Professional Documents
Culture Documents
IN THIS ISSUE:
AUGUST 2012
August . . . . . . . . . . . . . . . 1 Working Wisconsin . . . . . 2 SISU . . . . . . . . . . . . . . . . 3 An Elephant . . . . . . . .. . . 4 13 Bankers . . . . . . . . . . . . 5 Tax Pledge Cult . . . . . . . . 6 Spaceship Earth. . . . . . . . 7 Wealth and Money . . . . . 8 Challenging The Myth . . . 9 Peoples Budget . . . . . . 10
It is August in Wisconsin and the corn is high - but it is also very dry. Like much of the U.S., we are in a drought. One can hardly remember the last rain to grace our state. But life goes on and despite the heat, it is beautiful in Wisconsin in August. Fresh tomatoes, beans, cucumbers, and early local corn are on the tables. The richest of men have no better fare. The primary elections are just days away, and then it will be on to the final races in November. There will be hard fought political battles, and we know by now there is often little to be proud of in the commercials and rhetoric that will bombard our television screens. If we are united on anything, it is probably our common disgust with the Supreme Courts Citizens United decision to grant corporations personhood and allow virtually unlimited funding of campaigns. Whether one is conservative or progressive, this decision is seen as an assault on democracy. Let us hope that the movement for a constitutional amendment to overthrow Citizens United grows, but in the meantime, let us strive for a sense of community, respect, and fairness throughout our state. We have published the Progressive Caucus Budget at the end of the newsletter again this month. Several people expressed appreciation for the document and we feel it is one of the few economic proposals that genuinely shows a path to prosperity for all Americans.
Middle Wisconsin News welcomes letters, articles and essays on relevant topics. We ask that you limit submissions to 800 words and provide sources when appropriate. Submissions may be edited for length, clarity and taste. Emailed submissions should be sent in plain text or Microsoft Word attachments to: dave@middlewisconsin.org
2011Middle W is c ons in
Working Wisconsin - Labor News and Views When Did We Become a Nation That Embraces the Misery of Others?
By John Spiegelhoff - Merrill, WI Equality of opportunity is not enough. Unless we create an environment where everyone is guaranteed some minimum capabilities through some guarantee of minimum income, education, and healthcare, we cannot say that we have fair competition. When some people have to run a 100 metre race with sandbags on their legs, the fact that no one is allowed to have a head start does not make the race fair. Equality of opportunity is absolutely necessary but not sufficient in building a genuinely fair and efficient society. Ha-Joon Chang, Twenty-Three Things They Don't Tell You about Capitalism The best way to boost the economy is to redistribute wealth downward, as poorer people tend to spend a higher proportion of their income. Ha-Joon Chang, Twenty-Three Things They Don't Tell You about Capitalism There is a word in the German language which defines the current discourse expounded by the extreme Republican right. The word is schadenfreude or translated into English as The Joy of Others Misery or Misfortune. I was astonished the other day to read that the Republicans wanted the economic outlook to worsen so that it would increase their chances to have Willard Romney (aka the man who looked like he walked off a Monopoly game) elected as president this coming November. Hold on a minute-the Republicans want our fellow countrymen to suffer to achieve their political ambitions. This is quite analogous to Walkers comment to divide and conquer by pitting worker against worker with the ultimate goal to drive down wages and benefits for the benefit of corporations. Schadenfreude. The Affordable Health Care Act allows for ordinary people to have health insurance. For example, one of the most desirable aspects of the Affordable Health Care Act is that insurance companies cannot deny health insurance due to preexisting conditions. This is for the common good of our friends, neighbors and communities. However, the Republicans seem to not believe in the common good. Their sole mission now is to repeal the Affordable Health Care Act and maintain the status quo with no alternative health care plan to help our friends, neighbors and communities Another example of schadenfreude. It is just simply inconceivable that a working person can vote for a political party that favors corporations over communities and profits over people. It is, however, plain to see how the Republicans have managed to convince ordinary working people to vote against their selfinterests- promise them things will get better. But they have no plan other than to reward corporations. However, thirty years of Republican policies has produced the most massive division of wealth this country has ever experienced. It is an old and worn carrot. We must say no to the politics of division. We must engage our elected officials and demand respect and fairness. We must vote against those who engage in the politics of schadenfreude.
