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Schakowsky's Plan to Save Social Security, Reduce Debt, Grow the Economy
In contrast, another commission member, Jan Schakowsky, is a "current." She currently represents a Chicago-area Congressional district, having served since 1999 as a heavy-lifter in the House, with an assignment on the Energy and Commerce Committee and a key leadership role on the Steering and Policy Committee. As an Illinois legislator and member of the US House, she has for the better part of two decades been an engaged player in budget debates, and she continues to make the hard choices in the real-world setting of the Congress as opposed to the theoretical zone where Simpson and Bowles operate. Additionally, Schakowsky's grassroots experience makes her one of the most uniquely qualified members of the deficit commission, as she served as program director of Illinois Public Action, the state's largest public interest group, and executive director of the Illinois State Council of Senior Citizens.
"The middle class did not benefit from the Republican economic policies that led to the current deficit—they were the victims—they should not be called upon to pick up the tab," says the congresswoman. (Lisa Fan/ The Epoch Times) Schakowsky "gets" that working families did not cause the financial instability of the moment and, unlike Simpson and Bowles, she rejects the notion that working families should bear the overwhelming majority of the burden for putting the nation's fiscal house in order. As such, what Schakowsky has to say is grounded in a lot more reality than what the commission co-chairs have to say.
And what Schakowsky is saying adds a needed dose of realism to the debate about how to balance budgets, reduce debt and grow the economy.
"Lower- and middle-class Americans did not cause the deficit. Just ten years ago the federal budget was generating a surplus as far as the eye could see. That surplus was turned into a deficit due to massive tax cuts—mainly to wealthy Americans; two wars paid for by borrowed money; and a major recession caused by the recklessness of the big Wall Street banks. Over the last decade the incomes of middle-class Americans have actually shrunk, while those of the wealthiest 2 percent of the population have exploded," argues the Congresswoman.
Schakowsky is blunt about how best to approach the commission's charge.
"The middle class did not benefit from the Republican economic policies that led to the current deficit—they were the victims—they should not be called upon to pick up the tab," says the congresswoman.
As such, Schakowsky rejects the Simpson-Bowles scheme, which would weaken Social Security, Medicare and Medicaid while cutting taxes for multinational corporations. "The president's Fiscal Commission has been given a concrete goal: to achieve primary budget balance in 2015, ensuring that all spending is paid for except for interest on the national debt," she explains. "Last week, co-chairs Erskine Bowles and Alan Simpson laid out their plan, which they presented to the commission and to the public. Their proposal would have serious consequences for lower- and middle-class Americans, and that is why I cannot support it."
But Schakowsky is not just saying "no."
She has an alternative plan to reduce the deficit by $427 billion over the next five years, far surpassing the target proposed by President Obama, and she would do it with an eye toward protecting the poor and the middle class and strengthening the economy.
"Fixing the federal deficit is not an end in itself. The goal of budget policy should be to assure long-term, widely shared economic growth," explains Schakowsky. "Economic growth is not just good for businesses and families—it will reduce the deficit. Sustained, long-term economic growth requires that we end the trend of concentrating more and more wealth in the hands of the rich and less and less in the hands of a middle class that can then afford to buy the products and services that will sustain economic growth."
Notably, Schakowsky preserves Social Security and other programs that protect and serve working Americans. Instead of undermining the program, she would assure its long-term solvency by eliminating the wage cap on the employer side and raising it to 90 percent on the employee side, applying FICA to all wage income below the cap, and establishing a modest legacy tax on wealthier Americans.
This is part of a broader plan from Schakowsky, which has five key elements:
1. Increased economic stimulus to spur growth in the immediate term
• Provide $200 billion to invest over the next two years in measures to create jobs and spur economic growth, including passing the Local Jobs for America Act; and funding for education and law enforcement; Unemployment Insurance, Federal Medical Assistance Percentages (FMAP) and Supplemental Nutrition Assistance Program extensions; and infrastructure.
• Adopt the president's proposals to eliminate overseas tax havens and incentives for outsourcing
2. Smart, targeted spending cuts
• Non-Defense Discretionary—$7.55 billion in savings through increased efficiency and cuts to programs that benefit large corporations that don't need assistance.
• Defense Discretionary—$110.7 billion in cuts from the 2015 defense budget, including efficiency savings, reducing our troop levels, cutting weapons systems we don't need and scaling back the wartime increases in the size of the military.
3. Mandatory spending cuts
• Healthcare—at least $17.2 billion in savings by implementing measures to bring down the cost of healthcare to the federal government and lower healthcare inflation overall.
• Other—$7.7 billion in savings by cutting agriculture subsidies in half, and redistributing federal support to offer greater benefits to small family farms and reduce subsidies to large corporate agribusiness.
4. Reductions in tax expenditures
• Raise $132.2 billion by closing tax subsidies for companies that ship American jobs overseas.
5. Increases in revenues
• Raise $144.6 billion in revenue through progressive reforms to the estate tax, treating capital gains and dividends as regular income, and enacting a cap-and-trade proposal that includes protections for lower-income people.
• Enact President Obama's budget proposal to let the Bush tax cuts for the top two brackets expire and return to 2009 estate tax levels.
• Nontax revenue—raise $7 billion by addressing places where the private sector is currently underpaying.
