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twenty02 said:
thehill.com

GOP lawmakers running out of options to pay for Trump’s costly agenda

Republican leaders are rapidly running out of ways to pay for President Trump’s agenda as GOP lawmakers shoot down various proposals to cut spending or increase revenues. Without finding some new i…
thehill.com thehill.com
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Here’s the long and short of our reality.

“People say you can’t touch benefits for anything, you can’t raise taxes. OK, then we’re going to have a debt crisis. That is the result of not talking about benefits and/or taxes,” she warned.​

However, as the historical record shows about as clearly as it can be shown, raising taxes offers very limited budgetary relief. We’ve hit 19% of GDP all of one single time - and that was at the crest of an extraordinary economic bubble. Only rarely have we hit 18%. And this is with any of the post-WWII tax codes we’ve had. Spending is currently at 23% and on its way to settling above 24%, nearly 25%.

Screenshot-2025-04-21-084553.png


The noise of the subprime meltdown (and ensuing Great Recession) and Covid can make our trajectory a little harder to see. But just notice that we were at 19% prior to the 2008-9 crisis, then we were at 20% prior to Covid, and now we've settled in around 23%.

So we have to either cut entitlement benefits, or we will have a debt crisis. We can (and almost certainly will) hike taxes too, but that’s almost a pro forma thing. It’s not going to be our primary means of fixing this.
 
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crazed_hoosier2 said:
Here’s the long and short of our reality.

“People say you can’t touch benefits for anything, you can’t raise taxes. OK, then we’re going to have a debt crisis. That is the result of not talking about benefits and/or taxes,” she warned.​

However, as the historical record shows about as clearly as it can be shown, raising taxes offers very limited budgetary relief. We’ve hit 19% of GDP all of one single time - and that was at the crest of an extraordinary economic bubble. Only rarely have we hit 18%. And this is with any of the post-WWII tax codes we’ve had.

So we have to either cut entitlement benefits, or we will have a debt crisis. We can (and almost certainly will) hike taxes too, but that’s almost a pro forma thing. It’s not how we’re going to fix this.
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I think you have made a good case on taxes overall, but we don't know how accurate that is for Social Security taxes. If we raise them 1%, or raise the cap, we don't really know what the end result would be.

I've favored a freeze on total government spending and let the economy grow into it. We could redistribute, take some from a less valued program, and give it to a more valued program. But overall spending stays the same.

For social security, raise the taxes either through a percentage hike, a cap raise, or both. Freeze COLA for a time tbd, raise the minimum age.

And don't end taxes on tips, Social Security, and overtime. That will rob the general fund AND the Social Security fund of a lot of money. Why would we hurry the crash of Social Security?

Stop viewing waste and fraud as a budget line item that one can simply wipe out and save a trillion. We seem convinced this exists and is always the reason we don't need to do more, we can just deal with that. It is a mirage, we need real plans.
 
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Marvin the Martian said:
I think you have made a good case on taxes overall, but we don't know how accurate that is for Social Security taxes. If we raise them 1%, or raise the cap, we don't really know what the end result would be.

I've favored a freeze on total government spending and let the economy grow into it. We could redistribute, take some from a less valued program, and give it to a more valued program. But overall spending stays the same.

For social security, raise the taxes either through a percentage hike, a cap raise, or both. Freeze COLA for a time tbd, raise the minimum age.

And don't end taxes on tips, Social Security, and overtime. That will rob the general fund AND the Social Security fund of a lot of money. Why would we hurry the crash of Social Security?

Stop viewing waste and fraud as a budget line item that one can simply wipe out and save a trillion. We seem convinced this exists and is always the reason we don't need to do more, we can just deal with that. It is a mirage, we need real plans.
Click to expand...

What do you mean by freeze total govt spending? You including Medicare and SS in that freeze? Considering you have millions of new people enrolling in these programs every year
 
Marvin the Martian said:
I think you have made a good case on taxes overall, but we don't know how accurate that is for Social Security taxes. If we raise them 1%, or raise the cap, we don't really know what the end result would be.

I've favored a freeze on total government spending and let the economy grow into it. We could redistribute, take some from a less valued program, and give it to a more valued program. But overall spending stays the same.

For social security, raise the taxes either through a percentage hike, a cap raise, or both. Freeze COLA for a time tbd, raise the minimum age.

And don't end taxes on tips, Social Security, and overtime. That will rob the general fund AND the Social Security fund of a lot of money. Why would we hurry the crash of Social Security?

Stop viewing waste and fraud as a budget line item that one can simply wipe out and save a trillion. We seem convinced this exists and is always the reason we don't need to do more, we can just deal with that. It is a mirage, we need real plans.
Click to expand...

I agree with a lot of what you're saying or suggesting.

