Common Sense Takes Courage: The CPC Budget
Today, the Congressional Progressive Caucus released its annual budget proposal -- the "Better Off Budget" (link not yet available). Budgets are numbing, grist for geeks, not citizens. This budget is no exception, detailing row after row of numeric projections. Produced in conjunction with the Economic Policy Institute, it is a technician's document, based on a sound economic model.
But amid the numbers, budgets display our values, what we consider important, what we consider fair, how we address our future. Taken together, the blizzard of numbers provides a pointillist portrait of the society we would build.
And here, the CPC budget offers a vivid contrast both to the course plotted by the Republican House budgets of Rep. Paul Ryan and the cautious course followed by the White House. It is a testament to the vision of CPC co-chairs Rep. Keith Ellison and Raul Grijalva, and the work of many members including Reps. Jan Schakowsky, Jim McGovern, and Rep. Jim McDermott.
The CPC's focus is to put Americans back to work. It estimates that its budget will create nearly 9 million jobs by 2017, bringing unemployment down to 5.5 percent and moving us closer to the full employment economy necessary to begin to lift wages across the board. It offers middle- and low-income Americans a tax break in the first three years to help boost consumer demand and the economy.
Its essential strategy is to invest in areas vital to our future, putting people to work on jobs that need to be done. The CPC would meet the challenge of repairing our decrepit infrastructure, and expand investments in R&D and renewable energy. It offers aid to states and localities to rehire police, fire fighters and rebuild public services. It creates jobs corps that would employ the young. It provides a major boost to educating our children, with expanded appropriations for teachers, pre-K and rebuilding schools. And instead of shredding the safety net, as Republican budgets demand, it would strengthen it, protecting veterans, expanding child nutrition and food stamp programs, providing seniors with a responsible cost of living adjustment that expands their benefits to meet their costs rather than decreases them. It strengthens health care reform, while opening the way for states to move to single payer systems like Medicare for All.
Then, rather than duck how it would pay for its reforms as the Republican budgets do, the CPC details progressive tax reforms and spending cuts to pay for the reforms while paying down the national debt.
The tax reforms are designed to insure that the rich and corporations pay their fair share of taxes. The CPC would hike taxes on millionaires. It would close oversea tax dodges, thus requiring multinationals to pay taxes at the same rate as domestic corporations. Investors would pay the same tax rates on their investment income as workers on their wages. It would end subsidies to Big Oil, the giveaways to Big Pharma, and limit subsidies to agribusiness. The 10 biggest financial institutions would pay a special tax, designed to limit their competitive edge over smaller banks, while repaying taxpayers for the privilege of being too big to fail. (This endorses the proposal contained in Republican Rep. Dave Camp's tax reform bill.) The CPC budget would also tax bads, rather than goods. It would levy a financial transaction tax to help curb destabilizing speculation. It would impose a carbon tax, with rebates to low-income households, vital to meet the challenge of catastrophic climate change. This is the return of tax and invest Democrats.
Three takeaways from this budget:
It would make America better
The CPC recognizes an inescapable truth: after decades of the conservative era, we suffer public squalor amid Gilded Age private splendor for the few. We aren't making the investments vital to our future. If enacted, this budget would put Americans back to work and generate greater economic growth. The young would have a better shot at a job. The vulnerable would have greater security; the poor greater opportunity. A rebuilt infrastructure would be more efficient and safer. We'd come closer to providing the basics in education from pre-K to affordable college. The special interest plunder of our purse would be curbed. The Pentagon's waste reduced.
It is simple common sense
The budget's priorities are simple common sense. Its public investments are sensible, not lavish. Its tax reforms make the tax code fairer. The special interest subsidies it curbs are indefensible.
Common sense takes political courage
This budget puts it clearly. The rich must pay more; the multinationals can't dodge fair taxes. It takes on Wall Street, Big Oil, Big Pharma, the military-industrial complex, and agribusiness. It challenges all of Americans with a carbon tax. This isn't for the faint of heart. Americans say they want political leaders who will stand up to the special interests and have the courage of their convictions. Here is a common sense document that demonstrates that independence and that courage. It will come to a vote in the House. We will see how many are prepared to stand up.
It is surprisingly conservative
This is the most progressive budget that will be introduced in the Congress. It contains bold reforms, but within a remarkably conservative fiscal frame. It devotes over $1 trillion more of the increased revenues from its tax reforms to debt reduction than to investment over 10 years. It projects an annual deficit of 1.6 percent GDP in 2024, far below a sustainable level of 2.5-3 percent. The CPC rightfully challenges the destructive austerity policies of the last years, calling for repeal of the sequester and the wrong-headed Budget Control Act. But it responds to the alarms of the deficit hawks. Wall Street will howl at the tax proposals, but bankers should be pleased at the emphasis on deficits.
It is only a first step
The CPC budget is a bold statement that explodes the limits of the current debate. But it is only a first step. Its reforms make America better, but do not add up to a full social contract. It moves towards but does not fulfill the Economic Bill of Rights Roosevelt promised in World War II. It boldly raises taxes, but would collect only 21.5 percent of GDP in revenues by 2024. (Up from a little more than 17 percent now). It makes essential investments, but essentially allows spending to expand only with the economy ( from 22.7 percent in FY 2014 to 22.9 percent in FY 2024). Even with state revenues and spending added in, America would remain far below the European level of social provision.
That is the final irony. The CPC budget will be embraced or damned for its call for dramatic reform. But it is basically common sense within a cautious framework. It argues we should invest more in vital areas -- and waste less on special interests and unneeded programs. Ask the rich and the corporations to pay more in taxes so we can afford the programs we need. And do more to pay down our debt and reduce our annual deficits.
The CPC's Better Off Budget shows that we aren't broke. We can make the investments we need while paying down our debt. All that is needed is the courage to take on the big money and entrenched interests that corrupt Washington. And that, of course, may be a bit of the rub.
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This has been reposted from The Huffington Post.
