The fiscal cliff deal comes clearer: a 37% top tax rate and a higher Medicare eligibility age

[Recursion]

This discussion thread was locked as off-topic by Rhiannon12866 (a host of the Latest Breaking News forum).

Source: Wonkbook at WaPo

Something hilarious happened in the Senate on Thursday.

The White House has been pushing a plan to transfer authority for the debt ceiling to the executive. They call it the McConnell plan, because it’s based on an idea Senate Minority Leader Mitch McConnell proposed in July 2011.

...

Talk to smart folks in Washington, and here’s what they think will happen: The final tax deal will raise rates a bit, giving Democrats a win, but not all the way back to 39.6 percent, giving Republicans a win. That won’t raise enough revenue on its own, so it will be combined with some policy to cap tax deductions, perhaps at $25,000 or $50,000, with a substantial phase-in and an exemption for charitable contributions.

The harder question is what Republicans will get on the spending side of the deal. But even that’s not such a mystery. There will be a variety of nips and tucks to Medicare, including more cost-sharing and decreases in provider payments, and the headline Democratic concession is likely to be that the Medicare eligibility age rises from 65 to 67.


Read more: http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/07/the-fiscal-cliff-deal-comes-clearer-a-37-top-tax-rate-and-a-higher-medicare-eligibility-age/

---

Raising the Medicare age is stupid, but not the apocalypse (and if anything, having the Medicare and SS ages be the same makes some sense as long as we're still shackled with employer-supplied health insurance, but now they'll both be too high).

Anyways, signs that Congress might actually be working again inspires at least a little hope.

[sadbear]

1. 37%?

And what is it currently?

[Recursion]

2. 35%

Getting it back up to 39% would net about 800 billion over ten years. 37% would be about 400 billion.

[Ash_F]

8. How will the job providers survive with this massive 2% tax hike?

It's probably effectively more like 0.5% anyway.

[AAO]

48. It's not about the job providers, but the job creators.

The job creators are you and me. Demand is what creates jobs. The more people with money in their pockets, the better businesses do, and the more they employ.

On edit: I also agree with what you said - I just got carried away by what you said and went off on a tangent.

[Ash_F]

57. Good point.

Just wish Dem leaders could turn that talking point on its head like that.

[AAO]

71. You know it's not because I'm smarter than they are!

Bums. Unless they can step up and make a difference, Those are our heroes.

[dsc]

3. That is completely unacceptable

First, 37% isn't even half way (37.3% is halfway). Second, raising the Medicare age will literally kill thousands each year and actually raise the cost of Medicare, not lower it. Plus it will raise the cost of private insurance as well.

[Myrina]

13. Don't overlook this nugget:

"... including more cost-sharing ... "


In other words, higher co-pays or deductibles, or lower benefit rates.

We are being screwn. Again.

[Lasher]

45. More like higher co-pays AND deductibles

AND lower benefit rates.

[thesquanderer]

53. How does it raise the cost of Medicare?

I'm not in favor of the change, but I'm not sure how raising the eligibility age (therefore paying for fewer people) would raise its cost. It would have to be a savings, at least in the short term. I guess there could be an argument that longer term costs could increase, if people who were 65 and 66 didn't get needed treatment, and then needed more expensive treatment when they hit 67+. But I'd still be very surprised if there wasn't a net savings here.

[curlyred]

70. Contracting the pool

Means you are covering less but more sick people. If we really want to lower Medicare costs, you would lower the eligibility age and expand the pool by adding younger healthier people, this lowering the average cost per participant.

That is how all successful insurance companies operate- spread the risk by expanding the pool.

[ItsTheMediaStupid]

56. Screw that deal - off the cliff is better

Then cut the middle class taxes.

[AAO]

73. FUCK'n "A" !!!

Still don't know what that really means. Grew up saying it.

[Squinch]

82. Yeah. Why are we even discussing this? They are over a barrel. Let's just roll it over the cliff.

Then let the Republicans dare to not cut the taxes of the 98%. It would never happen!

