Many liberals went bananas over the new plan to reduce deficits. The ideas put forth by the chairmen of President Obama’s bipartisan deficit commission ignore their priorities, they lament.
Liberals are entitled to be crabby because they’ve been doing the hard budget compromising since the Clinton era. And what business is it of the chairmen — Erskine Bowles, a Democrat, and former Wyoming Sen. Alan Simpson, a Republican — to set an arbitrary (and low) maximum percentage on the tax revenue relative to gross domestic product that our society is allowed to collect? Their job is to find ways to bring down deficits. Period.
But the chairmen’s blueprint does include items that progressives should like. Let’s look at three of them.
— Ending the deduction for mortgage interest. Liberal economist Paul Krugman complains, “They suggest eliminating tax breaks that, whatever you think of them, matter a lot to middle-class Americans … and using much of the revenue gained thereby, not to reduce the deficit, but to allow sharp reductions in both the top marginal tax rate and in the corporate tax rate.”
Hold on there. That middle-class people deduct their mortgage interest doesn’t make this primarily a broadly used tax break. Only those who itemize their deductions enjoy this benefit, and the bottom two-thirds of taxpayers don’t itemize. For renters, it’s worth zip.
So the bigger the home loan and the higher the tax bracket, the more valuable is the mortgage interest deduction. As for middle-class homeowners who do use this tax break, many would be better off losing it if that came paired with a lower tax rate.
— Taxing investment income the same as work income. The richest Americans make almost all their money from investments, not from jobs. Even if the top tax rate were cut to 23 percent from 35 percent, as Bowles-Simpson suggests, taxes would actually rise for rich folk living on investment income now taxed at 15 percent.
— Protecting the Social Security Trust Fund. Many liberals blew their top over the proposals to trim future benefits. That may well be unnecessary, and more importantly, the chairmen left the trust fund alone.
Social Security is a self-funding program. (In other words, the workers and their employers, not the Treasury, pay for it.) In the early ’80s, payroll taxes were raised and benefits cut to build the trust fund for a day when current payroll taxes could no longer support current retirees. That day is approaching, but thanks to the trust fund savings, all promised benefits can be paid out until 2037.
Conservatives like to portray the trust fund as an empty vault. The money that’s been put into it for over a quarter century was not loaned to the federal government, they say, but spent. Convince enough people of this, and the right can get away with siphoning the money owed the trust fund into deficit reduction (or more tax cuts for the rich).
Bowles-Simpson may fool around with the benefit schedule, but it doesn’t raid the trust fund for reducing the Treasury’s deficits. A show of respect for the integrity of the trust fund is no small thing these days.
For all the talk of the painful, painful(!) sacrifices needed to achieve the chairmen’s goal of reducing the federal deficit by $4 trillion through 2020, one thing should be kept in mind: Simply ending all the George W. Bush tax cuts would do the same thing.
No one starved in the Clinton era. In fact, people did darn well then. That’s something for Democrats to think about now, before Republicans take over the House and start the fiscal voodoo dance all over again.
Copyright 2010 The Providence Journal Co. Distributed by Creators.com
Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn
Dear Truthout Community,
If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.
We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.
Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.
There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.
After the election, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?
It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.
We know this is such a painful moment and donations may understandably be the last thing on your mind. But we must ask for your support, which is needed in a new and urgent way.
We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.
Please dig deep if you can, but a donation of any amount will be a truly meaningful and tangible action in this cataclysmic historical moment.
We’re with you. Let’s do all we can to move forward together.
With love, rage, and solidarity,
Maya, Negin, Saima, and Ziggy