But we do have historical data on what hiking FICA taxes does to the revenues it churns. It's been done numerous times throughout its history. In fact, it's technically hiked every year -- as the cap subject to OASDI increases every year. On top of that, the rates have risen through the years. They began at 1% (up to $3K of income).

Here's the FICA history from 1951-1990.

Screenshot-2025-04-21-090456.png


It's been 7.65% (times 2, per the employer match) until 2013, when the 0.9% Medicare surtax was added on income above $200,000.

Even if these taxes are hiked again, we're not getting out of this without benefit cuts. Our discussions need to be centered around the best ways to cut the programs' cost. It's the discussion nobody wants to have -- but the most important one we have to have.
 
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twenty02 said:
What do you mean by freeze total govt spending? You including Medicare and SS in that freeze? Considering you have millions of new people enrolling in these programs every year
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Nope, can't do that for the reason you cite. But all discretionary spending domestic, foreign, and military, can be frozen. It isn't the root of the problem to be sure, but it doesn't mean we shouldn't work to keep them in order. Since my plan includes more taxes for Social Security it has to include attempts to hold back spending to have a chance of passing. We can't pass a bill that only allows one party to trumpet a "win".
 
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twenty02 said:
What do you mean by freeze total govt spending? You including Medicare and SS in that freeze? Considering you have millions of new people enrolling in these programs every year
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That isn't going to happen. But there has been discussion about adjusting the COLA formula -- which could make some sense, depending on how they did it.

The problem with that, though, is that it applies across-the-board. Personally, I think they need to try to make an effort to skew the burden of any benefit cuts away from the lowest rungs of the economic ladder. Leave them alone and focus on everybody who isn't poor.
 
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crazed_hoosier2 said:
I agree with a lot of what you're saying or suggesting.

But we do have historical data on what hiking FICA taxes does to the revenues it churns. It's been done numerous times throughout its history. In fact, it's technically hiked every year -- as the cap subject to OASDI increases every year. On top of that, the rates have risen through the years. They began at 1% (up to $3K of income).

Here's the FICA history from 1951-1990.



It's been 7.65% (times 2, per the employer match) until 2013, when the 0.9% Medicare surtax was added on income above $200,000.

Even if these taxes are hiked again, we're not getting out of this without benefit cuts. Our discussions need to be centered around the best ways to cut the programs' cost. It's the discussion nobody wants to have -- but the most important one we have to have.
Click to expand...

One other thing on this. Until 1991, the SS tax and Medicare tax were one and the same thing. The cap applied to both of them. Over the next few years, they separated them into two separate taxes -- 12.4% for SS, 2.9% for Medicare (including both taxes deducted from payroll and those that don't appear on the check). The cap on Medicare taxes was phased out to increase the tax revenues.

So Medicare not only doesn't have a taxable income cap, it also has had a 0.9% surtax on income above $200K since 2013. And despite these changes, it is still projected to be $100T underfunded over the next 75 years.

This is the sort of thing I'm talking about when I say that we need to focus less on hiking taxes and more on paring benefits. We're not avoiding that -- not, anyway, if we want to keep this ship afloat.
 
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Goldman estimating impact of 90 billion in reduced international travel spending as foreigners scale back plans to come here.
 
crazed_hoosier2 said:
One other thing on this. Until 1991, the SS tax and Medicare tax were one and the same thing. The cap applied to both of them. Over the next few years, they separated them into two separate taxes -- 12.4% for SS, 2.9% for Medicare (including both taxes deducted from payroll and those that don't appear on the check). The cap on Medicare taxes was phased out to increase the tax revenues.

So Medicare not only doesn't have a taxable income cap, it also has had a 0.9% surtax on income above $200K since 2013. And despite these changes, it is still projected to be $100T underfunded over the next 75 years.

This is the sort of thing I'm talking about when I say that we need to focus less on hiking taxes and more on paring benefits. We're not avoiding that -- not, anyway, if we want to keep this ship afloat.
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I do like your idea of maybe freezing higher-end Social Security and not lower. I almost mentioned it, but decided there were only so many times I like being called a socialist :).

I think we get stuck when we suggest working class has to bear all the burden. Unless we do that sort of COLA freeze, the burden will fall on people who were laborers more than managers. That's where the tax point comes in, it helps spread the burden out a bit more.

As to your chart earlier on Social Security taxes, do you have the revenue changes? That's what would be interesting. Did raising the cap actually raise revenue? You have made the point that does not follow in general taxes, does it in Social Security?
 
crazed_hoosier2 said:
One other thing on this. Until 1991, the SS tax and Medicare tax were one and the same thing. The cap applied to both of them. Over the next few years, they separated them into two separate taxes -- 12.4% for SS, 2.9% for Medicare (including both taxes deducted from payroll and those that don't appear on the check). The cap on Medicare taxes was phased out to increase the tax revenues.

