The House Progressive Caucus has shown the way to balance in the debate on how to avoid the sequester. It’s important to remember that the first “fix” was all program cuts, and the second “fix” reduced the proportion of program cuts from 100% to 70% — but the entire enterprise is still weighted to the GOP program-cuts side.
Here are the Progressive Caucus leaders, explaining this:
“Almost $2 trillion has been cut over the past two years from teachers, firefighters, police officers, loans for college students, and infrastructure investments,” Rep. Ellison said. “The American people shouldn’t continue to pay the price for massive tax breaks for millionaires and billions of dollars in subsidies to oil companies.”
“If one-to-one is really our goal, why don’t we make the entire budget and investment process one-to-one instead of restricting it to this current round?” Rep. Grijalva said. “We’ve cut non-defense budgets to the bone. There are simply no major savings hiding in school lunch or nurse training programs. We need investments. The Beltway refusal to make job creation our number one priority is a scandal, and the Balancing Act is the right way to fix it.”
Greg Sargent shows why even “winning” as defined within the Beltway is actually losing for Democrats:
Even if the parties reach a deal in the third round of deficit reduction to avert the sequester with something approaching an equivalent sum of spending cuts and new revenues, the overall deficit reduction balance would still be heavily lopsided towards Republicans. Yet they continue to insist on resolving round three only through cuts, anyway.
Here’s what an actual 50/50 split between cuts to programs and revenue would look like. Unsurprisingly, in order to even things up at this late stage, it’s revenue-heavy. It has to be:
The Congressional Progressive Caucus announced today that it is introducing legislation to cancel the automatic spending cuts — known as the “sequester” — that are scheduled to take place at the beginning of March. The CPC’s Balancing Act would replace the scheduled spending cuts with more than $900 billion in new revenues and nearly $300 billion in cuts to the defense budget.
The Balancing Act would result in $960 billion in new revenue, generated from closing tax loopholes for corporations and the wealthy. It ends the carried interest loophole that benefits wealthy hedge fund managers, closes tax loopholes that encourage corporations to send profits to offshore tax havens, ends the $4 billion in annual subsidies to Big Oil companies, and closes loopholes that benefit buyers of private jets and yachts. It also limits deductions for wealthy taxpayers and closes loopholes in the estate tax.
Of course, there’s lots of lobbyists working Capitol Hill hard for the Big Oil companies, as well as the private jet owners and estate-tax-worriers. So this plan also works to save some of the drastic cuts to the Pentagon. It would be wise for the defense industry to pay attention here:
The proposal also cuts $278 billion from defense spending, a dramatic reduction from the $500 billion in cuts the Pentagon would face under the sequester. Added together with previous deficit reduction efforts, the Balancing Act would equalize cuts to defense and domestic spending while also making the overall package of deficit reduction measures equal parts revenue and spending cuts….
There’s a chart at the link that shows how this works, and we really need to do things this way.
It’s time to compromise, people. And this 50/50 compromise is the best compromise for everyone.
The Balancing Act also includes investments into infrastructure and education meant to bolster the economic recovery. It would reinstitute the Making Work Pay tax credit, which would provide up to $800 to low- and middle-income families, for one year at a cost of $61 billion. It would also spend $55 billion on education investments — a measure the CPC says would prevent 280,000 teacher layoffs and modernize 35,000 public schools — and $160 billion in infrastructure investments. The CPC projects that such investments would create roughly 1 million jobs. Even with those investments, the Balancing Act would result in a total of $3.3 trillion in deficit reduction when added to already-enacted cuts and revenues.
Photo by vgm8383 under Creative Commons license