[INdemo]

65. I agree...

here is what happens with Democrats including the President..We work our ass off to get them elected..We phone bank,we give we canvass because we dont want the medicare age raised nor do we want cuts to Social Security..We hear the President during his stump speeches say that medicare will only be streamlined,administrative costs cuts,provider payments lowered,etc etc but the medicare age will not be raised...he said it. Now he enters the White House for his second term slams the door behind him and flips us the bird and thanks us for all our help....
I am ready to join protests in Washington to make sure the Democrats don't cave and we get what we were promised for all our money and hard work to get these double crossers elected

[ProSense]

4. This is absolute garbage.

That’s not a policy I like much, but New York magazine’s Jonathan Chait accurately conveys the White House thinking here: They see it as having “weirdly disproportionate symbolic power,” as it’s not a huge (or smart) cut to Medicare benefits, and most of the pain will be blunted by the Affordable Care Act. But Republicans and self-styled deficit hawks see it as a big win. And Democratic House Minority Leader Nancy Pelosi, who staunchly opposes raising the retirement age, has stopped well short of ruling it out.

It's Ezra Klein pushing Chait's idiotic idea.

http://www.democraticunderground.com/?com=view_post&forum=1002&pid=1941503

Greg Sargent has a better read on Boehner's position:

John Boehner nervously eyes the clock
http://www.democraticunderground.com/10021941791

[David__77]

5. No progressive should support this.

...

[aandegoons]

6. Good cop Bad cop

Hmm wonder who the suckers are?

[fleur-de-lisa]

47. The suckers? That would be the middle class.

And welcome to DU!

[itsrobert]

7. Repeal on tax deduction for donations to churches

problem solved. The federal government has no place subsidizing religion.

[democrattotheend]

20. Not sure that would be Constitutional

Because if you allow tax deductions for other charities but not churches, that is arguably discriminating against religion.

[kath]

46. The thing is, most churches don't really do much in the way of real "charity" - functionally,

they're social clubs.
Especially the big huge mega-churches that sit on acres and acres of tax-free land, with their movie theaters, cafes, gyms, TV equipment for their TV services, highly-paid "ministers", etc.
It's total fucking bullshit that all that stuff is tax-exempt.

[ItsTheMediaStupid]

55. I think that most churches do perform a lot of charitable work

What you're talking about is the exception, not the rule.

Getting back to the topic, 37% isn't high enough.

[democrattotheend]

78. Definitely not the case for my synagogue

We host a group of homeless men for two weeks every year during Christmas, cook a meal for a homeless shelter once a month, collect various supplies for shelters, do an interfaith MLK Day service with a church in a poor neighborhood designed to raise awareness, and do a lot of other social justice work, mostly targeted at the poorest city in the county.

I think going after churches that abuse their deductible status is a good idea, but I am pretty sure removing deductions to all churches while retaining it for other non-profits would raise first amendment issues. Especially since contributions to other "social clubs" with 501(3)(c) status are tax-deductible.

[99th_Monkey]

34. If the repeal is ONLY for CHURCHES, I too would support that.

but totally eliminating the charitable deduction for all NGOs and/or not-for-profit
public benefit 501c3 corporations is a really bad idea. These groups do TONS
of human services work, such as building truly affordable and decent housing for
lower income folks, providing technical assistance to lower income people wanting
to start their own micro-business, food banks, homeless shelters <--- ALL of these
are run by non-profit organizations that get LOTS of their funding from private donors,
BECAUSE of the charitable donation deduction. Just sayin' ... this may be a can of
worms we don't want to open, as most of these truly beneficial kinds of agencies are
staffed by progressives who are doing the work as a profession, and also are doing
important work to assist lower income people, and minimize suffering of the poor.

[BeyondGeography]

9. ACA blunting the effects of higher Medicare age

Until it doesn't anymore. This is shite.

[cosmicone]

10. Not going to happen

Obama would rather go off the cliff than accept this.

[Myrina]

19. ... and you know that, how exactly?

The man is NOT a liberal. And in his post-election pressers, he said everything was on the table.
This, I imagine, is part of that 'everything'.

[Recursion]

27. Err.. he's said SS is off of the table

He's also said that Presidential authority over the debt ceiling, which isn't even in the game yet, is preemptively off of the table, on our side.