So Medicare not only doesn't have a taxable income cap, it also has had a 0.9% surtax on income above $200K since 2013. And despite these changes, it is still projected to be $100T underfunded over the next 75 years.

This is the sort of thing I'm talking about when I say that we need to focus less on hiking taxes and more on paring benefits. We're not avoiding that -- not, anyway, if we want to keep this ship afloat.
Click to expand...

I was curious, so I found a dataset. This is Fed/State "Social Insurance" taxes combined. FWIW -- a whole lot of noise in the past ~25 years. Especially in the 08-09 period.

Screenshot-2025-04-21-093646.png


Here is federal only. So this would be revenues generated by the FICA tax. They are about 75 bps below their peak. Stayed above 6% from the 1980s until about 2007 or so. I know there was a 1-year tax holiday on the employees' portion of the OASDI around 2011 or 2012. Looks like that definitely created a brief dip.

Screenshot-2025-04-21-094043.png
 
Marvin the Martian said:
I do like your idea of maybe freezing higher-end Social Security and not lower. I almost mentioned it, but decided there were only so many times I like being called a socialist :).

I think we get stuck when we suggest working class has to bear all the burden. Unless we do that sort of COLA freeze, the burden will fall on people who were laborers more than managers. That's where the tax point comes in, it helps spread the burden out a bit more.

As to your chart earlier on Social Security taxes, do you have the revenue changes? That's what would be interesting. Did raising the cap actually raise revenue? You have made the point that does not follow in general taxes, does it in Social Security?
Click to expand...

It would certainly seem so. Federal "social insurance" taxes only generated about 1.45% of GDP in 1950. And they got as high as 6.2-6.4% before pulling back a little bit. Been below 6% ever since the Great Recession.

Interesting to note that this data would include the 0.9% Medicare surtax on income above $200K instituted in 2013. And it's still on the books.

Removing the cap on income subject to Medicare tax doesn't seem to have moved the needle much. The cap phased out in the early 90s.
 
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crazed_hoosier2 said:
I was curious, so I found a dataset. This is Fed/State "Social Insurance" taxes combined. FWIW -- a whole lot of noise in the past ~25 years. Especially in the 08-09 period.

Screenshot-2025-04-21-093646.png


Here is federal only. So this would be revenues generated by the FICA tax. They are about 75 bps below their peak. Stayed above 6% from the 1980s until about 2007 or so. I know there was a 1-year tax holiday on the employees' portion of the OASDI around 2011 or 2012. Looks like that definitely created a brief dip.

Screenshot-2025-04-21-094043.png
Click to expand...
So we can see from two major stock market crashes, those are very hard on Social Security revenue. In other words, this year isn't going to be a good year.
 
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sglowrider said:
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Freeman said: "The Japanese have just been in Washington. Their experience apparently was they went to talk to the American leadership on this matter, and the American leadership said 'what are you offering?' And the Japanese said 'well, what is it that you want?' And the Americans could not explain what they wanted."
Click to expand...


 
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Dow Headed for Worst April Since 1932 as Investors Send ‘No Confidence’ Signal
Few think administration’s negotiations with trade partners will yield results soon enough to ease the strain


The Trump rout is taking on historic dimensions.

The Dow Jones Industrial Average shed almost 1,000 points on Monday and is headed for its worst April performance since 1932, according to Dow Jones Market Data. The S&P 500’s performance since Inauguration Day is now the worst for any president up to this point in data going back to 1928, according to Bespoke Investment Group

Worries about trade restrictions and the prospect of President Trump firing Federal Reserve Chairman Jerome Powell have investors bracing for greater losses ahead. Corporate earnings reports are rolling in, along with executives’ tariff-dented outlooks for the months ahead. Few think the administration’s negotiations with trade partners will yield results soon enough to ease the strain.

Meanwhile, counterweights that usually strengthen when stocks fall—such as government bonds and the U.S. dollar—are also under pressure, leaving investors with few havens to wait out the storm.

“It’s the hallmark of the ‘no confidence’ trade,” said Scott Ladner, chief investment officer at Horizon Investments. The Charlotte-based firm trimmed its U.S. equity position several weeks ago to favor more international stocks. “It’s impossible to commit capital to an economy that is unstable and unknowable because of policy structure.”
 
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twenty02 said:
Dow Headed for Worst April Since 1932 as Investors Send ‘No Confidence’ Signal
Few think administration’s negotiations with trade partners will yield results soon enough to ease the strain


The Trump rout is taking on historic dimensions.

