THINK PROGRESS — The Progress Report
by Faiz Shakir, Benjamin Armbruster, George Zornick, Zaid Jilani, Alex Seitz-Wald, and Tanya Somanader
Today, President Obama will deliver a wide-ranging speech laying out a strategy to deal with the U.S. budget deficit. Although the exact policies that he will endorse are unknown, he is expected to lay out a vision that will alter the country’s entitlement programs and call for high-income earners to pay more taxes. In addressing the U.S. debt, Obama is entering an increasingly heated debate about how to address our long-term deficits in a way that does not shoulder Main Street Americans with undue burdens or hinder job growth. On one side, conservatives are proposing cruel plans that would sacrifice the services and investments in America’s great middle class while asking nothing more from the wealthiest among us. On the other side, a growing number of progressives are demanding fair sacrifice that protects our crucial needs while demanding fair sacrifice from those who are richer than ever. The path that we choose will determine the very kind of country we will have in the future: one where only the wealthiest among us have opportunities or one that enshrines the American Dream — the idea that anyone, no matter what their background, can work hard and succeed.
EXPLAINING THE DEBT: To understand the most responsible way to tackle our long-term deficit problem, it’s important to first understand exactly what the challenge of the debt is and what caused it. Interest rates and inflation are currently low, and addressing unemployment is a far more pressing immediate problem. A March 2010 CBS News poll found that 51 percent of Americans said that jobs/economy is the most important problem facing the country, and only seven percent said the deficit was. Still, we should address the $14.2 trillion debt and the $1.3 trillion budget deficit over time, as doing so is crucial to our long-term economic health. In the short-term, there are a handful of major factors driving our debt. This includes the cost of two wars, a runaway defense budget, the Bush tax cuts for the wealthiest Americans, taxes on the richest Americans being the lowest in a generation, and a recession caused by the lack of regulation of Wall Street. The greatest long-term driver of our debt is health care costs, with our “possibly most inefficient” system in the world having us spend more than any other country in the world on health care with worse results. Thus, long-term deficit reduction plans that do not seriously deal with these causes of the current debt are avoiding the key issue.
EMACIATING MAIN STREET, ENRICHING THE RICH: Conservatives in Congress and the right-wing intelligentsia have unleashed a flurry of deficit reduction plans in recent months, which both continue to enrich the wealthy with massive tax cuts and which take aim at programs and investments for Main Street — solutions that were tried under the previous president and failed. In House Republicans’ much-touted budget resolution, H.R. 1, some of which made it into the recent budget deal to keep the government open, they dramatically cut Pell Grants, Head Start, foreign aid to children suffering from malaria, and other programs that benefit ordinary people, but are in no way the cause of our modern deficits. House Budget Committee Chairman Paul Ryan (R-WI) upped the ante when he released his FY2012 budget, which continues to call for massive and crippling cuts to the Pell Grant program, slash the Food Stamp program by $127 billion over ten years, effectively privatize Medicare, and likely increase taxes on the middle class while dramatically cutting them for the rich and corporations, actually making taxes on the rich lower than at any other time since Herbert Hoover’s presidency. At the end of the day, Ryan’s budget would leave the safety net in tatters, investments in Main Street severely under-funded, and would have seniors paying the majority of their income for health care, destroying the promise of Medicare — a system that Americans actually want expanded, not crippled. And while these conservatives are quick to ask Main Street to pay for debt that it did not primarily cause, they have no problem exempting some of the nation’s biggest dirty energy corporations from fair sacrifice. Last month, House Republicans effectively said “so be it,” as they voted in lockstep to protect billions of dollars in corporate welfare for Big Oil.
