Progressives Produce "The People's Budget"

The other day the president gave the country a rather vague outline of the kind of budget he wants for next year, but it was short on details and left the Republicans joyfully claiming the Democrats were unable to right a budget that would solve the deficit problem and begin paying down the national debt. They said the only way to get the country back on track is to abolish Medicare, slash social programs, give giant corporations unneeded subsidies and further cut taxes for the richest Americans -- the Ryan budget plan.

Well, the Democrats have come up with a plan. The Congressional Progressive Caucus (CPC) introduced a plan yesterday that would erase the deficit in about 10 years (2021) -- which is about twenty years faster than the Ryan plan (which would take until 2040 to erase the deficit, if at all). And the CPC plan would do this without abolishing Medicare, without cutting Social Security benefits, and without cutting the social programs that are helping many Americans in this recession. It would also stimulate job creation.

The CPC calls their plan "The People's Budget" because it will help ordinary Americans instead of benefitting only the rich (as the Republican plan does). It is a plan that makes a lot of sense and is much fairer to all Americans.

The Democrats introduced this plan as an amendment to replace the Ryan plan in the House of Representatives. It was voted down by the Republicans because it would make rich Americans (and corporations) pay their fair share of taxes, eliminate subsidies for giant corporations, stop the wars in Afghanistan and Iraq, and make deep cuts in the Defense budget -- all things the Republicans don't want to do.

The Republicans passed the awful Ryan budget plan instead, but it is as good as dead on arrival in the Senate. When the Senate gets through with it, it will look a lot different -- and hopefully it will look much like the CPC plan. At least I hope so, since it makes more sense than anything else I've heard coming from Congress (or the White House).

Here are the main points in the excellent plan put forward by the Congressional Progressive Caucus (and you can read the whole thing at this site):

Budget’s Bottom Line

•Deficit reduction of $5.6 trillion 

•Primary spending cuts of $869 billion 

•Net interest savings of $856 billion 

•Total spending cuts of $1.7 trillion 

•Revenue increase of $3.9 trillion 

•Public investment of $1.7 trillion 

•Budget surplus of $30.7 billion in 2021, debt at 64.1% of GDP.

Overview of Our Policies

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)