2011Middle W is c ons in
There is a tendency to think that what we see in the present moment will continue. We forget how often we have been astonished by the sudden crumbling of institutions, by extraordinary changes in peoples thoughts, by unexpected eruptions of rebellion against tyrannies, by the quick collapse of systems of power that seemed invincible. --Jean Houston
Recently, I have watched and listened to Bernie Sanders speech on the floor of Congress, Bernie Sanders Storms the Senate Floor and Challenges Congresss Koch Whores, on June 27th many times. Bernie Sanders doesnt mince words!! Here are my thoughts: I lived through the Vietnam era and the tumultuous 60s. I sobbed for days when President Kennedy was assassinated . I lived through the assassinations of Robert Kennedy and Martin Luther King, Jr. I watched as the two space shuttles exploded and the Twin Towers fell in disbelief and horror. I have seen ebbs and flows of our country throughout my adult years of 50 years, and I always believed my country was the beacon on the hill of democracy--a democracy that worked for all of us. To this day, I cannot hear/sing the National Anthem without tearing up because I know the sacrifices that were made by millions and millions of people for all of us. These sacrifices were made by: our service men and women who fought in wars--many were unjustified, poorly planned, and not paid for; our grandparents, parents, and previous generations who fought and sacrificed for me and future generations to bring a quality of life for all people in this country. I was educated, along with millions of others, by taxpayers willing to invest in public education who wanted a populace with critical thinking skills that would use these skills to solve our problems and use these skills for the benefit of future generations. I drive on safe roads paid for by taxpayers who believed that a transportation system--think of the interstate system which began under Eisenhower--is for the common good. The list goes on and on of what previous generations accomplished for the common good. I am the recipient of the vision those people had for America--one that works for all Americans. I believed that people were patriotic enough to see the value of these ideals set forward by all generations who came before me and would work for those ideals for future generations. I am one of those angry Wisconsinites/Americans Bernie Sanders spoke to in his speech. As I think about what this country has gone through during my 68 years, I always believed in the power of this country to solve our problems--until now!! I see the forces--so many of them that are beyond my control and my one-vote power. I truly see this country becoming an oligarchy as Bernie Sanders states. I see our state/US governments sold to the highest bidders. I see ALEC and the wealthy controlling legislation at the state level. I naively thought we elected representatives to write legislation that was meant to benefit all people in the state. I naively thought we could influence our elected officials with letters, phone calls, petitions, rallies on the street corners, and all that we have done at the grassroots level imploring our elected officials to act for the interests of all people. I naively thought our government worked for all of us. Never did I think our government was corrupt--until now. Mike McCabe of the Wisconsin Democracy Campaign speaks about legalized bribery. He says: Lets cut through the legal clutter and speak plainly. Giving tens of thousands of dollars to a campaign, or spending hundreds of thousands on a candidates behalf to influence his or her conduct in office is a bribe. Case in point: Diane Hendricks, a billionaire in Wisconsin who paid no state income taxes in 2010, donated a total of $535,000 to Walker during the recall. Yes, this is bribery and they arent ashamed of their actions. I see a system of democracy that worked for all of us being wiped away by something that is insidious and that will destroy democracy. Where does that leave me and the 99%? I keep wondering: How do we fight this? How do we fight for the ideals of democracy? How do we fight the Koch brothers who arent satisfied with billions, but as one of the Koch brothers stated: I want my share and thats all of it? How do we fight Grover Norquist who says: We dont need someone who thinks. We need someone with enough digits on one hand to pass their legislation. (Quote came from the article, Servant of the Radical Right--about what a Mitt Romney presidency and a Ryan budget would mean to this country--in the June issue of The Prospect.) In other words: a puppet. My Finnish heritage has a word that will not let me quit. That word is Sisu. It means stick-to-itiveness, persistence, stubborn determination, guts, tenacity, inner strength. I will join millions of others with Sisu to bring about change. Here is one suggestion for all of us: 1. If we are not involved in some sort of political organization, now is the time to get involved. There are so many groups needing our participation: We are Wisconsin, The Grassroots Network, Progressives United, The Wisconsin Democracy Campaign, the League of Women Voters, Wisconsin League of Conservation Voters, The Blue Hills Solidarity Network, The Democratic Party, to name just a few.
You dont do great things. You do little things with great love.
