A “fundamental disconnect” – Americans Want Services They Don’t Want to Pay For.
Email ABC News' Zachary Wolf reports: With President Obama aiming to tackle jobs and the debt in his state of the union, here is some sobering testimony from CBO Director Douglas Elmendorf. Targeted spending freezes, executive pay freezes and bank taxes won’t work, he implies. What the growing national debt boils down to, he told the House Budget Committee this morning, is that Americans want the government to provide for them (Medicare and Social Security). They just don’t want to pay for it. ”There is a fundamental disconnect between the services that people expect from the government and the tax revenue that people are willing to send to the government, ” Elmendorf said. Put simply, Elmendorf said, “The outlook for the federal budget is bleak.” The size of the federal debt is growing at an alarming pace and, he projected, will be more than 60 percent of the GDP within ten years, a rate that is “unprecedented” in the post-war era, he said. Read Elmendorf’s testimony on the budget outlook here: And that’s assuming Congress allows the 2001 and 2003 tax cuts to expire and does not pass its annual tweak to shelter middle class families from the Alternative Minimum Tax. What’s more, Elmendorf says unemployment won’t be at pre-recession levels until 2014. ”More of the pain from this recession lies ahead of us than behind us,” he said. That debt is owned by foreign countries and investors. As the debt gets bigger, those lenders could be less likely to lend to the US. When that contraction would happen is unclear, said Elmendorf. But he did say the US is “moving into territory that most countries stay out of.” He also says it could have been a lot worse. While the unemployment rate is at 10 percent, says Elmendorf, the federal stimulus boosted jobs numbers by up to 1.6 million in the third quarter of last year alone. But because the unemployment rate is worse than expected, the cost of the stimulus has also gone up. On health reform, Elmendorf said the sweeping bills passed by the House and the Senate would both lower the deficit if they “unfolded as written.” “But they are a small step in that direction,” he said. Democrats argue that CBO is too conservative in its projection of savings from the bills, which many Democrats feel would be more extensive. In response to a question, Elmendorf told the House panel that, “if something is not done, then very very bad things happen,” he said, adding to Rep. John Campbell, R-Calif, “But the assumption is that you and your colleagues will take action.” What that action is remains to be seen.
Senators on Tuesday rejected a proposal to create a bipartisan panel that would study the growing deficit and recommend how to fix the problem with a guaranteed, vote on those recommendations on the Senate floor. A similar system was enacted in the late 1980s to decide which military bases should be closed. Some Senators, from both parties, who opposed the debt reduction panel did not want to cede power to an unelected group of appointees. Some Republicans feared the panel would suggest raising taxes. President Obama is expected to appoint a similar panel to make recommendations, but without guaranteed votes in Congress.
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Gee what a surprise.
Posted by: Huh | January 27, 2010, 12:33 pm 12:33 pm
maybe “government” should be more friendly and customer-oriented. Why SHOULD we be forced to pay for things we don’t want? Sure we can elect politicians but are still trapped by decisions made by appointed, czars, or politicians from other States- who we cannot elect. Firstly, more the “big brother” laws, social spending programs, social planning, and land grabs should be run by the States and local government- then the people have a more direct say if they want them or not. The Feds should only be involved in strict Constitutionally things (defense, etc.) Then if people in Mass want gay marriage, confiscatory taxes, gun restrictions, and large social welfare programs they can vote that way. But those in Montana who would rather have low taxes and more freedom can vote that way and everyone, or most, are happy. Why should tax money from some States go to other States for policies that we don’t like or don’t effect us?
Posted by: Ed | January 27, 2010, 12:34 pm 12:34 pm
What’s wrong with Americans wanting a little more for ourselves? A lot of people have lost jobs, their homes, some, most or all of their savings and 401K’s through no fault of their own. Yet we send aid to all kinds to foreign countries who basically hate us while we have our own people starving and living on the streets. Why can’t the military budget be slashed and get us out of Iraq and Afghanistan? Stop policing the world and concentrate on our own. That’s just one budget. There’s a lot more wasteful spending that can be cut. I don’t think it’s so selfish for Americans who are tired of fighting and agonizing over how they are going to live to want some of the billions of their tax dollars that are exiting this country to better some other part of the world!
Posted by: ringo | January 27, 2010, 12:39 pm 12:39 pm
Posted by: Ed | Jan 27, 2010 12:34:22 PM
Under the constitution of US, states reserved the rights to govern their own, the only right washington has is to print money, the military, make deals with foreign countries, declare war and collect fed. taxes. But over the years washington has decided that they know better then the individual states and slowly TRY to take away state rights.
