|To address our debt crises they themselves have drummed up all of them seem to be determined to push their ideal of austerity off on all of us. Despite the fact that working Americans are making less and seeing more of our nation's treasure horded beyond our reach their solution is to draw more blood from the turnip that has become the American working-class. The only problem with that is that we need recovery, not more sacrifice.
Now even President Obama has disappointed millions of us by joining the ranks of those who are calling for austerity and sacrifice from the wrong people. Those with nothing to give. He chimed into the deficit frenzy with his "chained CPI" scheme, designed to cut Social Security benefits for millions of Americans to achieve $340 billion in savings over ten years from those who do not have it:
Specifically, CBO and the staff of the Joint Committee on Taxation estimate that switching to the chained CPI-U on a governmentwide basis starting in calendar year 2014 would reduce the deficit by a total of $340 billion over the next 10 years. Such a change would decrease federal spending on mandatory programs (direct spending) by $216 billion and increase federal revenues by $124 billion over the fiscal year 2014-2023 period. (This estimate was first published by CBO on March 1. It is not an estimate of the proposal in the President's budget for fiscal year 2014, which would use the chained CPI for a more limited set of programs. CBO is currently reviewing that and other proposals in the President's budget.)
Switching to the chained CPI-U governmentwide would also lower benefits in other programs that apply automatic COLAs, including civil service and military retirement, Supplemental Security Income, and veterans' programs. In addition, the change would reduce federal spending for Medicaid, Medicare, higher education assistance, and nutrition programs, among other mandatory programs. In the case of certain means-tested programs, such as Medicaid and nutrition assistance, those reductions would occur in part because using the chained CPI U to make annual adjustments to the federal poverty guidelines would decrease eligibility for those programs.
But as bad as that is worse yet is the Republican wet dream to address our fiscal problems. A plan introduced by Paul Ryan which would include massive sacrifice from everyone but the wealthy and would create a $6 trillion hole off the top by refusing to ask the top 2% to contribute anything towards deficit reduction. This dishonest and selfish scheme would only raise $900 billion and would slam those with the least even harder than President Obama's "chained CPI" could ever dream of:
Even if their tax plan wasn't entirely dependent on $6 trillion worth of unspecified tax expenditure savings, the House Republican budget would still not balance within 10 years-unless they somehow manage to convince future Congresses to adhere to an unprecedentedly low level of spending in a category known as "nondefense discretionary." This category of spending has already been the focus of more than $1.1 trillion in cuts, but the Ryan budget calls for an additional $900 billion in reductions. To be clear, these would come on top of, not instead of, sequestration.
If these cuts were actually imposed, the result would be that nondefense discretionary spending would total just 2.1 percent of GDP by 2023. Since 1962, the first year for which we have comprehensive data, nondefense discretionary spending has never totaled less than 3.2 percent of GDP. In other words, Rep. Ryan's budget numbers depend on cuts that would bring this category of spending down to a level one-third lower than its previous lowest point in modern history. That is unrealistic, to say the least.
This category of spending includes most of the federal government's investments in economic growth; all of veterans' health care; food, drug, and consumer product safety; federal law enforcement; and many other vital public services. Of course, you might never know that by reading the documentation accompanying the Ryan budget. That's because it is far easier to "cut" the nebulous category called "nondefense discretionary" than it is to cut actual programs, benefits, and protections that the public knows and likes. But in fact, for these kinds of cuts to actually come to pass, Congress-now and in the future-will have to get specific. And if they decide that they can't, in reality, reduce these things to levels unheard of in generations, then Rep. Ryan's claim to a balanced budget falls apart.
So President Obama is calling for $340 billion in deficit reduction in the next ten years on the backs of Americans who cannot afford it and Paul Ryan is calling for $900 billion in the same time from virtually everyone and everything but the very few people he and his ilk truly represent but the one thing both seem to be ignoring? The very thing that the country needs and the one thing that is never attempted. True, Progressive reforms.
You see, it was not the senior citizen and working American that hopes to retire one day that President Obama's "chained CPI" is calling for sacrifice from that caused our nation's ills and ran up our debt. It was not everyone but the multimillionaire that Paul Ryan and his Republicans call for sacrifice from that did it either. The real culprit of our problems is the failed trickle-down economic vision and the greed of those who introduced it. It is far past time they sacrificed for their failure. They have enjoyed the only gains ever made by their greed and now it is their turn to solve the problems they caused.
A new report by the Economic Policy Institute shows just how that could happen if politicians in Washington simply cared about smart solutions for American problems. Instead of obsessing on ways to make average Americans foot the bill they could address the jobs crises and help the economy recover in the short term and enact Progressive ideals to raise substantial revenues to solve our debt for the long run. The federal budget policy analyst for EPI Rebecca Thiess explains:
"Addressing the nation's jobs crisis should be policymakers' chief priority, but unfortunately too much of our attention remains on deficit reduction," said Thiess. "However, if political constraints demand deficit reduction must occur, reductions achieved through revenue increases-specifically progressive revenue increases-are far less damaging to economic recovery than spending cuts. And there are numerous sound revenue policies that exist and should be considered in this debate."
As you can see, just a few of these options would not only raise much more revenue than the Obama and Ryan ideas but would not demand sacrifice from those who have already sacrificed and did not share in the prosperity that came crashing down. It would instead call for sacrifice from those who benefited from the artificial boom that crashed. They have long walked between the raindrops and it is their turn to get wet:
Reforming current income tax rates, creating additional brackets for top earners, and taxing capital gains as ordinary income, which would raise over $1.6 trillion in revenue over 10 years. These reforms would raise substantial sums of revenue and make the tax code fairer and more progressive, without unduly restraining economic growth.
Capping the marginal tax rate on itemized deductions ($513 billion). Limiting the rate at which itemized deductions reduce filers' tax liability would raise revenue, increase fairness and progressivity in the tax code, help mitigate income inequality, and improve efficiency.
Pursuing international corporate income tax reform, including repealing deferral of foreign profits ($606 billion). This change would target U.S. multinational corporations that engage in convoluted transactions to avoid paying the full corporate income tax. Such reforms would raise revenue as well as reduce incentives for firms to move and keep operations and profits offshore.
Just those three options would raise more than three times the amount of Obama's chained CPI and the draconian Republican vision of raping the American worker yet again. In fact, an even bolder dose of Progressive vision could result in a staggering $5.1 trillion in deficit reduction over the same ten year period:
The report also recommends taxing carried interest as ordinary income, eliminating the loophole allowing the wealthy to not pay taxes on inherited stocks and bonds, enacting a progressive estate tax, and enacting a financial transactions tax. Taken together, the policies could result in raising over $5.1 trillion in deficit reduction over 10 years (not including interaction effects among the eight policies).
Not only that but it would do something that desperately needs to be done for our country to truly recover from the blight of trickle-down idiocy. It would invest in our country and people, ALL OF THEM and ensure that more than just a few recover.
Politicians both Democrat and Republican can make all the excuses and come up with all the schemes they want but the fact of the matter is this. Our country has once again reached the point where the only thing that will ever solve our problems and bring our country back to greatness is true, Progressive vision and policy. Giving in or trying to compromise with the modern Republican Party as they attempt to return to their trickle-down idiocy will only make our problems worse because the simple fact is that too few people have too little to offer the economy for it to ever truly recover.
I know he truly means well but I sincerely wish President Obama would give up all this "compromise" and the hope to achieve some "grand bargain" with the devil that is the Republican Party. The only way for him to save his legacy is to stand up and fight for the Progressive vision that our country desperately needs. I for one would stand behind him in that noble crusade to the bitter end.