The SS age has been upped to 67. As long as we're getting insurance through our employers, the Medicare age being the same thing makes some basic sense, particularly with ACA coming into play. And if we (hopefully) stop having employer-provided health insurance, then it doesn't really matter that much.

[dixiegrrrrl]

44. Right now there is an option for "early" SS retirement, at 62.

With a % loss of monthly income.
So I am sure that raising the SS age to 67 woud not exclude early retirement.

Right now, anyone getting Soc. Sec. disability is automatically entitled to Medicare after 2 years of disability.
No matter the age.
In fact, if you get Soc. Sec. disabiity before age 65, you will be automatically enrolled into "normal" Soc. Sec. when you turn 65. ( or 67, after the age change passed..if it passes).

The DANGER with Soc. Sec. funding is if the payroll tax decreases continue. Soc. Sec is funded via payroll tax.
so those tax decreases are eating away at SS on paper reserves.

The OTHER danger is when they cut Medicare payments to service providers.
Those docs who do not flee from Medicare patients will do what my doc just did..raise the office visit rates.
Medicare will still pay for some of that office visit charge, but the Co-pay will jump. As mine just did.

[Walk away]

11. A Medicare eligibility age rises from 65 to 67 will end President Obama's mandate for anything else

he may want to accomplish in the next 4 years. He and the Democrats in the House will be D.O.A. going forward.

[Recursion]

15. Sort of like anybody who raised SS eligibility from 65 to 67 would be politically dead forever?

Oh... right...

[Mojorabbit]

28. In my book they would be. You really do start to tire when you hit your late 50s. nt

[thesquanderer]

51. I think you missed Recursion's point

Someone already did raise the SS retirement age from 65 to 67.

[AAO]

63. It's gradual - I'm waiting to 66.

I think at a minimum the SS & Medicare ages should be in sync. Most people can't retire without both.

[AnotherMcIntosh]

12. A tax trick may also be used to reduce Social Security benefits.

It was first used by Reagan.

Prior to Reagan, 100% of Social Security benefits paid by the Federal government were kept by the recipients.

Reagan changed the law so that 50% of the SS benefits became subject to Federal taxation when a certain threshhold was met.

So, the Federal government made SS payouts and then took some of them back.

Clinton repeated this trick. He reduced SS benefits by increasing the tax liability on such payouts so that 85% of SS benefits became subject to taxation under similiar conditions.

With Obama, it's likely that he is going to compromise with the Republicans and reduce SS benefits by further increasing the tax liability to 100% of SS benefits under similiar conditions.

In short, one hand will give while the other hand will take away. They won't take it all. But they will take more than what they have been.

[democrattotheend]

14. I predicted something like this a few days ago

I can't remember where I posted it, but I predicted that we would end up with a 37% tax rate for the top 2%, a 2-year hike in the Medicare eligibility age (most likely phased in over 5 or 10 years), a hike in the premiums for Medicare Part B for higher-income beneficiaries, and hopefully some stimulus.

A deal like that is not ideal, but it would be worth considering IF and ONLY IF it took away the debt ceiling as a political weapon, kept the scheduled hikes in the capital gains rate in tact (probably more important than top income tax rate, since most rich people make more in capital gains), and restored the domestic side of the scheduled sequester cuts. But I really hope they can come up with an alternative to raising the Medicare age. I agree that it's not the apocalypse (especially if it's phased in over 10 years), but it's a bad policy that will cause more pain to seniors than it saves the government.

[Recursion]

18. Agreed: this has to include something like the McConnell plan

And Obama has made it very clear that the debt ceiling authority is not something he's going to negotiate.

[splat]

16. Raising Medicare age will keep older workers from retiring

Employers don't want older workers hanging on just because they can't get Medicare till 67.

This will just suppress the job market for younger people.

[LibDemAlways]

24. Employers are already letting older workers go in droves. This just

would increase the number of seniors without work and without insurance.

[abelenkpe]

54. Exactly nt

[HockeyMom]

79. Iam 64 and not working

My husband is the same age and working, BUT it would cost $500/month for spouse coverge ($700 family) under his employer FLORIDA insurance. Insurance is INSANE in this state.

