The Super Committee’s Gridlock

Congress’ self appointed Super Committee announced its failure to come to an agreement on a deficit reduction plan after the markets closed yesterday.  The Dow had already plunged 2% on reports there would be no agreement.  The closed door Politburo was appointed last August as part of the debt ceiling deal to find $1.2 trillion in additional budget cuts and revenue enhancements.  Pending no agreement a clause in that bill kicks in mandating an across the board 10% cut across federal programs.  The Pentagon is having a hissy fit saying they won’t be able to defend the country on a budget which allowed them to do so in 2007.

Pat Toomey tried pushing through an agenda calling for $1.5 trillion because he wasn’t happy just cutting $1.2T.  The cuts done earlier are already impacting the poor and these new ones will result in being dying.  Winter looms with substantial cuts to LIHEAP, food stamps, WIC and other social safety net programs for the poor, unemployed and disadvantaged.  These cuts do real damage to real people.

Republicans refused to budge on tax increases and the closing of special interest loopholes.  They proposed about $3 billion in tax increases compared with $500 billion in budget cuts and, still,t hat wasn’t enough.  Democrats put sharp cuts to both Social Security (which doesn’t add a cent to the deficit) and Medicare on the table but conservatives wouldn’t play ball.  This is the Tea Party, a fringe minority of Americans, pushing its extreme agenda on the rest of us.

Had the Committee proposed serious cuts to these critically important programs while leaving millionaires and billionaires untouched the 99% movement would have been outraged and the people taking to the streets would have been awe inspiring.  Not to mention chaotic.  Fox would have had more to pontificate about than trying to explain that pepper spray is actually a food product and so not dangerous.  In that case I’d like them to line up and allow me the pleasure of emptying a canister in their faces.  Of course perhaps they’d also allow me to serve them some mushroom soup from some food products I collect in the wild.

The real solution is called The People’s Budget:

Our Budget Eliminates the Deficit and Raises a $31 Billion Surplus In Ten Years

Our budget protects Social Security, Medicare and Medicaid and responsibly eliminates the deficit by targeting its main drivers: the Bush Tax Cuts, the wars overseas, and the causes and effects of the recent recession.

Our Budget Puts America Back to Work & Restores America’s Competitiveness

• Trains teachers and restores schools; rebuilds roads and bridges and ensures that users help pay for them

• Invests in job creation, clean energy and broadband infrastructure, housing and R&D programs

Our Budget Creates a Fairer Tax System

• Ends the recently passed upper-income tax cuts and lets Bush-era tax cuts expire at the end of 2012

• Extends tax credits for the middle class, families, and students

• Creates new tax brackets that range from 45% starting at $1 million to 49% for $1 billion or more

• Implements a progressive estate tax

• Eliminates corporate welfare for oil, gas, and coal companies; closes loopholes for multinational corporations

• Enacts a financial crisis responsibility fee and a financial speculation tax on derivatives and foreign exchange

Our Budget Protects Health

• Enacts a health care public option and negotiates prescription payments with pharmaceutical companies

• Prevents any cuts to Medicare physician payments for a decade

Our Budget Safeguards Social Security for the Next 75 Years

• Eliminates the individual Social Security payroll cap to make sure upper income earners pay their fair share

• Increases benefits based on higher contributions on the employee side

Our Budget Brings Our Troops Home

• Responsibly ends our wars in Iraq and Afghanistan to leave America more secure both home and abroad

• Cuts defense spending by reducing conventional forces, procurement, and costly R&D programs

Our Budget’s Bottom Line

• Deficit reduction of $5.6 trillion

• Spending cuts of $1.7 trillion

• Revenue increase of $3.9 trillion

• Public investment $1.7 trillion

Of course our real crisis and our first deficit problem is one of JOBS.  This budget situation was caused principally by three factors, all created by conservatives:  unpaid for wars in Iraq and Afghanistan, the Bush tax cuts and the failure of conservative trickle down economics.  The refusal to properly regulate markets, prosecute criminals on Wall Street and raise revenues by taxing the rich created the current deficit.

Conservatives (both Republican and Democrats) created this problem and are focused on it rather than the other one in jobs.  They have nothing to create jobs and, in fact, have made it worse by laying off hundreds of thousands of public sector jobs which support private sector employment.  The ripple effect is strangling growth and preventing a systemic recovery.

Congress needs to repeal the part of the debt ceiling agreement mandating cuts and also repeal the Bush era tax cuts for the rich.  Then they need to pass a significant stimulus designed to build infrastructure.

What is Pat Toomey Doing? Inequality and America’s Future

A blog post by Stephen Herzenberg, originally published at Third and State.

