Now For Something Completely Different: A Few Thoughts on US’ Budget Battle

This space is normally devoted exclusively to the Middle East. But the absolute insanity that has gripped Washington all of my life has reached a new height these days, and so I break here with “something completely different.”

At this writing, Congress has authorized spending cuts of $38 billion, and sent a bill to the President so that the government can continue operation until September.

“There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires. And I don’t think there’s anything courageous about asking for sacrifice from those who can least afford it and don’t have any clout on Capitol Hill.”

As is so often the case with this president, the words sound good, but the actions don’t match the rhetoric. Obama and the Democrats in Congress are faced with Republicans in overdrive; the GOP is rushing to squeeze the few pennies poor and middle class Americans have left for no better reason than to make the rich even richer.

There are many ways to control our national debt and budget deficits and simultaneously not only maintain the living standards of working people, but substantially improve them. Those ways include progressive income tax and an end to corporate welfare (both, I hasten to add, ideas that are much more in line with capitalist philosophies of Adam Smith and the like than our current system) as well as public health care and ending the costly and futile wars the US is fighting in Iraq and Afghanistan.

Those ways are being presented to the American people by our own Congress, but no one is listening. The Progressive Caucus, the largest Caucus in Congress, boasting 80 members, has come up with what they call “The People’s Budget.” I find the name unfortunate, because it is going to alienate many of the poorer Americans it should be reaching out to, but the budget itself is sound, both economically and morally.

I’ve pasted the summary of the budget below, and you can follow the links above for the full budget and an independent analysis of it.

But the real point here is that these ideas are not seriously considered and discussed. And we can’t just blame the evil corporate media for that, or our craven leaders in DC. We progressives are the ones who never reached out to working class Americans who have been told time and again that what’s good for the proverbial “US Steel” (substitute any other corporate giant today) is good for the country.

The Tea Party tapped into grassroots, often working- and middle-class people and stole their energy, diverting it into policies that only make their supporters’ desperation worse while increasing the flow of wealth to the top. At least in some measure, that’s because we haven’t offered alternatives in a way that appeals to those folks.

As is often the case, the ideas below would benefit the overwhelming majority of Americans, yet a very large portion of those very people are the most passionately against it. Maybe we should figure out how to change that. If we do, the implementation of good ideas like this one will follow easily.

The People’s Budget

Budget of the Congressional Progressive Caucus

Fiscal Year 2012

Individual Income Tax Policies

• Allow the Bush-era tax cuts to expire at the end of 2012, but extend marriage relief, credits, and

incentives for children, families, and education

• Immediately rescind the upper-income tax cuts in December’s tax deal

• Index the AMT for inflation for a decade (the AMT patch is fully paid for)

• Schakowsky millionaire tax rates proposal (adding 45%, 46%, 47%, 48%, and 49% top rates)

• Tax all capital gains and qualified dividends as ordinary income

• Progressive estate tax (Sanders’ estate tax, repeal of Kyl-Lincoln)

• Limit the rate at which itemized deductions can reduce tax liability to 28%for high earners

• Replace the tax exclusion for interest on state and local bonds with a subsidy for the issuer

Corporate Tax Reform

• Tax U.S. corporate foreign income as it is earned

• Eliminate corporate welfare for oil, gas, and coal companies

• Enact a financial crisis responsibility fee

• Financial speculation tax (derivatives, foreign exchange)

• Reinstate Superfund taxes

Health Care

• Enact a public option

• Negotiate Rx payments with pharmaceutical companies

• CMS program integrity and other Medicare and Medicaid savings in the president’s budget

• Prevent a cut in Medicare physician payments for a decade (maintain doc fix)

Social Security

• Raise the taxable maximum on the employee side to 90% of earnings and eliminate the taxable

maximum on the employer side

• Increase benefits based on higher contributions on the employee side

Defense Savings

• End overseas contingency operations emergency supplementals starting in Fiscal Year 2013,

providing $170 billion in FY2012 to fund redeployment, while saving more than $1.8 trillion

from current law spending levels over ten years.

• Reduce baseline defense spending by reducing strategic capabilities, conventional forces,

procurement, and R&D programs

Comprehensive Jobs Program

• Invest $1.45 trillion in job creation, education, clean energy and broadband infrastructure,

housing, and R&D

• Infrastructure bank

• Surface transportation reauthorization bill ($213 billion)