If the age is raised for Medicare, it would be cheaper for us to pay the PENALTY than try to get private, or employer, insurance for me.

[Myrina]

26. I think it will be slightly different ...

... you're right that employers don't want older workers hanging on ... so they're going to be 'retired' and without the SS or Medicare eligibility, they'll either have to buy high priced insurance plans until Medicare/MedSupp can kick in, and/or they'll represent a 'burden' on their children who will have to step up to support them: another kick in the head for the struggling middle class families trying to stay afloat.

[LibDemAlways]

17. The raising the Medicare eligibility age part is bullshit. There are already too

many people over 50 but not yet 65 who are out of work, have no health insurance, and are trying to hang on until they qualify for Medicare. Obama and Congress should absolutely not go along with this. Why should the little guy suffer while the rich have to pay only a little bit more that they'll barely notice anyway?

[Recursion]

21. ACA will help that, somewhat

A lot of people in their 60s will be newly eligible for Medicaid. Not ideal, but it's something.

[Scuba]

33. Bullshit. Raising the eligibility age would cost, not save, money.

[Recursion]

41. Of course it would, but the cost would be shifted to employers and individuals

It's another way of moving costs from public to private. It sucks. And we're going to have to do some of it to get anything done.

[geek tragedy]

60. A top rate of 37% is a win for the Republicans (they get to keep most of the Bush tax cuts

for the wealthy).

And then they get to DECREASE the number of persons eligible for Medicare.

If true, it would make Obama the all-time worst negotiator on Planet Earth.

[Scuba]

75. Why must we do "some of it"? There's lots of places to get money besides stealing it ....

... from the People who paid into it, planned on it being there for them. The wealthy can easily afford a much higher rate than even the 39%.

If Obama signs off on this he'll lose his support for anything else he wants to do.

[Walk away]

61. Sure, after they lose their home.

If you have nothing you can apply for Medicaid. If you own a home or a condo and have a little income to get by you are shit out of luck with Medicaid or the ACA.

No point in saving for retirement if you can't afford to stay alive until then.

[Firebrand Gary]

22. NO ONE campaigned on raising the Medicare eligibility age, NO FUCKING DEAL!

Rates go up on the top, we campaigned on it, the public agreed! Leave Medicare and SS alone. Period.

[democrattotheend]

25. Nobody campaigned against it either

At least, I don't remember it ever coming up.

I think it's bad policy, but the president showed receptiveness to it before the election, so I don't think it's completely fair to say that he broke a promise or pulled a fast one or anything.

I could be wrong about that...has he ever said that he opposes raising the eligibility age?

[DJ13]

23. *

[Disconnect]

29. Social Security has already been lowered

to the many that have lost good paying jobs. By the lowering of income their wage average goes down, and also the amount of OASDI they would collect upon retirement.

[1StrongBlackMan]

30. I read the article ...

and the links and the links to the links ... I even put on my DUer glasses ... and still don't see anything to support the title's claim of raising the age is/will be a part of the deal.

[Coyotl]

31. If they raise Medicare to 67, I'll never vote for a Dem again!

Period. Fuck em!

[Recursion]

32. Cool story, bro

[Coyotl]

38. I'm not only dead serious, I'll likely be dead and unable to vote.

People will die, plain and simple, if they don't have Medicare when they need it.

[forestpath]

50. Neither will I. Might as well just hit myself with a hammer.

[Scuba]

35. Totally unacceptable, such a plan will be met with millions in the streets.

[Recursion]

42. No, it really won't

It's a bad idea, but millions will not show up in the streets because of it.

[kickysnana]

36. Apocolypse for those recently disabled and over 50

Disability takes 5 years to slog through. Hospitals no longer give credit. You need a heart valve, cancer treatment or even complex diabetes treatment, tough. Try to live another 5 let alone another 20 years.

The obituaries are now full of those people who could have lived if they had medical care but they live in this third world country that does not value human life and dignity.