Let me connect three dots for you. Draw your own conclusions about the impact of Pennsylvania Senator Pat Toomey’s proposal in the super committee to reduce the federal deficit.

Dot Number 1 – The American middle class is shrinking: The New York Times reports this morning that the middle class is shrinking in America – based on where people live.  In 2007, the latest year studied, 44% of families lived in middle-income neighborhoods, down from 65 percent of families in 1970. A third of families lived in very high-income or poor neighborhoods now, up from just 15 percent of families in 1970. The case example used to illustrate this national trend – the Philadelphia metropolitan area.

Dot Number 2Toomey proposes to increase after-tax inequality further: In the super committee, Congressional Republicans, led by Senator Pat Toomey, have advanced a plan that they say would raise revenues by closing tax loopholes and eliminating tax breaks while cutting spending by $1.2 trillion. But a closer look shows that, of $3.5 trillion raised by the elimination of loopholes and tax breaks, $3.2 trillion would lower tax rates for the wealthiest. The plan would lower taxes at the top a lot more than simple extension of the Bush tax cuts for the very rich. So the impact of Senator Toomey’s proposal would be to increase economic inequality after taxes: affluent families would pay less in taxes and the middle class and the poor would face cuts in Social Security, Medicare, and other social programs.

Dot Number 3High inequality undercuts core American values (opportunity, democracy) and weakens our economy: High levels of economic inequality – such as now exist in the United States – undermine intergenerational mobility (also known as “the American Dream”). (For evidence, see the links in this earlier blog post on inequality or this one or see this online video by Richard Wilkinson.) Such inequality also contributes to the erosion of political democracy – shifting the country further from one person, one vote towards one dollar, one vote. And, third, high levels of inequality undermine economic and productivity growth. Let’s process that again: the end of the American Dream; the erosion of democracy (wasn’t America – and Pennsylvania – the birthplace of democracy?); and a weaker economy. Three strikes and you’re out.

Question Number 1Why? On a day when a national newspaper is using Philadelphia to illustrate the erosion of the middle class, why is Senator Toomey championing ideas that threaten the most cherished American values (opportunity, democracy) and the country’s future living standards? You’d have to ask him.

Pelosi Vows to Protect Medicare & Social Security

House Minority Leader Nancy Pelosi visited Santa Fe, New Mexico yesterday and told an audience at the Mary Esther Gonzales Senior Center she will not allow the Congressional Super Committee “to be a chopping block for” the programs.  She ridiculed Texas Governor Rick Perry for calling Social Security a Ponzi scheme and said Social Security shouldn’t even be used in the same sentence with deficit reduction.  Social Security has nothing to do with the federal deficit.

The unannounced visit with local Congressman Ben Ray Lujan and others provided a forum for the former Speaker to condemn those who were silent while the deficit was being amassed by former President Bush with tax cuts for the rich and two unfunded wars.  I do recall Speaker Pelosi voting to fund the Iraq War however.  

Social Security was put on the negotiating table by President Obama during negotiations on the debt ceiling even though it is self supporting, is safe until 2037 and can be expanded by lifting the cap on contributions.  In these harsh economic times the program should be expanded instead of cut back and as more and more Americans lose their pensions more of us are dependent on Social Security.  Lifting the cap on incomes subject to taxation would solidify Social Security and allow an expansion of benefits.

Medicare is in trouble because of runaway health care costs.  The President’s bill will do little to rein them in and does nothing to provide a public option for those mandated to buy insurance from for profit, private corporations.  Expanding Medicare by adding benefits and making it a national single payer plan solves those issues, gives access to quality medical care to every person and ends the runaway costs adding to the deficit.

The solutions to both deficit reduction and health care costs adding tot he deficit are real and actual and reasonable.  They can be accomplished by passing The People’s Budget and help Americnas rather than hurting them.  Nancy Pelosi’s visit to Santa Fe was welcome and her words important.

Note:  I am visiting Santa Fe, New Mexico.

Toomey Joins Super Committee “Politburo”

Sen. Pat Toomey who voted against the Budget Control Act because it didn’t go far enough was named to the Congressional Super Committee today by Mitch McConnell.  Toomey sponsored a bill requiring the government to pay China before retirees, veterans and orphans if a debt ceiling bill isn’t passed.  He, of course, worked for a Hong Kong billionaire at one time.  He also headed the virulent anti-tax Club For Growth for many years before running for Arlen Specter’s seat.  His presence on this Committee guarantees gridlock over raising revenues meaning no agreement likely will be reached before Thanksgiving.  Of course Democrats are placing Max Baucus on it also and he will readily cave in to fellow conservatives.  Things aren’t looking good for our republic.  Voting for Pat Toomey was a vote for severe economic calamity.