-- Mother Theresa
Professor George Lakoff got us thinking about elephants in his 2008 book. We learned how to frame an issue and how to use concrete words. We were shown how language is a powerful political tool. Conservatives use terms like tax relief and war on terrorism to get the public to think about issues their way. UC Berkeley Linguistics professor George Lakoff showed us how to use language to frame public debate in terms of progressive values which are the traditional American values. Lakoff has done it again for the 2012 elections in THE LITTLE BLUE BOOK, an essential guide to thinking and talking democratic and progressive language. He and Elisabeth Wehling, also of University of California, Berkeley collaborated on this book. Voters cast their ballots for what they believe is right, for the things that make moral sense. Yet Democrats continue to talk about policies rather than moral values. Republicans use moral language in concrete words while Democrats use abstract terms. Democrats like to use facts and figures. Yet policies only make sense as part of a morally based set of frames, most of which are unconscious. Democrats like to quote conservatives and argue against them with real facts. This does not work. If a conservative argues for cutting needless spending, liberals shouldnt argue against cutting needless spending. They should say what they believe: The economy needs an infusion of cash to put people to work rebuilding our infrastructure and growing our economy. (Lakoff, p. 37) By repeating the conservative language, we emphasize their frame, even though we think we are negating their argument. Use your own language; never use your opponents language. Be aware of what you believe and repeat it out loud over and over. Never repeat ideas that you dont believe in, even if you are arguing against them. Be positive. Be authentic. Say it simply. When you look for basic words, ask yourself: Have I seen it with my own eyes? Have I touched it or otherwise directly interacted with it? Have I smelled it or heard it? Can I take a pen and draw a picture of it? Can I enact it with my own body in a pantomime? (Lakoff, page 42) The easiest way to make policies understandable is to tell real stories, about people you know and about your family and friends or community. When you argue for a reform that will help seniors receive proper health care, share a story of an elder who struggles with lack of medication and poor care. Show how her struggles make you feel. THE LITTLE BLUE BOOK has wonderful advice to help you speak and write clearly and effectively.
2011Middle W is c ons in
13 Bankers
By Jeanne Larson - Phillips
Once you realize that trickledown economics does not work, you will see the excessive tax cuts for the rich as what they are -- a simple upward redistribution of income, rather than a way to make all of us richer, as we were told.
Ha-Joon Chang, Twenty -Three Things They Don't Tell You about Capitalism
It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.Henry Ford In 13 BankersThe Wall Street Takeover and the Next Financial Meltdown, published in 2010, co-authors Simon Johnson and James Kwak detail the economic history of the US. They warn that unless substantial reforms and regulations are instituted for Wall Street/big banks, we face another meltdown, only worse than the 2008 financial crisis and ensuing recession. This book is one of many that recount the massive greed and fraud that caused the 2008 financial crisis. Some reforms recommended: Split and limit the size of Too Big to Fail banks so that individual banks can fail without causing serious risk to the entire systemFDIC-insured commercial banks to 4 percent of Gross Domestic Product (GDP) and riskier investment banks to 2 percent of GDP. Enact laws and policies that effectively regulate the financial system from reckless borrowing and lending. Protect households and businesses from potentially abusive behavior of powerful banks. Sufficiently fund and back financial regulatory agencies. Wisconsin Republican Sean Duffys web site posted a video of his questioning of JPMorgans Jamie Dimon, implying that his tough treatment of Dimon shows Duffy is looking out for his constituents. Oaths are administered so that people can be prosecuted for perjury if they dont testify truthfully, but Dimon was not sworn in at this hearing. It is disappointing that Mr. Duffy, a former District Attorney, is not using his legal experience to effectively protect our interests. If he is your Representative, call Mr. Duffy at 202-225-3365, to ask him the following: Has he read 13 Bankers or a similar book to learn about the financial services industry? Will he require every head of a big bank to testify under oath at House hearings as to fraudulent practices? Will he sponsor legislation that will rein in the greed, excessive risk-taking and corrupt practices of Wall Street/big banks? Will he support funding of financial regulatory agencies? Will he guarantee that the $340,320 of campaign contributions the financial services industry (opensecrets.org) has invested in Duffys campaign to date will not influence his representation of the best interests of Wisconsinites in passing legislation that will lead to a more stable financial system?
