a slowing of our descent down the wrong path.
Edited on Jul 18, 2011 at 4:06pmOct '10
Re: The Coburn Deficit Reduction Plan
Yes, but not all tax increases are the same.
Sounds awesome. Not going to happen with this White House.
Edited on Jul 18, 2011 at 4:29pmJul '10
Re: The Coburn Deficit Reduction Plan
Todd
Yes, but not all tax increases are the same.
...
Never said they were, but none of them is a good idea in this economy. The key concept is "stable business environment." Geithner's war on the dollar has already weakened the draw of foreign investors to yankee investments, pouring further hate and disdain on already clobbered inner city work forces. Pelosi and Reid's Obamascare taxes alone would have a serious dampening effect.
Some people hope change permanently impedes American recovery.
May '10
Re: The Coburn Deficit Reduction Plan
Shouldn't we wait until the President commits us to another war effort before cutting Defense spending?
To see Republicans willing to play the shell game of "revenue increases" is just pathetic. Aren't these supposed to be the smart ones economically? Any effort to "increase revenues" other than by economic growth are short sighted and destined to cause more stagnation. It's not about government coffers, it's about the citizens of the United States being unable to prosper under an onerous government.
Go Coburn - demonstrating how Republicans snatch defeat from the jaws of victory each and every time. Seriously, Coburn can't just get behind the Ryan plan? Who did he coordinate this plan with as a consciencious party step forward? That must have been the party plan all along: "Let's huddle up and when I say go everybody run in different directions."
Apr '11
Re: The Coburn Deficit Reduction Plan
If the deal actually delivers 9 Trillion in cuts to 1 trillion in revenue I think that would be better then anything one can reasonably expect. I always favored the reworking of the Tax code to get rid of deductions and then lower rates. I feel that this would have been the best cover for every one, both republicans and democrats. Since it allows republicans to lower rates and simplify the tax code, while it gives the democrats as chance to readjust revenue collection to target the income brackets they want to target the most.
Let us be realistic though, there will have to be revenue increases aside from just those generated by economic growth, if we hope to pay down the debt sooner rather then later. You can not hope to make the defense budget which is like 500billion immune to cuts either. I just hope that the cuts are focused on personnel and benefits rather then RnD and upgrading our equipment.
Also creating a stable and clear business environment will even if it means higher taxes will be better then the limbo we are in now. At least people will be able to plan better.
May '10
Re: The Coburn Deficit Reduction Plan
That is not realistic at all. To accept that because of poor spending policies we must shackel ourselves to higher taxes, or excuse me I meant to say "revenues", is the same as accepting the poor spending policies in the first place. It is allowing the two to be connected, and they are not.
Talking about "removing loopholes" is also maddening. If the home mortgage deduction is removed, home values in the nation will fall dramatically. While I am not a fan of government incentivizing a myriad of behaviors via tax deductions, once in place they must be carefully phased out and only in the best of times.
When you have spent yourself into debt, you don't go to your boss and insist your debt indicates a need for a raise. It's lunacy to say that we all need to tighten our belts and give more. We need to tighten our belts and expect less.
Aug '10
Re: The Coburn Deficit Reduction Plan
Alot of objective comment here, guess that means that there are very few self-identified republicans or democrats at Ricochet.
I would answer , if Gallup called, that I was not a member of the republican party at present. Years of party faithfulness has been erased by the blurred lines of philosophy one witnessed from Washington . I date my increasing dissatisfaction from our withdrawal from Baghdad and betrayal of the Iraqis who defied Saddam. March 91.
Tom Coburn has a clue, and it sounds good to this former GOP stalwart.
Sep '10
Re: The Coburn Deficit Reduction Plan
This was inevitable. They are changing the CPI in this plan so it understates inflation even more than it already does. This will cause social security transfer payments to be given to less people at less value over time. Most importantly though this will give the green light to QE3.
If you have any money in TIPS you are going to be screwed.
Edited on Jul 19, 2011 at 12:51pmMay '10
Re: The Coburn Deficit Reduction Plan
NO MORE TAXES.
This is insane!
Oct '10
Re: The Coburn Deficit Reduction Plan
Bryan G. Stephens: NO MORE TAXES.
This is insane! · Jul 19 at 1:02pm
An $8 trillion cut in spending is a tax cut.
May '10
Re: The Coburn Deficit Reduction Plan
Todd
Bryan G. Stephens: NO MORE TAXES.
This is insane! · Jul 19 at 1:02pm
An $8 trillion cut in spending is a tax cut. · Jul 19 at 1:18pm
No, it is not. Spending has nothing to do with taxes. A balanced budget amendment would force a relationship between the two, but there is not one at the moment.
Edited on Jul 19, 2011 at 1:44pmApr '11
Re: The Coburn Deficit Reduction Plan
The current front runner is the Gang of Six Plan.
“It (The Gang of Six plan) is “broadly consistent with the approach that I’ve urged,” (President0 Obama said.
Jul '11
Re: The Coburn Deficit Reduction Plan
I'm a fan.
Regarding the elimination of tax breaks, I'm all for it. Dr. Coburn makes a good case to show that these "tax breaks" are really special interest spending.
These "tax breaks" create a few problems. First, they create inherent inequalities in the tax code; company A pays a higher % of it's income to taxes than company B does. Second, it incentivizes businesses to make their money through lobbying than through activities that actually create wealth. Third, every new "tax break" is a step towards the kind of corporatism that has ruined once great companies (see GM).
I'm sympathetic to the argument that we should not be raising taxes in a down economy. However, it's becoming increasingly obvious that a deal with this president is impossible without revenue increases, and 8:1 looks dang good.
The good news is that republicans can accept revenue increases through tax reform without breaking their pledge of no tax increases. Remember that Paul Ryan's plan also called for tax reform which will cause some peoples taxes to go up.
-E
Sep '10
Re: The Coburn Deficit Reduction Plan
Todd
Sounds awesome. Not going to happen with this White House. · Jul 18 at 4:29pm
Edited on Jul 18 at 04:29 pm
You honestly believe Obama is going to sign on to $8 Trillion in real cuts over a decade?
Dec '10
Re: The Coburn Deficit Reduction Plan
CandE: I'm a fan.
Regarding the elimination of tax breaks, I'm all for it. Dr. Coburn makes a good case to show that these "tax breaks" are really special interest spending...
You said everything I wanted to say but better than I would have said it. I am all about this plan.
Jul '11
Re: The Coburn Deficit Reduction Plan
Mark Belling Fan
Todd
Sounds awesome. Not going to happen with this White House. · Jul 18 at 4:29pm
Edited on Jul 18 at 04:29 pm
You honestly believe Obama is going to sign on to $8 Trillion in real cuts over a decade? · Jul 19 at 2:10pm
Maybe not $8 Trillion, but he's already praised the Gang of Six deal, which is a good start.
-E
Edited on Jul 19, 2011 at 2:21pmOct '10
Re: The Coburn Deficit Reduction Plan
If the historical spending-cut-to-revenue-raiser ratio is 0.6 to 1, and we have 8 trillion in cuts with 1 trillion in tax raises, 8 * 0.6 is 4.79, or five times the proposed tax increase. This is impossible in the Coburn plan.
Coburn has created room for Democratic sleazyness. No matter how hard they try, it isn't possible get from an 8-to-1 ratio down to a 0.6-to-1 ratio. If lowering it by 2.4 is all they can do, we'd still have a 5.6 to 1 ratio of spending cuts to tax increases. Even if they managed to double that, we'd still have a ratio of 3.2 to 1--a clear victory for us.
And I doubt they'd get that far.