The Dow Jones Industrial Average shed almost 1,000 points on Monday and is headed for its worst April performance since 1932, according to Dow Jones Market Data. The S&P 500’s performance since Inauguration Day is now the worst for any president up to this point in data going back to 1928, according to Bespoke Investment Group

Worries about trade restrictions and the prospect of President Trump firing Federal Reserve Chairman Jerome Powell have investors bracing for greater losses ahead. Corporate earnings reports are rolling in, along with executives’ tariff-dented outlooks for the months ahead. Few think the administration’s negotiations with trade partners will yield results soon enough to ease the strain.

Meanwhile, counterweights that usually strengthen when stocks fall—such as government bonds and the U.S. dollar—are also under pressure, leaving investors with few havens to wait out the storm.

“It’s the hallmark of the ‘no confidence’ trade,” said Scott Ladner, chief investment officer at Horizon Investments. The Charlotte-based firm trimmed its U.S. equity position several weeks ago to favor more international stocks. “It’s impossible to commit capital to an economy that is unstable and unknowable because of policy structure.”
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I wonder when/if MAGA will turn on him as he continues to cause a financial calamity. Eventually your own hard earned money has to trump (pun intended) fealty to the leader, right?
 
Cortez88 said:
I wonder when/if MAGA will turn on him as he continues to cause a financial calamity. Eventually your own hard earned money has to trump (pun intended) fealty to the leader, right?
Click to expand...
The S&P is down 10%. It's not a big deal. If he tweeted out they have a deal with China it would probably turn green on the year by the end of the trading day. The calamity will come from a severe recession, which will happen eventually if he doesn't add stability to the markets so businesses can adjust to whatever the rules are.
 
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snarlcakes said:
The S&P is down 10%. It's not a big deal. If he tweeted out they have a deal with China it would probably turn green on the year by the end of the trading day. The calamity will come from a severe recession, which will happen eventually if he doesn't add stability to the markets so businesses can adjust to whatever the rules are.
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Agree. There are already downstream effects at that are occurring. Some won’t hit us for a bit, but we will all be bitch slapped soon enough.

 
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Above the law?

Let me get this straight. I can go to DC, bear spray cops, beat them with flagpoles, spread shit around the Capitol building while wearing my "Auschwitz was a great idea" T-shirt, cause $MILLIONS in damage, and then be pardoned?
 
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outside shooter said:
Above the law?

Let me get this straight. I can go to DC, bear spray cops, beat them with flagpoles, spread shit around the Capitol building while wearing my "Auschwitz was a great idea" T-shirt, cause $MILLIONS in damage, and then be pardoned?
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To be fair. By the time of the pardons most of those defendants had served far more time and endured far more punishment than their crimes warranted.
 
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Color me stunned. Dems may have an 80% approval on this board but this board is so far removed from the real world its not even funny.

a sense that Democrats were cultural elites— how they talked, issues they cared about, all the DEI programs. And so essentially, I think a lot of people in the middle of the country thought that Democrats were looking down on them and that they weren't competent to govern.” #DemocraticParty


 
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bailey777 said:
Color me stunned. Dems may have an 80% approval on this board but this board is so far removed from the real world its not even funny.

a sense that Democrats were cultural elites— how they talked, issues they cared about, all the DEI programs. And so essentially, I think a lot of people in the middle of the country thought that Democrats were looking down on them and that they weren't competent to govern.” #DemocraticParty


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Congrats on finally learning how to link a tweet.
 
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outside shooter said:
Above the law?

Let me get this straight. I can go to DC, bear spray cops, beat them with flagpoles, spread shit around the Capitol building while wearing my "Auschwitz was a great idea" T-shirt, cause $MILLIONS in damage, and then be pardoned?
Click to expand...

Pretty sure most of those t-shirt wearers are part of the leftist movement these days.
 
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bailey777 said:
Color me stunned. Dems may have an 80% approval on this board but this board is so far removed from the real world its not even funny.

a sense that Democrats were cultural elites— how they talked, issues they cared about, all the DEI programs. And so essentially, I think a lot of people in the middle of the country thought that Democrats were looking down on them and that they weren't competent to govern.” #DemocraticParty


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Take a look at the right track, wrong track poll. The President has brought that down to an incredible low.

 
bailey777 said:
Color me stunned. Dems may have an 80% approval on this board but this board is so far removed from the real world its not even funny.

a sense that Democrats were cultural elites— how they talked, issues they cared about, all the DEI programs. And so essentially, I think a lot of people in the middle of the country thought that Democrats were looking down on them and that they weren't competent to govern.” #DemocraticParty


View embedded media
Click to expand...
The President's approval rating on the economy is abysmal:

www.realclearpolling.com

President Biden Job Approval - Economy | RealClearPolling

President Biden Job Approval - Economy | RealClearPolling
www.realclearpolling.com www.realclearpolling.com
 
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