2011Middle W is c ons in
When plunder becomes a way of life for a group of men living in society, they create for themselves, in the course of time, a legal system that authorizes it and a moral code that glorifies it.
- - Frederic Bastiat, French writer and economist, 1850
I Pledge Allegiance To The Flag Of The Wall Street Lords Of America And To The Predator Class For Which They Stand. Subjugated Masses Under domination, With Liberty and Justice For The Fit.
Ive often heard people say, I wonder what it would be like to be on board a space ship, and the answer is very simple. What does it feel like? Thats all we have ever experienced. We are all astronauts. I know you are paying attention, but Im sure you dont immediately agree and say, Yes thats right, I am an astronaut. I'm sure that you dont really sense yourself to be aboard a fantastically real spaceship - our spherical Spaceship Earth. Of our little sphere you have seen only small portions. However you have viewed more than did pre -twentieth century man, for in his entire lifetime he saw only one millionth of the Earths surface. Youve seen a lot more. - - R. Buckminster Fuller Operating Manual For Spaceship Earth
Our little Spaceship Earth is only eight thousand miles in diameter, which is almost a negligible dimension in the great vastness of space
- - R. Buckminster Fuller Operating Manual For Spaceship Earth
For a moment let us attempt to envision the reality of being aboard Spaceship Earth - to internalize being crewmembers of the ship - to understand that our continued well being depends upon the integrity of the ship and the well being of our fellow crewmembers. Thinking as diligently as we can in this frame of mind . . . . . . . . . . . . Would we ever consider polluting our water supply? Would we require crewmembers to consume valuable finite resources as quickly as possible in products they didnt need just so that other crewmembers could stay busy building the unneeded products? Would we allow officers to make decisions for operating the ship based on personal ideologies rather than science, data gathering, and the historical record of the outcomes of previous operating decisions? Would we allow a group of crew members working in one section of the ship to bomb and destroy another section of the ship and kill its crewmembers because their fabricated ideologies didnt agree with our fabricated ideologies? Would we direct our technologies toward quickly consuming all of the remaining supplies of fossil fuels rather than aiming our greatest efforts at most effectively harvesting the infinite supply of solar, wind, and other renewable energies? Would we destroy our oxygen filtration and replenishing system by harvesting the trees that keep the system working more quickly than the trees can regrow ? . . . and do so to make throw-away furniture? Would we design our living quarters so that everyone had to burn scarce fossil fuels in a car just to get food. Would the words capitalism, socialism, free market, or communism have any useful meaning on a spaceship whatsoever? We are trying to operate a spaceship using reptilian/reflexive guidance systems.
2011Middle W is c ons in
. . . . . to be continued
We are told that America is broke - that austerity budgets targeting the middle and lower classes are required to pay for our profligate ways. But, there is a disconnect between wealth and money that is contributing to the problem. Adding definition to these concepts may shed some light. We could say that wealth is all of the goods and services that improve the physical human condition. It is housing, food, clothing, transportation and communication systems, and countless other commodities and services that contribute to our physical well-being. The late R. Buckminster Fuller, defined wealth as available physical resources, in the form of matter and energy, multiplied by the scientific and technical capability to most effectively use these resources to mans advantage. Stating this as Fullers equation: WEALTH = RESOURCES X EVER GROWING HUMAN KNOWLEDGE. Based on the laws of physics, wealth is incorruptible and inherently global. Knowledge and resources are worldwide and the greatest multiplication of wealth can only be realized through the synergies of universal cooperation. Money at its best is a medium of exchange for the fair transfer and trade of wealth. But money is not wealth. It is a legally sanctioned claim to wealth - a system of indebtedness wherein the holder of $100 is owed that amount of wealth in goods or services by his society, until this individual chooses to spend the money. Money is based on manmade rules and, unlike wealth, is infinitely corruptible. It is this corruptibility that lies at the heart of our economic woes. Now, all of this seems uselessly theoretical until we realize that in 2011 there were 18.6 million empty homes in America and 3.5 million homeless people, and that an estimated one billion people around the world live in near starvation while we produce one and one half times the food needed to feed everyone. Clearly, the laws of physics and Fullers wealth equation are telling us that we can afford to do whatever is necessary to care for humanity, while the manmade rules of money are telling us we are broke. Further clarification might be of value. Wealth is that which physically supports the human condition. Money is an exchange mechanism for trading wealth. But money can also be invested to make money. In the case of legitimate interest bearing loans to individuals or businesses, or through the purchase of stocks or bonds in private or public enterprises genuinely improving the human condition, this investment can usefully lead to a tangible increase in true