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Saturday, December 31, 2005

The Price of Tax Cuts

The title of this commentary from the Washington Times is "Holiday surprise for the poor." That this appeared in the Washington Times (originally here) was a surprise as well:

Holiday surprise for the poor, by Clarence Page, Washington Times: ...[C]ongressional conferees have come up with a Grinch-style lump of coal for Americans who don't have a lot of political clout. ... Vice President Dick Cheney cast the tie-breaking vote on a budget that would trim federal spending, mostly from popular social programs. Senate Republican leaders were puffed up with pride over the trims they managed to impose ... on the growth of such programs as Medicare, Medicaid and student loans. Their ostensible purpose was to cut the deficit... But that savings probably will vanish like a drop in a barrel of red ink in the wake of President Bush's tax cuts, the most recent of which awards $70 billion in capital-gains tax cuts for mostly upper-income earners and investors. ...

[T]he ... bill does less to reduce the deficit than to shift its burden to poor and middle-class folks who, for example, need help paying for a nursing home or putting their kids through college. Yes, the biggest savings, $12.7 billion over five years, come from student loan programs. It would fix interest rates on student loans at 6.8 percent... The rate will be fixed, not adjustable, even if commercial rates are lower. Since student loan rates now stand at 5.375 percent, students who are thinking about consolidating their student loans to lock in a low rate for the life of their loans are strongly advised to consolidate immediately.

Note to young folks: Consider this your political payback for not voting in greater numbers. Not that older folks got much more respect ... Out-of-pocket costs for the poor people who rely on Medicare ... would go up by way of increased copayments and premiums for a net five-year savings of an estimated $6.4 billion. States also will be allowed to scale back some Medicaid benefits, while tightening eligibility for Medicaid nursing home reimbursement. Net five-year savings: $4.8 billion. ... Student loans are a true investment in enterprising students ... Nursing home aid has become a last-ditch help to many middle-class families. Yet, at a time of rising costs, Congress has put the budget-cutting knife to these very worthwhile and popular programs as if they fostered laziness...

    Posted by on Saturday, December 31, 2005 at 01:26 AM in Budget Deficit, Economics, Income Distribution, Politics | Permalink  TrackBack (0)  Comments (1)

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