THE PROGRESSIVE PATH: While conservatives seem intent on blaming the poor, the sick, the elderly, and the middle class for deficits that they did not primarily cause, progressives are promoting plans that tackle the deficit by promoting fair sacrifice and responsibility. The CAP report “The First Step: A Progressive Plan for Meaningful Deficit Reduction” lays out a number of progressive deficit reduction steps that rely equally on raising revenues and cutting spending. It calls for implementing a graduated surtax on adjusted gross income for households making more than $1,000,000 a year, imposing a $5 per barrel fee on imported oil, and other measures that, when combined with spending cuts like wasteful tax expenditures, subsidies for Big Oil, a downsized defense budget more appropriate to our needs, and other measures, would yield single-year deficit reduction of $255 billion. This plan would stabilize the debt situation by 2015. This plan would stabilize the budget situation by 2015. Meanwhile, the Congressional Progressive Caucus (CPC) has put out its own budget proposal, called “The People’s Budget,” which if enacted would reach primary balance in 2014 and result in a budget surplus by 2021. The major proposals within the budget include, but are not limited to, enacting a millionaire’s tax, initiating a progressive estate tax, ending corporate welfare for the dirty fuels industry, reining in the defense budget, and enacting a public option in the health care system as well as authorizing Medicare to negotiate with drug companies for lower drug prices. Economist and Director of the Earth Institute at Columbia University Jeffrey Sachs notes that the CPC budget is a “truly centrist initiative,” if judged by American public opinion. Progressive economist Dean Baker has proposed allowing Medicare beneficiaries to seek care overseas, taking advantage of cheaper health care systems. Baker estimates that if fifty percent of Medicare beneficiaries opted for this globalized option, then taxpayers would save more than $40 billion a year by 2020. Additionally, there are numerous proposals for a financial transactions tax — which would ask that some of the very same banks that caused the global financial crisis would be responsible for helping us pay for it. A Dean Baker analysis of these plans finds that a “0.25 percent tax on trades of stocks, bonds, derivatives, and other Wall Street financial instruments…would easily raise between $50 billion and $150 billion annually,” while doing little to actually harm economic productivity. While there is healthy debate among progressives about these ideas, they make one thing clear: there is a way to reduce long-term deficits that does not have to unduly harm Main Street America and that asks for fair sacrifice that includes the richest among us.
In a profile of ThinkProgress, Politico’s Ben Smith and Ken Vogel report that “the Center for American Progress [Action Fund] newsroom has no parallel on the national stage,” describing it as “liberal infrastructure for reporting, research, and hammering home a message that the right is scrambling to match.” “We report from a progressive perspective. We wear that ideology proudly,” TP editor-in-chief Faiz Shakir said.
“Some Republicans are already squirming” over Rep. Paul Ryan’s (R-WI) 2012 budget, which would restructure Medicare to the point of irrelevance, and cut $6 trillion in spending over ten years. A “significant number of Republicans realize that embracing the Ryan plan may be one of the most treacherous votes of the year,” so they’re hedging ahead of an upcoming vote on the plan.
The budget compromise to avoid a government shutdown includes deep cuts in spending at the Environmental Protection Agency. Though Republicans were ultimately unsuccessful in ending the EPA’s ability to regulate greenhouse gases, they did cut $1.6 billion from its budget, a 16 percent reduction from last year.
The business lobby “won key concessions” in the budget deal reached last Friday by striking Sen. Ron Wyden’s (D-OR) “free-choice” health care voucher program — which passed months earlier — from the bill. According to Wyden, the Business Roundtable — a powerful lobby made up of CEOs from the country’s biggest companies — was driving the elimination of the program in a “textbook case of special interests prevailing.”
Today, First Lady Michelle Obama and Vice President Joe Biden’s wife, Dr. Jill Biden, will launch the “Joining Forces” campaign, a new initiative to encourage institutions, businesses and individuals to do more to address the needs of military families. Joined by various celebrities, they will travel first to Camp Lejeune in North Carolina, then Texas, Colorado, and Ohio “to raise public awareness.”
President Obama penned a letter to federal employees yesterday “thanking them for enduring days of anxiety during the budget crisis that was resolved just in time to avert a government shutdown.” Obama wrote, “You do your jobs without complaint or much recognition. But it is men and women like you who help make America all it is.”
Sen. Jon Kyl (R-AZ) called President Obama’s goal of a nuclear-free world “loopy” yesterday, saying Obama’s nuclear weapons strategy was based on “trying not to offend the Russians.” Kyl, who led opposition to a new START treaty last year, also said it would be a “very large mistake” to partner with Russia on missile defense.
And finally: A good writing utensil is hard to find, as even heads of state know. So when Czech President Vaclav Klaus saw a pen he liked at a signing ceremony with Chile’s head of state, the Czech leader pocketed the pen, a theft caught by TV cameras and now immortalized in a viral YouTube clip. The “last time America paid attention to Klaus, he was denying climate change on Glenn Beck’s TV show.”
Calvin Coolidge lives on in Paul Ryan’s budget.
Vouchers make a comeback, but why?
California dreaming — about a national popular vote bill.
Conservatives’ fifty-year war against Medicare.
On budget deal, Republicans once again break their own 72-hour rule.
Corporate tax holiday an even worse idea the second time around.
American drug consumers contribute $40 million a year to deadly cartel operatives.
Is it so hard to imagine a southerner winning the GOP presidential nomination?
“Bank of America will pay no Federal taxes for 2010, instead receiving a refund of $1 billion.”
– The Street, 03/25/11
“We don’t need more revenue!”
— Sen. John Barrasso (R-WY), when asked about big corporations’ tax avoidance, 04/12/11