wealth. But let us take using money to make money to an extreme. We will call this methodology, used by the financial industry, something like exotic financial instruments. Exotic financial instruments do not create wealth. They transfer the claim to wealth (increase the indebtedness of society to the holder) by the manipulation of money. Through game playing and deceit, money is moved upward, and society falls farther into debt. To make matters worse, money is power. Through the efforts of well paid lobbyists, the legal system and tax codes are altered to further favor the game players. The money - the claim to the wealth is methodically removed from average Americans. We are told that infrastructure, public education, social security and Medicare are unaffordable. After all, America is broke. But let us rephrase some questions: Do we have sufficient cement to rebuild our bridges? Yes. Do we have sufficient structural steel? Yes. Do we have the technical knowhow? Yes. Do we have sufficient manpower? Yes we have high unemployment. Are we capable of growing enough food to feed these people? Yes - excess food is wasted in America. Can we house these workers? Yes - obviously. Oh, but wait say Wall Street and their Washington servants, You people cant build these bridges. You forgot America is broke. You dont have any money. And besides, you cannot afford enough clean water to mix the cement because, dont you remember? You had to sell us (privatize) your public water utilities because - - youre broke. We hedge fund managers and Wall Street bankers and corporate CEOs have simply been savvy businessmen. Its natures way, and now you Americans - - well, youre broke. So we sit and look at the unused cement, the rusting steel, the wasted food and crumbling homes, our unemployed workers, undereducated children, and poverty stricken elderly, because of course, were broke. We are being made to suffer in a land of near-endless wealth, because money is infinitely corruptible. Neither America nor the world is broke. However, we continue to operate under the now scientifically disproved Malthusian belief that there is not enough to go around - someone must suffer and go without. This is at the root of the hoarding behavior of Wall Street and the mindless wars over oil resources in the Middle East. The tragedy is that continuing this false, reflexive belief makes it a self-fulfilling prophecy. Our greatest efforts are dedicated to subverting one another, rather than developing the technologies and systems thinking that would enable mutually assured human success.
. . . . . to be continued
And if all others accepted the lie which the party imposedif all records told the same tale then the lie passed into history and became the truth. George Orwell, 1984 (published in 1949)
My father owned a Ford-Mercury dealership in Neillsville from the late 1930s through the early 80s, and also owned and operated the local school buses during most of that same time period. Like most small businessmen, he loved his hometown and knew that there was an unwritten contract - - - - if he cared for the community, the community would care for him. My dad served as president of the local Chamber of Commerce, chairman of the Wisconsin School Bus Owners Association (a political lobby group), and worked in his church and other civic groups. Because he had lived through the Great Depression, my father believed in Roosevelts New Deal, and social security, and in his later years, Medicare. He loved seeing the public investment in the interstate system under Eisenhower. Like everyone, he complained about taxes, but he would never have questioned the need to pay them in support of his government and his country. Dad was also a hunter, and as good a shot as any. As kids we all went through the training offered by the National Rifle Association that taught safety, and sportsmanship, and concern for other hunters, and respect not only for wildlife and public and private lands, but also for the game wardens and the government regulations that protected people and natural resources alike. Not unsurprisingly, my father usually voted Republican. Times have changed. My mother and father are both gone now, but they would be utterly appalled at what has become of the Republican Party. They would be appalled at how the party has demonized the beautiful American government that they and so many of their friends worked so hard to create. They would be appalled at how the Republican party has once again enabled, through tax cuts for corporations and the rich, the extreme concentration of wealth that was so destructive in the 1920s and 30s. They would be appalled at how the regulations that people shed blood and tears for after the Great Depression have been wiped out. They would be appalled at the unregulated immorality of Wall Street, and hedge funds, and exotic financial instruments. They would be appalled at Cayman Island tax havens, and Swiss bank accounts. They would be appalled that corporations are considered people - that they can give unlimited political campaign contributions. They would be appalled at the restrictions on their right to vote. They would be appalled at concealed carry and stand your ground laws and the sickening, every man for himself - you or me disease it has deliberately spread across our country. They would be appalled at the cancer that has destroyed the NRA. They would be appalled that the Republican party no longer exists - that it has been taken over by a radical fringe that cares for no one or nothing but itself - that exists only to support the rich - that thinks that community, and respect for others, and a sense of decency and fairness are for fools. They would be appalled.
