Posted on 12/31/2024 8:36:05 PM PST by RandFan
President-elect Trump is headed for a battle over the debt limit with conservative lawmakers who are demanding steep cuts to federal spending that will significantly complicate Trump’s ability to pass his agenda next year.
Thirty-eight House Republicans sent a warning to Trump last week by rejecting his demand to extend the nation’s borrowing authority for two years, casting doubt on Trump’s influence over GOP conservatives.
Conservatives now say Trump will need to agree to deep cuts in spending if he wants their support for raising the debt limit in 2025.
“We’re about 33 percent overdrawn. We bring in about $4.8 trillion [in revenue] and spend $6.8 trillion [per year], so you got to get about $2 trillion worth of spending down,” Sen. Rand Paul (R-Ky.) said.
Paul hailed the defeat of Trump’s plan to raise the debt limit as part of a stopgap government funding measure. He said it shows the leverage fiscal hawks will have over the White House next year.
He said there are blocs of conservatives in both chambers who will insist on matching a debt limit increase with big spending cuts.
“That debate’s going to be ongoing. I for one am going to do what I can to make sure the debt ceiling becomes more important,” he said.
Paul called the defeat of Trump’s proposal to raise the debt limit without spending cuts “a good day for conservatives.”
(Excerpt) Read more at thehill.com ...
OMG. That is so wrong. The problem with the debt ceiling is it ties the hands of POTUS to make tax cuts of any kind. See, under the debt ceiling tax cuts must be "paid for" and that is wrong for two reasons: First reason is that taxes are our money, the concept of people keeping their money has to be "paid for" puts logic on it's head. Reason 2: Every tax cut has resulted int an increase in Federal revenue helping reduce deficits.
Get it? Do you understand?
Probably one PR disaster after another.
And say hello to President AOC on 2028
I hope DOGE is on track for cutting 2 trillion which would amount to about 95% of discretionary spending. We’ll see how interested Musk is when it doesn’t directly threaten his own interests.
You must be in better financial shape than most of us who paid into Social Security/Medicare for 40 plus years - your “plan” puts the Dems in charge in 4 years so they can finish us off.
DOGE is only about finding the low hanging fruit to make government more efficient and lower waste, fraud and abuse, not balancing the budget. Trump does need to listen to their recommendations, though. It isn’t up to him to decide where to “spare no expense” or whether to raise the debt limit or not.
I vote we cut aid to other countries first
first being Ukraine
if DOGE sheared away the Department of Redundancy that would close half of government
thank you
no drama and no falling for the flood of psychological warfare
Doge is something of a Dodge.
The assault on excess spending is actually a direct attack on the House of Representatives. By using prominent and extremely successful businessmen to mount the attack, the President is removed from the blame directed toward very specific individuals who passed the law appropriating the funds. The President doesn’t need a House of Representatives angry at him.
It is very easy to develop a fairly long list of programs that include what seem to be sizable waste of collected taxes. However, adding them all up still is just a drop in the bucket compared to the real, the actual big money.
The country is in unmanageable debt because of “entitlement” funds that are not only many but untouchable.
So, the President can get what ever he can by eliminating waste applauded by the public, and then, working as hard as he can to develop the lost prosperity that can decrease the debt in a normal manner
The UK Conservatives eliminated income tax indexing until 2028 as I recollect.
The motor fuel excise tax shall be increased by 8 cents a gallon for each fiscal year the national debt increases by over $700 billion a year.
The alcohol excise tax shall be increased by 10% for each fiscal year the national debt increases by over $900 billion a year.
The income tax shall not be indexed for inflation for a tax year if the preceding fiscal year ended with a deficit in excess of $1.1 trillion.
Refundable tax credits shall be cut by 2% a year for each fiscal year the national debt increases by over $1.3 trillion a year.
The Medicare deductible amounts shall be further increased by 2% for each fiscal year the national debt increases by over $1.5 trillion a year.
Social Security increases shall be reduced by 1%, but to not less than zero, after each year the corresponding Trust Fund decreases by more than 10%.
Federal government grant programs shall be terminated.
Tax credits with respect to electrical items shall be eliminated.
The there’s also the possibility of federal luxury taxes effective January 1, 2026:
1. fifty cents for each restaurant sweetened beverage
2. two cents per fluid ounce of industrially sweetened beverage product
3. 10 cents per ounce of product on any other industrial scale packaged food product containing an added sweetener of any type, even if a normal part of the product type, excluding the first two ounces of the product
4. 10 cents per ounce on any industrial scale packaged food product prepared by frying, excluding the first five ounces of the product
5. 10% on restaurant bills
6. 20% on utility service other than water, sewer, gas and electric power
7. $4 per pound of vehicle weight,
to be paid by the maker or importer,
on motor vehicle weight
excluding the weight of batteries,
in excess of
(a) 3,000 pounds for a car
(b) 3,500 pounds for a pickup truck
(c) 3,800 pounds for an SUV
8. 10% on monetary export
WIKI
In the Napoleonic Wars and the War of 1812, the imports and tariff taxes in the United States plummeted, and Congress in 1812 brought back the excise tax on whiskey to partially compensate for the loss of customs/tariff revenue. Within a few years, customs duties brought in enough federal income to abolish nearly all federal taxes except tariffs again. When the United States public debt was finally paid off in 1834, President Andrew Jackson abolished the excise taxes and reduced the customs duties (tariffs) in half.
