Nel's New Day

January 18, 2013

A Letter about Entitlements to Rep. Kurt Schrader

Filed under: Uncategorized — trp2011 @ 7:49 PM
Tags: , , , ,

Last week I wrote a letter to Rep. Kurt Schrader (R-OR) indicating my distress regarding his repeating myths that guns don’t kill people. In addition to this statement, he wrote an op-ed for The Oregonian asking people to “demand the [House] members agree to $800 billion in entitlement reform.” When he said “$800 billion,” I’m guessing that he means over a decade, which means $80 billion per year.

Here is my response to Rep. Schrader:

Cutting entitlements might help reduce the deficit so I am providing some suggestions about the ones that I would “demand” the House members to eliminate.

First, the House should do away for the following entitlements that they passed in the “fiscal cliff” bill: NASCAR, $43 million over two years; railroads, $165 million a year; movies, $150 million for two years; mining companies; Goldman Sachs Headquarters “tax exempt financing,” $1.6 billion; off-shore loophole for banks; $9 billion; foreign subsidiaries, over $750,000 million a year; and bonus depreciation, R&D Tax Credit, $110 billion for two years. I’m sure that there are far more than these, but these are the ones that I could easily find. Just these would take care of the $800 billion that you want to cut.

If that isn’t enough, however, here are some other entitlements that could be cut: tax financial transactions, $100 billion a year; tax preference for capital gains and dividends, $80 billion per year; no progressive estate tax on large fortunes, $40-60 billion per year; overseas tax havens, $100 billion per year, and subsidies for excessive executive compensation, $18 billion per year.

Another way to save money is the Public Option Deficit Reduction Act, allowing consumers to opt into a government-run health insurance plan in the Obamacare exchanges. This could save up to $100 billion over the next decade. Passing the Dream Act could cut the deficit by $2 billion, and a cap-and-trade policy would be another $20 billion. That’s another $12+ billion.

Taking care of the following entitlements can save you $6 trillion in ten years—much more than just $800 billion: close multiple loopholes in the capital gains law, $174.2 billion; eliminate the capital gains altogether, $900 billion; reduce the “non-defense expenditures” for U.S. overseas military bases and other military perks by 20 percent, $200 billion; allow the government to negotiate with drug companies, $220 billion; enact DoD-friendly cuts to military budget, $519 billion; enact Rep. Jan Schakowsky’s “Fairness in Taxation Act” for very high earners, $872.5 billion; eliminate corporate tax loopholes, $1.24 trillion; and create a financial transactions tax for high-volume Wall Street trading, $1.8 trillion.

Huge entitlements go to the oil industry. It’s the most profitable industry in history, on track to make profits of over $100 billion in 2012. Yet we taxpayers will still give the industry $40 billion in tax giveaways over the next ten years unless you change this. They’ve been racking in tax money for almost 100 years and will continue for another 100 if you don’t change this. U.S. corporations have increased their after-tax profits by 171 percent during the past four years; they can afford to pay more than the minimal taxes—sometimes under five percent—that they do now.

Rep. Schrader, I’m guessing that you don’t consider Social Security as an “entitlement” because it has nothing to do with budget deficits. Law demands that all SS money comes from its trust fund which has been in surplus for almost two decades because of contributions. The only “deficit” is when the trust fund collects on the government IOUs, but I’m sure you agree that the government should pay its debts.

In case you do consider SS an “entitlement,” please remember that benefits are already meager for most SS recipients. The median income for people over 65 in the U.S. is less than $20,000. I’m sure that you understand how little this is for an annual salary because you make at least eight times as much. Almost 70 percent of people depend on SS for half of their income, and the average SS benefit is less than $15,000 a year.

You might think that Medicare is another “entitlement,” but people also pay into that account. The answer is not to deny people Medicare funds but to do something about the exorbitant cost of health care in the United States. This country already spends almost 18 percent of our entire economy on health care compared to an average of 9.6 percent in all other wealthy countries. Paying double, however, doesn’t make people in the U.S. healthier. In fact, the life expectancy at birth (78.2) in this nation is shorter than other rich countries (averaging 79.5 years), and the infant mortality (6.5 deaths per 1000 live births) is almost 50 percent higher than theirs (4.4).

Computers with patient records cannot share data, resulting in costly errors as this information has to be reentered. And insurance companies make lots of money because doctors and hospitals have to collect from the insurers who get paid for collecting from policy holders. A major occupational category at most hospitals is “billing clerk,” and a third of nursing hours are devoted to documenting what’s happened so insurers have proof. Cutting Medicare and Medicaid costs won’t stop this; it just ends up in less care. Medicare’s administrative costs are about 3 percent, well below the 5 to 10 percent in large self-insuring companies—and much lower than the 25 to 27 percent of premiums. That 3 percent is far below the 11-percent costs of private plans under Medicare Advantage.

Healthcare costs would be further contained if Medicare and Medicaid could use their huge bargaining leverage over healthcare providers to shift away from a “fee-for-the-most-costly-service” system to a system focused on achieving healthy outcomes.

I realize that you are proud of being a part of the disappearing Blue Dog caucus and part of the new No Labels coalition to reform Washington. I ask you to use the coalition to deny ALEC laws and support the people in the nation who make less than $250,000 by eliminating the entitlements for the wealthy, the drug and insurance companies, other corporations like the oil industry, and the defense bloat. Don’t let the GOP continue to pay out these entitlements.

Please support your constituents instead of the conservative GOP who wants to make the poor and middle class suffer while increasing the wealth of the rich and the corporations.

2 Comments »

  1. I hope he reads this.. Thanks for laying it out for him.

    Like

    Comment by lynchly — January 19, 2013 @ 12:37 AM | Reply

  2. EXCELLENT letter, Nel! You were SO restrained but so direct at the same time. Great that you were able to give him very specific suggestions where REAL cuts could be made. THANKS for speaking up for so many of us!

    Like

    Comment by jstjohn1 — January 18, 2013 @ 8:05 PM | Reply


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