Budget of the Congressional Progressive Caucus Fiscal Year 2012 Read the People's Budget Read The Technical Analysis by the Economic Policy Institute (External Link) Read And Share The One-Page Handout
The Peoples Budget eliminates the deficit in 10 years, puts Americans back to work and restores our economic competitiveness. The Peoples Budget recognizes that in order to compete, our nation needs every American to be productive, and in order to be productive we need to raise our skills to meet modern needs. 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 Americas 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 Budgets 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
Support for the People's Budget President Bill Clinton "The most comprehensive alternative to the budgets passed by the House Republicans and recommended by the Simpson-Bowles Commission" "Does two things far better than the antigovernment budget passed by the House: it takes care of older Americans and others who need help; and much more than the House plan, or the Simpson-Bowles plan, it invests a lot our tax money to get America back in the future business" Paul Krugman genuinely courageous achieves this without dismantling the legacy of the New Deal Dean Baker "if you want a serious effort to balance the budget, here it is." Jeffrey Sachs A bolt of hopehumane, responsible, and most of all sensible Robert Reich "modest and reasonable" The Economist CourageousMr. Ryan's plan adds (by its own claims) $6 trillion to the national debt over the next decade, but promises to balance the budget by sometime in the 2030s by cutting programs for the poor and the elderly. The Progressive Caucus's plan would (by its own claims) balance the budget by 2021 by cutting defense spending and raising taxes, mainly on rich people.
The New Republic ...something that's gotten far too little attention in this debate. The most fiscally responsible plan seems to be neither the Republicans' nor the president's. It's the Congressional Progressive Caucus plan The Washington Post "Its much more courageous to propose taxes on the rich and powerful than spending cuts on the poor and disabled." Rachel Maddow Balances the budget 20 years earlier than Paul Ryan even tries to The Guardian the most fiscally responsible in town would balance the books by 2021 The Nation "the strongest rebuke...to the unconscionable 'Ryan Budget' for FY 2012." Center for American Progress "once again put[s] requiring more sacrifice from the luckiest among us back on the table" Economic Policy Institute "National budget policy should adequately fund up-front job creation, invest in long-term economic growth, reform the tax code, and put the debt on a sustainable path while protecting the economic security of low-income Americans and growing the middle class. The proposal by the Congressional Progressive caucus achieves all of these goals." The Washington Post The Congressional Progressive Caucus plan wins the fiscal responsibility derby thus far." Rolling Stone "This is more than a fantasy document. It's sound policy." Forbes "instead of gutting programs for the poor like Medicaid and Medicare, food stamps, and the new healthcare law, the Peoples Budget focuses on cuts in defense. It also doesnt scrap new financial regulations designed to at least partly stave off another massive financial collapse like the one that put us in this mess in the first place."