Excise taxes stayed essentially zero until the American Civil War brought a need for much more federal revenue. Excise taxes were reintroduced on a wider range of items, and income taxes were introduced. Progressive activists, including the temperance movement, successfully lobbied for the 16th Amendment establishing a federal income tax to reduce the government’s dependence on alcohol taxes for revenue.
By about 1916, the loans taken out during the Civil War were all paid off, and the excise taxes were again set very low. On January 16, 1919, the 18th Amendment was passed, and alcohol production, sale, and transport were prohibited. Taxing alcohol products would have produced almost no income, given that alcohol sales and production had gone underground. All federal excise taxes remained practically zero for the next ten years.
During the Great Depression (1929–1939), President Franklin D. Roosevelt and Congress started reintroducing excise taxes to increase federal income, which had dropped because of the much lower incomes and the resulting lower income tax collections. On December 5, 1933, the 21st Amendment was ratified, and alcohol production became legal again. The healthy excise tax on now-legal alcoholic beverages paid about one-third of all federal taxes during the Great Depression.
https://en.wikipedia.org/wiki/Excise_tax_in_the_United_States
“Highway-related excise tax revenue totaled $41.5 billion in 2022, 47 percent of all excise tax revenue. Gasoline and diesel taxes, which are 18.4 and 24.4 cents per gallon, respectively, make up over 85 percent of total highway tax revenue, with the remaining from taxes on other fuels, trucks, trailers, and tires.”
“Domestic air travel is subject to a 7.5 percent tax based on the ticket price plus $4.50 (in 2022) for each flight segment (one takeoff and one landing). A 6.25 percent tax is charged on domestic cargo transportation. International arrivals and departures are taxed at $19.7 per person (in 2022)”
“Domestic air travel is subject to a 7.5 percent tax based on the ticket price plus $4.50 (in 2022) for each flight segment (one takeoff and one landing). A 6.25 percent tax is charged on domestic cargo transportation. International arrivals and departures are taxed at $19.7 per person (in 2022).”
“The tax equals about $1.01 per pack of 20 cigarettes.”
“Distilled spirits generally are taxed at $13.50 per proof gallon (a proof gallon is one liquid gallon that is 50 percent alcohol). Tax rates on wines vary based on type and alcohol content, ranging from $1.07 per gallon for wines with 16 percent alcohol or less to $3.40 per gallon for sparkling wines, but lower rates apply for the first 750,000 gallons in a given year. Beer is typically taxed at $18.00 per barrel, although reduced rates apply for breweries producing less than two million barrels.”
How about stop sending billions to The Ukraine and Iran? Deport 10-20 million illegals, shut down 50% of the Bureaucracy. Pull out of the Paris accords. Lots of money saved.
CBO suggestions:
Mandatory Spending
Options for Reducing the Deficit
Agriculture
Option 1. Reduce Subsidies in the Crop Insurance Program
Housing
Option 2. Raise Fannie Mae’s and Freddie Mac’s Guarantee Fees and Decrease Their Eligible Loan Limits
Education
Option 3. Eliminate the Add-On to Pell Grants, Which Is Funded With Mandatory Spending
Health
Option 4. Establish Caps on Federal Spending for Medicaid
Option 5. Limit State Taxes on Health Care Providers
Option 6. Reduce Federal Medicaid Matching Rates
Option 7. Increase the Premiums Paid for Medicare Part B
Option 8. Reduce Medicare Advantage Benchmarks
Option 9. Adopt a Voucher Plan and Slow the Growth of Federal Contributions for Federal
Employees’ Health Benefits
Option 10. Introduce Enrollment Fees in TRICARE for Life
Option 11. Introduce Minimum Out-of-Pocket Requirements in TRICARE for Life
Option 12. Change the Cost-Sharing Rules for Medicare and Restrict Medigap Insurance
Option 13. Reduce Medicare’s Coverage of Bad Debt
Option 14. Consolidate and Reduce Medicare Payments for Graduate Medical Education at Teaching Hospitals
Option 15. Modify Payments to Medicare Advantage Plans for Health Risk
Option 16. Reduce Payments for Hospital Outpatient Departments
Option 17. Reduce Payments for Drugs Delivered by 340B Hospitals
Income Security
Option 18. Eliminate Subsidies for Certain Meals in the National School Lunch, School
Breakfast, and Child and Adult Care Food Programs
Social Security
Option 19. Reduce Social Security Benefits for High Earners
Option 20. Establish a Uniform Social Security Benefit
Option 21. Raise the Full Retirement Age for Social Security
Option 22. Require Social Security Disability Insurance Applicants to Have Worked More in Recent Years
Veterans
Option 23. Introduce Means-Testing for Eligibility for VA’s Disability Compensation
Option 24. End VA’s Individual Unemployability Payments to Disabled Veterans at the Full
Retirement Age for Social Security
