politics | Progressive Input in the Budget Debate: The People's Budget

The Real News Network - "The People's Budget"

One of the complaints the progressive blogosphere commonly levels against the Democratic leadership in DC is about negotiating strategy. Generally, the complaint is that the Democratic leadership in Congress and in the White House make opening bids that are already compromises, which results in final legislative deals skewing further to the right than necessary. Perhaps the most frequent specific example of this complaint is that Democrats in Congress should have started the health care debate by proposing a single-payer plan, and might have ended up with a public option in the final bill as a result.

Whether or not you agree with that complaint in either the general or the specific, if it is applied to the budget fight the Democratic leadership in DC should have started with The People's Budget (PDF), which the Congressional Progressive Caucus introduced today. It's a budget that produces a surplus by 2021 without cutting services for the poor and middle-class. It thus provides a stark contrast with the recent proposal by Rep. Paul Ryan, and a left-flank to the principles outlined by President Obama.

Here's a general overview of the People's Budget:

Reduces unemployment—and thus the deficit—through extensive investment in infrastructure, clean energy, transportation and education;
Ends almost all the Bush tax cuts, creates new tax brackets for millionaires and new fees on Wall Street;
Full American military withdrawal from Iraq and Afghanistan, along with other reductions in military spending;
Ends subsidies for non-renewable energy;
Lowers health care costs through a public option and negotiating Rx payments with pharmaceutical companies;
Raises the taxable maximum on Social Security.MORE

The People's Budget by Jeffrey Sachs (on Huffington Post)

Just when it seemed that all of Washington had lost its values and its connection with the American people, a bolt of hope has arrived. It is the People's Budget put forward by the co-chairs of the 80-member Congressional Progressive Caucus. Their plan is humane, responsible, and most of all sensible, reflecting the true values of the American people and the real needs of the floundering economy.

Unlike Paul Ryan's almost absurdly vicious attack on the poor and working class, the People's Budget would close the deficit by raising taxes on the rich, taming health care costs (including a public option), and ending the military spending on wars and wasteful weapons systems.
There are now four budget positions on the table. Far to the right is Paul Ryan's plan, an artless war on the poor that would take a meat-cleaver to Medicaid (health care for the poor), food stamps, support for child care, the environment, and the rest of government other than the military, Social Security, and Medicare (that is, until 2022, when the slashing would begin on Medicare coverage as well).

Ryan would keep taxes below 20 percent of GDP (specifically, 19.9 percent of GDP in 2021), at the cost of destroying entitlements programs and other civilian spending.

Then there is President Obama's budget, which is really a muddled proposal in the center-right of the political spectrum.

It would keep most of the Reagan-era and Bush-era tax cuts in place. Like the Ryan proposal, Obama's tax proposals would keep total taxes at around 20 percent of GDP. The result is a major long-term squeeze on vital programs such as community development, infrastructure, and job training. Also, Obama's plan never closes the budget deficit, which remains as high as 3.1% of GDP in 2021.
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The People’s Budget Gets a Boomlet of Praise

Predictably, the budget framework that Barack Obama outlined quickly became used as the leftward pole in the debate. After all, Obama gave a partisan speech! He criticized Paul Ryan! So with the Obama plan on the left and the Ryan plan on the right, the range of debate had been narrowed artificially.

But there is an actual budget plan on the left; several, to be precise. But one has legislative language and got 77 votes in the House. That would be the People’s Budget from the Congressional Progressive Caucus. This plan brings the budget into balance by 2021, with primary balance by 2014, without any cuts to social programs and even a modest but sustained stimulus package to create US jobs. It does so through progressive taxation, an end to two unnecessary wars in Iraq and Afghanistan and further cuts to the defense budget.

More specifically, it ends most of the Bush tax cuts and adds millionaire’s brackets. It taxes capital gains and dividends as ordinary income. It adds additional brackets to the estate tax to progressively tax the largest estates. It limits itemized deductions for high earners. It eliminates corporate welfare and adds a financial speculation tax on derivatives and foreign currency swaps. It includes the financial crisis responsibility fee proposed by the Obama Administration in early 2010. It adds a public option and institutes negotiation of prescription drug prices in Medicare and Medicaid. It increases the payroll tax cap to collect 90% of earnings on the employee side and eliminates it on the employer side.

It ends the wars, producing a savings of $1.8 trillion in the process. It makes deeper cuts in defense by reducing procurement and conventional forces. This provides all the money needed to institute a 10-year doc fix, patch the Alternative Minimum Tax so it doesn’t dip into the middle class, increase Social Security benefits, and invest $1.45 trillion in job creation through education, infrastructure and R&D.
If we’re going to have this talk about budgets, then, this is a pretty good place to start. It reflects the priorities of job creation and peace with a heavy dose of tax fairness. Whether or not official Washington calls it “responsible” or “courageous” is really besides the point, but at least some observers are, including no less than The Economist.

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