Executive Summary
Budgets are more than collections of numbers; they are a statement of our values. The Congressional Progressive Caucus Budget is a reflection of the values and priorities of working families in this country. The Peoples Budget charts a path that keeps America exceptional in the 21st century, while addressing the most pressing problems facing the nation today. Our Budget eliminates the deficit and stabilizes the debt, puts Americans back to work, and restores our economic competiveness. The CPC Budget addresses these problems by listening to the American people. In poll after poll, they are telling us, their representatives in the American government, that they want to preserve Social Security, Medicare, and Medicaid, to make higher education more affordable, to expand job training programs, to cut taxes burdening the middle class, to subsidize affordable housing, and to provide financial assistance for those struggling to prevent foreclosures. The majority of America thinks cuts to Social Security, Medicare and Medicaid, K-12 education, heating assistance to low-income families, student loans, unemployment insurance, and scientific and medical research are completely unacceptable. In contrast, Americans find a progressive tax policy very acceptable. The overwhelming majority of America supports additional taxes on millionaires and billionaires, eliminating unnecessary weapons systems, eliminating tax credits for the oil and gas industries, phasing out Bush tax cuts, and eliminating subsidies for new nuclear power plants. Poll after poll give voice to what Americans are asking of us. Our Budget, in response, listens to what the American people are telling us. It does all of the above in a fiscally responsible way that dramatically reduces our borrowing from banks and foreign governments and ensures our long-term economic competitiveness. It does all of the above recognizing that in order to compete, we need every American to be productive, and in order to be productive, we need to raise the skill level of every American and meet the basic needs of every working family. It does all of the above while remaining rooted in fairness, recognizing that America works only when everyone has an opportunity to make it in America. Our Budget Eliminates the Deficit by 2021 The CPC budget eliminates the deficit in a way that does not devastate what Americans want preserved, specifically, Medicare, Medicaid, and Social Security. Instead of eroding Americas hardearned retirement plan and social safety net, our budget targets the true drivers of deficits in the next Continued On Next Page
decade: the Bush Tax Cuts, the wars overseas, and the causes and effects of the recent recession. By implementing a fair tax code, by building a resilient American economy, and by bringing our troops home, we achieve a budget surplus of over $30 billion by 2021 and we end up with a debt that is less than 65% of our GDP. This is what sustainability looks like. Our Budget Puts America Back to Work & Restores Americas Competitiveness The CPC budget rebuilds America and makes it competitive again. We put America back to work. We rebuild our roads and bridges, ensuring that those who use it help pay for it. We rebuild our dams and waterways with seed money for shipping systems that can compete with the rest of the world. We rebuild our education system by training more and better teachers, restoring schools, helping each student graduate, and supporting community colleges. This is what competitiveness looks like. Our Budget Creates a Fair Tax System The CPC budget implements a fair tax system based on the American notion that fairness and equality are integral to our society. Our budget restores fairness to a system that unfairly benefitted the richest few while hurting the majority of America. Our budget heeds Americas call to end the Bush Tax Cuts including the estate tax and create fair tax brackets for millionaires and billionaires while maintaining credits for the middle class and students. It ensures that the banks that wrecked our economy pay a modest financial responsibility fee and that exotic trading by Wall Street traders who gambled away Americas savings is levied a tax. It guarantees that hedge fund managers (and those who use them) do not get special treatment by taxing capital gains and dividends as ordinary income. It eliminates charity to oil companies making record profits from prices paid at the pump by the American people, given that it is unfair that the American people must also give these oil companies billions of dollars in handouts. Finally, our budget taxes US corporate income as it is earned, in much the same way Americans are taxed. This is what fairness looks like. Our Budget Brings Our Troops Home The CPC budget responsibly ends our wars that are currently paid for by American taxpayer dollars we do not have. We end these wars not simply to save massive amounts of money or because the majority of America is polling in favor to do so, but because these wars are making America less safe, are reducing Americas standing in the world, and are doing nothing to reduce Americas burgeoning energy security crisis. The CPC budget offers a real solution to these fiscal, diplomatic and energy crises, leaving America more secure, both here and abroad. The CPC budget also ensures that our countrys defense spending does not continue to contribute significantly to our current fiscal burden a trend we reverse by ending the wars and realigning conventional and strategic forces, resulting in $2.3 trillion worth of savings. This is what security looks like. Our Budgets 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.
The Baseline
The CPC Budget baseline includes both a ten-year doc fix and Alternative Minimum Tax Patch.1 The adjusted deficit, which was the starting point for this proposal, is compared with the CBO current law deficit below. We have calculated an adjusted debt level to reflect adjusted deficit levels. We have also calculated the net deficit impact of various policies to include interest adjustments based on net interest levels identified in the CBOs March budget update.
