By Steve Levy
Meeting the Federal Deficit ChallengeUploaded: Apr 9, 2011
Last night we met the small dollar and ideologically charged challenge of passing a federal budget for the 2010-11 budget year.
Now Americans face the challenge of meeting the tougher big dollar challenges of preventing high deficits and surging interest costs over the next two decades.
Two-thirds of the federal budget is in five categoies--Social Security and defense at aorund $750 billion, Medicare at $500 billion and Medicaid at $300 billion and interest at $200 billion.
Virtually ALL of the growth in the budget and projected deficits over the next decade are in Social Security, Medicare, Medicaid and interest. As the deficits persist, for example, interest payments surge from $200 billion to $900 billion.
Who favors having higher income residents contribute to reducing the deficit through a) raising the tax base that supports Social Security as we have for Medicare, b) increasing payments by higher income residents for part B Medicare benefits--a practice already started under George Bush, c) resinstating the reductions in exemption and dedcutions recently ended for 2010-12 and d) perhaps reducing benefits under Social Security and Medicare for higher income recipients?
As a lcoal example, who favors pension reform that makes the largest benefit reductions go for future higher income retirees as opposed to across the board benefit cuts?
Both of these approaches seem reasonable to me along with many other changes that will have to be made to balance future budgets.