Thursday, 19 March 2015 00:00

The one sensible budget in Washington

Written by  Katrina vanden Heuvel | The Washington Post

This week, Washington descends into its annual budget brawl. House Republicans unveiled their plan on Tuesday, with Senate Republicans to follow Wednesday. Their hope is to pass a common budget resolution through both bodies by mid-April. Their incentive is that if — and that is a big if — Republicans in the House and Senate can agree, they can use the process known as “reconciliation” to pass various right-wing passions by majority vote, no filibuster allowed. The House budget plan, for example, calls for repealing Obamacare, partial privatization of Medicare, turning Medicaid and food stamps into block grants for the states, and tax reforms that lower rates and eliminate any taxation on profits reported abroad, turning the rest of the world into a tax haven for multinationals. The president can veto the appropriations bill containing these items, setting up another government shutdown melodrama. This is not the way to run a railroad, much less a government.

Budgets bore and numbers numb, so reporters tend to focus on the politics. The press now is touting the fight between so-called “deficit hawks” and “defense hawks.” The former want to adhere to harsh “sequester” spending limits this year and cut them even further in out years. The latter led by the dyspeptic Sen. John McCain (R-Ariz.) want to blow up sequester limits for the military. But this fight is more bluster than substance. The House budget plan squares the circle by adding some $94 billion to the military’s “Overseas Contingency Operations Fund” — the money spent on fighting wars abroad — that isn’t counted under sequester limits. The real story of the Republican budget is the triumph of the anti-tax hawks. With few exceptions, Republicans are committed to slashing the basic functions of government and programs that support education, food stamps, energy and R&D to avoid asking corporations or the wealthy to contribute even one more dime in taxes.

Too often neglected in this Beltway brawl is the budget alternative offered by the Congressional Progressive Caucus. The fifth annual CPC alternative — “The People’s Budget: A Raise for America” — is about as close to common sense as Congress gets. And it is honest: Its numbers are carefully laid out and add up. It actually says what it would invest in and how it would pay for it.

On the investment side, the CPC expands investments in areas vital to our future. It would rebuild America, modernizing our outmoded infrastructure. It would invest to lead the green industrial revolution that is already forging markets and creating jobs across the globe.

The CPC understands that we must do the basics in education. It would provide pre-K for every child, the most important single reform we can make in education. It calls for increasing investment in our public schools, helping to mitigate the destructive inequality between rich districts and poor. It would provide students with four years of debt-free college education, and pay for renegotiating existing student loans, relieving the burden now crushing an entire generation.

 

The CPC recognizes that more seniors are facing a retirement crisis. On budget, it would adopt an inflation measure for Social Security that reflects the rising costs seniors face in areas like health care. Off budget, the CPC calls for expanded Social Security benefits, paid for by lifting the income cap on Social Security payroll contributions. No longer would Donald Trump pay a lower rate in Social Security taxes than the police who guard his palaces.

The CPC would also expand the Earned Income Tax Credit and the Child Tax Credit, giving a break to low-wage workers and to parents struggling with the costs of childcare. And needless to say, the CPC would defend Medicare and Medicaid, not privatize it, and strengthen health-care reform, not eliminate it.

The People’s Budget details how to pay for these vital investments while slowly reducing the national debt as a percentage of the economy. The basic theory is to raise revenues by taxing what we want less of and save by cutting spending we can do without.

We now suffer dangerously extreme inequality, so the CPC would increase taxes on those who make $1 million or more. High-frequency trading on Wall Street is dangerously unstable, so the CPC would levy a small tax on speculation to slow it down. CEO pay has soared while workers haven’t shared in the profits they have helped to generate, so the CPC would end the loophole that allows companies to write off obscene bonuses and stock options as a business expense.

Catastrophic climate change is, even according to the Pentagon, a clear and present danger. The CPC budget would levy a carbon tax, allowing the market to allocate carbon reduction. Much of the revenue is devoted to a rebate so that lower-wage families are made whole from the change.

In cutting waste, the CPC turns to where the money is, calling for a relatively modest reduction in military spending over time. It would repeal the ridiculous law that bans Medicare from negotiating bulk discounts on drugs. It would curb insurance company gouging by giving consumers a public option in health care. It would end the pernicious and wasteful subsidies to oil and gas companies.

And it would rescue millions from of the shadow economy with comprehensive immigration reform, saving nearly $200 billion over a decade according to Congressional Budget Office projections.

 

What the CPC budget shows is what Washington too often suppresses: There is an alternative. We can afford to build a society that reflects the values and priorities of most Americans. We only have to choose to do so.


Read more from Katrina vanden Heuvel’s archive or follow her on Twitter.

Original article on The Washington Post

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