Posted by: Lizzie | January 27, 2010, 12:57 pm 12:57 pm
Actually, that is not true. Medicare and social security were programs needed to support the elderly, who were no longer capable of supporting themselves by working, and who had no OTHER resources, to draw upon.
These programs were started long ago, and have never been truly “updated” to a taxpayer owned account, into which they could pay into. That is not the fault of the elderly, but rather, the government, who never changed the program.
Most of Obama’s proposals, have actually targeted the elderly with cut backs, while expanding entitlements into totally new areas, including his health care proposals, which would, in fact, expand the the entitlements programs far beyond what Medicare and social security provide the elderly.
Mr. Elmendorf’s statement is nothing but political spin, for Obama.
Posted by: Rick McDaniel | January 27, 2010, 12:59 pm 12:59 pm
Rick wrote:
“programs needed to support the elderly, who were no longer capable of supporting themselves by working, and who had no OTHER resources, to draw upon.”
For thousands of years, families have taken care of their own.
Did families suddenly disappear during the ’30s?
Its not that the elderly had no other resources after they could no longer work.
Its that politicians wanted to PRETEND the elderly had no one but government to count on, so that they could create a dependent group of reliable voters.
Posted by: Joe White | January 27, 2010, 1:25 pm 1:25 pm
Ringo, there is nothing wrong with Americans wanting a little more for ourselves! I just don’t what it as a handout from Uncle Sam. If it comes from the government, my getting a little more came at the expense of someone else getting a little less. I want the government to get out of my wallet so I can keep more of what I earn. If that means they must spend less, all the better.
Posted by: Don | January 27, 2010, 1:29 pm 1:29 pm
This is why Democrats are almost always doomed to have these cycles of boom and bust with voters. Americans get antsy and demand bigger government, then they buy the GOP panic about taxes, big government,” etc. and desert.
Posted by: matt | January 27, 2010, 2:08 pm 2:08 pm
“Americans want the govt to provide for them, they just don’t want to pay for it?? ”
What an insult. We have been paying for the govt to provide services for others who don’t infact pay taxes for a long, long time..and THAT is what is pi$$ing people off. An aquaintance told me this morning that her husband stands to collect 2 years of unemployment, and then emergency funds of some kind after that. Why should he look for a job? AS it is, his staying home saves them from having to pay a sitter. (she works.)The whole family is flying to fl. and renting a condo on the beach this summer. She feels like they are taking advantage of the system, but so is everybody else. You don’t get brownie points for being a martyr. So who decided that 2 yrs of unemployment with no strings attached was a good idea?..the same logic was used to give the banks money with no strings attached too, right?? The govt has no respect for the American people. I’m starting to think they keep our schools failing on purpose..an educated populace could prove to be very dangerous to indeed.
Posted by: cindy | January 27, 2010, 2:47 pm 2:47 pm
It should have been phrased “some Americans want stuff for free and don’t want to pay for it”. While most of us pay our taxes, pay our taxes and pay some more taxes others are content to get in the boat and ride down the lazy river while the rest of us are rowing our rears off.
And then the Politicians win office with the promise of helping those who can’t help themselves, rip into the rich and tell the middle class that they feel our pain.
Posted by: david | January 27, 2010, 4:17 pm 4:17 pm
People have forgotten that when social security was enacted we had older people starving to death.
People don’t pay attention to the HUGE amounts of money are going to defense spending on our military, on defense contractors and funding military purchases in Israel, Egypt, Pakistan…. the list goes on and on.
When I was in grade school – twenty kids in a classroom was unheard of, children at an early age need more teacher input. Here in Florida we have teachers with third graders teaching 35+ kids. And the republicans want to derail the class size amendment…
Our tax dollars are going to Halliburton, Blackwater, Israel, Egypt, Pakistan….
In this country people die from lack of basic health care because our government is so in the control of corporate money.
Posted by: frazzled | January 27, 2010, 6:07 pm 6:07 pm
Well gollywiggle ya’ll. I paid money to the government specifically for the purpose of ensuring a retirement income (social security) for myself and elderly medical care (medicare)so I wouldn’t have to worry about dying from lack of medical attention. The key to my percieved entiltlements is that I paid for these things my entire adult life. Now the gov’t says the money is gone. Seems like fraudulent mismanagement of my money to me.
Posted by: gollywiggle | January 27, 2010, 6:38 pm 6:38 pm