[Recursion]

43. In two decades when the age increase comes into effect, Medicaid will be expanded

Or, maybe not, but either way pretending that anything planned for 20 years from now can be realistically predicted is kind of stupid. The whole "long-term deficit" fight is stupid, particularly since this Congress can't bind a future Congress's hands.

[Firebrand Gary]

37. 716 Billion, 716 Billion, 716 Billion, 716 Billion, 716 Billion.......

Why on earth would we permit an altered repeat of this? Let the GOP drive us off the "cliff", teach them that we do not negotiate with economic terrorist!

[geek tragedy]

39. This is speculation, not news. A complete disaster if true though.

And proof that the new Obama turned out to be the same caver-in-chief as the old Obama.

Pray that this is false.

[Scuba]

40. Why would any Dem in Washington be interested in giving the Republicans a win?

[forestpath]

49. This would be a complete betrayal as far as I'm concerned.

[abelenkpe]

52. This is great

if you already have medicare. Otherwise it's just a way to make your children pay for an economic crisis they didn't cause. Yeah, make em work longer and pay more for less so the very rich don't have to pay a couple percentage points more in taxes.

[OKNancy]

58. For what it's worth, this is not breaking news

it's pure speculation on the writers part... I do like him, but if you read the whole article, he is just guessing

[wryter2000]

59. Fuck that

People need Medicare earlier, not later. After 60, health care expenses skyrocket. People can't wait until nearly 70.

I already have to wait until 66 to retire because the SS eligibility age went up under Reagan. If I now have to wait until 67 for Medicare, that's a year of my life lost to a crappy job when I don't have many more years left.

To the 30-somethings here...at some point, you're going to realize that your time alive is limited. One or two more years matter.

I hope the Dems tell the President that this will not fly. Nope. No way.

[grahamhgreen]

62. This would be a slap in the face to all of us. No deal gets us 39%!!!!!

[ProSense]

64. Krugman: I Hope This Isn’t True

Krugman: I Hope This Isn’t True
http://www.democraticunderground.com/10021943877

[Fearless]

66. "cost-sharing and decreases in provider payments" = YOU GET FUCKING SCREWED! n/t

[Mass]

67. Sorry, but increasing Medicare eligibility age will kill people

A lot of people wait until they are 65 to see a doctor, and sometimes it is too late. Imagine what it will mean if it is 67.

So, no, No Hope There. Just a feeling that the fiscal cliff will be done on the back of the poorest, those who are typically do not have health insurance or one with a HUGE copay. But I knew that for a very long time. This party is and always been about f*ng the poorest, as they do not vote.

[Recursion]

74. Keeping it where it is will kill people.

For that matter, since there are currently about a million iatrogenic deaths per year, lowering it will kill people too.

Worrying too much about plans for 20 years from now (when any age increase would kick in) is futile.

[Comrade_McKenzie]

68. "Proposed in July 2011"

[Teamster Jeff]

69. If it's true

Obama just handed over the Senate to GOP in 2014. Not that it will matter by then.

[stupidicus]

72. it reads like a sellout, if that's the case.

and who are you to determine who it will or won't be an apocalypse for.

You're right -- to raise the eleigibility age is stupid, and criminally so.

http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/03/raising-medicares-age-saves-feds-5-7-billion-costs-you-11-4-billion/?wprss=rss_ezra-klein

http://www.offthechartsblog.org/raising-medicare%E2%80%99s-eligibility-age-would-raise-costs-not-reduce-them/

[AAO]

77. What sucks is we have to just wait it out, hope

for the best, expect the worst, and try to adapt and regroup. The people will always win in the end.

[defacto7]

76. Give me the cliff...

Here's my plan....

Forget Medicare and SS.

Prosecute churches for political activities.

$250,000 to $400,000 - 39%

$400,001 to $750,000 - 45%

$750,001 to $1,000,000 - 57%

$1,000,001 up - 70% plus 1% for every million above that with a cap at 90%

As you can see, I'm no politician... (or tax accountant) But we need some plain, blunt action.

[joshcryer]

80. This is what I figured would happen.

[Rhiannon12866]

81. Locking, not breaking news, but analysis, opinion

Please consider reposting in Politics or GD. Thanks!