Option 25. Reduce VA’s Disability Benefits for Veterans Who Are Older Than the Full
Retirement Age for Social Security
Option 26. Narrow Eligibility for VA’s Disability Compensation by Excluding Veterans With Low Disability Ratings
Multiple Programs or Activities
Option 27. Use an Alternative Measure of Inflation to Index Social Security and Other Mandatory Programs
Discretionary Spending
Defense
Option 28. Reduce the Department of Defense’s Annual Budget
Option 29. Cap Increases in Basic Pay for Military Service Members
Option 30. Replace Some Military Personnel With Civilian Employees
Option 31. Stop Building Ford Class Aircraft Carriers
Option 32. Cancel the Long-Range Standoff Weapon
Option 33. Cancel the Army’s Future Long-Range Assault Aircraft
Option 34. Reduce the Size of the Bomber Force by Retiring the B-1B
Option 35. Reduce the Size of the Fighter Force by Retiring the F-22
Option 36. Reduce the Basic Allowance for Housing to 80 Percent of Average Housing Costs
International Affairs
Option 37. Reduce Funding for International Affairs Programs
Education and Social Services
Option 38. Eliminate Federal Funding for National Community Service
Option 39. Tighten Eligibility for Pell Grants
Veterans
Option 40. End Enrollment in VA Medical Care for Veterans in Priority Groups 7 and 8
Federal Civilian Employment
Option 41. Reduce the Annual Across-the-Board Adjustment for Federal Civilian Employees’ Pay
Multiple Programs or Activities
Option 42. Reduce Selected Nondefense Discretionary Spending
Option 43. Reduce Funding for Certain Grants to State and Local Governments
Option 44. Repeal the Davis-Bacon Act
Revenue
Individual Income Taxes
Option 45. Increase Individual Income Tax Rates on Ordinary Income
Option 46. Impose a Surtax on Individuals’ Adjusted Gross Income
Option 47. Raise the Tax Rates on Long-Term Capital Gains and Qualified Dividends by 2 Percentage Points
Option 48. Eliminate or Modify Head-of-Household Filing Status
Option 49. Eliminate or Limit Itemized Deductions
Option 50. Limit the Deduction for Charitable Giving
Option 51. Change the Taxation of Assets Transferred at Death
Option 52. Eliminate the Tax Exemption for New Qualified Private Activity Bonds
Option 53. Expand the Base of the Net Investment Income Tax to Include the Income
Active Participants in S Corporations and Limited Partnerships
Option 54. Tax Carried Interest as Ordinary Income
Option 55. Include VA’s Disability Payments in Taxable Income
Option 56. Reduce Tax Subsidies for Employment-Based Health Benefits
Option 57. Further Limit Annual Contributions to Retirement Plans
Option 58. Eliminate Certain Tax Preferences for Education Expenses
Option 59. Lower the Investment Income Limit for the Earned Income Tax Credit and Extend
That Limit to the Refundable Portion of the Child Tax Credit
Option 60. Require People Who Claim the Earned Income Tax Credit and Child Tax Credit to
Have a Social Security Number That Is Valid for Employment
Payroll Taxes
Option 61. Impose a New Payroll Tax
Option 62. Increase the Maximum Taxable Earnings That Are Subject to Social Security Payroll Taxes
Option 63. Expand Social Security to Include Newly Hired State and Local Government Employees
Taxation of Income From Businesses and Other Entities
Option 64. Increase the Corporate Income Tax Rate by 1 Percentage Point
Option 65. Tax All Foreign Income of U.S. Corporations at the Full Statutory Corporate Rate
Option 66. Repeal the “Last In, First Out” Approach to Inventory Identification and the
“Lower of Cost or Market” and “Subnormal Goods” Methods of Inventory Valuation
Option 67. Require Half of Advertising Expenses to Be Amortized Over 5 or 10 Years
Option 68. Repeal the Low-Income Housing Tax Credit
Excise Taxes
Option 69. Increase Taxes on Alcoholic Beverages
Option 70. Increase Excise Taxes on Tobacco Products
Option 71. Increase Excise Taxes on Motor Fuels and Index Them for Inflation
Other Taxes and Fees
Option 72. Impose a 5 Percent Value-Added Tax
Option 73. Impose a Tax on Emissions of Greenhouse Gases
Option 74. Impose a Tax on Financial Transactions
Option 75. Increase Certain Fees Charged by Citizenship and Immigration Services and
Customs and Border Protection by 20 Percent
Option 76. Increase Federal Civilian Employees’ Contributions to the Federal Employees Retirement System
https://www.cbo.gov/system/files/2024-12/60557-budget-options.pdf
Where were the budget hawks the last 4 years?
We do, but everone needs to understand one simple fact. Deficit spending has been propping up gdp numbers since 2008. As soon as you cut 2T in federal spending we will all get an immediate deflation recession. It will take time for the economy to adjust. My estimate is a 3 year recession when they cut 1.5-2T. Beats the depression that will occur eventually if they bankrupt the country and bust the dollars value. So it’s a pain now or death later.
Correct. That's the biggie.
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