_______________________________________________________________
1 Note: Not patching the AMT would save $683 billion over ten years. Not maintaining the doc fix would save $298 billion over ten years. The cost of maintaining these policies amounts to just under $1 trillion over ten years, but not including these costs would amount to budget gimmickry. 3
The Peoples Budget Eliminates the Deficit Achieves Budget Surplus by 2021
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The People's Budget Offers a More Sustainable Path for Public Debt
Infrastructure The new Infrastructure Bank will provide loans and grants to support individual projects and broader activities of significance to our nations economic competitiveness. For example, the IBank could support improvements in road and rail access to a West Coast port that benefits farmers in the Midwest, or a national effort to guarantee private loans made to help airlines purchase equipment in support of the Next Generation Air Transportation System (NextGen). A cornerstone of the IBanks approach will be a rigorous project comparison method that transparently measures which projects offer the biggest value to taxpayers and our economy. This marks a substantial departure from the practice of funding projects based on more narrow considerations. Energy Independence With only 3% of the known oil reserves in the world, the United States cannot become energy independent or measurably affect the world price of oil simply by drilling more within our borders. We need to set loose the clean energy industry that is ready to take hold if we make the public investments in transportation and storage. Our budget will unleash American ingenuity and talent to build a new clean energy economy in which the United States will regain its rightful place as a world leader, move energy independence and address our global warming challenges. Housing The middle of a historic recession and a jobless recovery is not the time to cut support for affordable housing. Investments in housing are one of the most potent job creation tools we have, because every dollar invested in housing creates two dollars and twelve cents in additional economic activity and induces as much as seven additional dollars in indirect economic activity. Providing housing not only reduces the rate of homelessness, which costs state, local and federal governments tens of thousands of dollars for every homeless family, but provides the vital backbone for creating long-term economic viability for every family in America: a place to call home.
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Allow the Bush-era tax cuts to expire at the end of 2012 (allowing rates to revert to Clinton era levels), but extend marriage relief, credits, and incentives for children, families, and education Our budget maintains marriage penalty relief (standard deduction, EITC phase-out, and the 15% bracket), the expanded CTC, education incentives, and other incentives for children and families. Rescind the upper-income tax cuts in the tax deal Repealing the 33% and 35% tax brackets, reinstating the limitation on itemized deductions and personal exemption phase-out, ending capital gains and dividends tax cuts, and returning the estate tax to 2009 parameters would save roughly $95 billion over 2012-14 (tax-year 2012 spills into FY2013 and the capital gains tax cut spills into FY2014).2 Index the AMT for inflation for a decade The Alternative Minimum Tax (AMT) was designed to keep wealthy taxpayers from using loopholes to avoid paying taxes. But because it is not automatically updated for inflation, more middle-class taxpayers are getting hit with the AMT. While we need a long-term solution to this problem, until one exists we have to be honest about our obligations to the middle class families in this country. Our budget fully pays for the AMT patch for the next decade. Schakowsky millionaire tax rates proposal (adding 45%, 46%, 47%, 48%, and 49% top rates) The Schakowsky plan creates five additional income tax brackets, starting at 45 percent for married couples making over $1 million dollars a year and increasing to 49 percent for people making $1 billion and over. The current top tax rate is 35 percent for people making $379,150 a year or more. Progressive estate tax Our budget rescinds the estate tax in the tax deal and replaces it with Sen. Sanders progressive estate tax. The policy would include a $3.5 million exemption followed by a progressive series of marginal tax rates as follows: a 45% rate on the taxable portion of estates up to $50 million, a 55% rate on the portion of estates up to $500 million, and a 65% rate on the portion of estates worth over $500 million. Tax capital gains and qualified dividends as ordinary income This policy would eliminate the preferentially low rates on long-term capital gains and qualified dividends (currently 15%) and again tax all capital income as ordinary income under the marginal tax rate structure. The tax rate on longterm capital gains is scheduled to rise to 20% in 2013 and dividends are scheduled to be taxed again as ordinary income. Cap the benefit on itemized deductions at 28% For itemizing tax filers, the value of itemized deductions rises with their marginal tax rate (the rate on the last dollar earned), which makes many tax code preferences regressive (let alone the fact that non-itemizers see no benefit). This policy would limit the tax benefit of itemized deductions (home mortgage interest, etc.) to 28%.
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2 Assumes
these three tax cuts expire for all tax filers, not just those making above $200,000/$250,000. The estate tax is treated separately. 9
May Replace the tax exclusion for interest on state and local bonds with a subsidy for the issuer The budget would replace the tax exclusion for interest income on state and local government bonds with a direct subsidy to borrowers (i.e., state and local governments), which would be a more cost-effective way of reducing their borrowing costs. Under this policy, state and local governments would make taxable interest payments to borrowers and receive a 15% subsidy from the federal government for the interest paid on those bonds. This would simplify the tax code, increase budgeting transparency, and more cost-effectively subsidize borrowing by state and local governments.
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