The plan that Schakowsky has produced is not the final word on how progressives ought to approach debates about fiscal policy, debts and deficits. There needs to be more consideration of the role that the trade deficit plays in destabilizing the US economy and the financial health of the federal government, as Ohio Congressman Marcy Kaptur has noted. There should be consideration of the proposals by Oregon Congressman Peter DeFazio for taxes on speculation and financial transactions. And there should be new approaches to how the Federal Reserve manages bank funds, as economist Robert Pollin has suggested.
But Schakowsky has provided a essential framework for the coming debate. Progressives can say there is an alternative to austerity—and alternative that balances budgets, reduces debt, serves working families rather than Wall Street CEOs, protects Social Security and expands the economy.
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62 Comments so far
Show All"That surplus was turned into a deficit due to massive tax cuts—mainly to wealthy Americans; two wars paid for by borrowed money; and a major recession caused by the recklessness of the big Wall Street banks."
Bush's massive tax cuts (Disaster Capitalism) needed 9/11.
Two Wars needed 9/11.
Wall Street documents (Enron, Worldcom, etc.) were destroyed in Building 7 on 9/11.
All roads lead back to 9/11.
And beyond 9/11 to 1787.
Please explain your reference to 1787. I assume it was a war? Thanks.
Oh!
I guess I wouldn't expect someone with the nick "joecool" (and therby, almost certainly a USAn too) to recognize the year the US Constitution was adopted.
Gosh, I was going to think you were clever, but thanks to your last remark now I think you're just condescending.
Mean people suck.
And follow Rhode Island Governor-elect Lincoln Chafee's advice to end ALL the Bush tax cuts on 1/1/11.
...and then end the Reagan tax cuts on 1/2/11.
That would REALLY hurt the Middle Class. How about just raising taxes on those making over 500,000 a year?
Although Raygun's 1986 "tax reform" cut taxes for corporations, it eliminated many middle class deductions and added many new middle class taxes (63 sections prejudice married taxpayers, unemployment insurance benefits started being taxed, etc.) to the point that Raygun's tax cuts ended up being a tax increase for the middle class.
The Bush tax cuts provided only token tax cuts for the middle class while providing exponentially greater tax cuts the wealthier the taxpayer became.
Eliminating all of the Raygun and Bush tax cuts would actually improve the finances for most middle class Americans.
Let me suggest just one...the return of capital gains tax when you sell your house. As it stands now, you essentially sell and pay no tax.
Not as important at the moment but it will be and still very important to those that are not underwater.
Perhaps its not wise policy to raise any taxes and that is exactly what it would be...an increase in taxes at this moment. I don't buy for one moment the canard that the recession ended in June 2009.
End the outsourcing of private corporations gouging the government by supplying their food and other basic needs. End the Xe people that contract out. And stop outsourcing intelligence gsthering corporation. Biggest thing I like thou is closing the tax loophole for companies that ship jobs overseas. And if the company does not exist in the US, don't contract out to them. Like Haliburton. Ect.
When are we going to give on this dogma of balanced budgets? As progressives we have to know in hard times that's the last thing any government should consider. Please we had a balanced budget under Herbert Hoover and what did it get us but the worst depression in our history? What did a balanced budget get the Weimar Republic politicians in Germany in the 1930s other than a lot of trouble and tossed out for the worst despotism in history along with some of the worst economic times before such fascists came to power.
In contrast Franklin D Roosevelt ran up one deficit after another getting the USA out of the worst depression in history, and yes he did it spending on those who needed it most not the wealthy and super wealthy.
AD
AD, you are right. It is a DOGMA. Having studied,researched and taught economics,finance and accounting quite extensively, there is absolutely nothing "balanced" in "getting the books in order and budgets balanced." All accounting numbers are ESTIMATES, with only some having an accuracy over 90%. COST estimates are almost ALWAYS very POOR estimates. So Where is the "balance"?
People are biologically evolved to believe in delusions for a long time, sometimes over 2,000 years in dogmas; religious dogmas are massive empirical proof of that. It's called the HERDING mentality of humans. Humans in groups somehow often behave similar to cattle herds. We do not know as yet that "somehow." So the "people" are being herded over the cliff by the herders, you know who.
So far, these wars have cost Americans over SIX trillion dollars and the costs keep rising.
Miggy-2
Good list. Agree completely with the recommendations, not necessarily the reasoning.
There's an interesting Editorial from way back in history that might interest you. Harry Truman wrote an editorial calling for the abolition of the CIA's non intelligence gathering capability- those "black ops". Ran in the morning edition and was pulled from the latter editions of the New York Times - gee wonder why?
As for the Kennedy Assassination, I'd recommended "Reclaiming History" by Vince Bugliosi, you probably won't agree with it, but its very well done.
Oh, I think you left off the biggest item - abolishing the Federal Reserve and taking our money supply away from private hands. Otherwise, very good list.
Now this is something the President needs to FIGHT for.
Dream on. The president is a gelding.
another posters "spineless chameleon" is apt.
Mine is Judas Goat for Liberals, Blacks and Dimo's
and
Scapegoat for Tea Bags.
Tax hedge funders and ilk, some hedgers make $900,000 per hour, yes per hour!
My research indicates that 9 geldings have won the Kentucky Derby.
However, no horse with its head up its ass has.
At this time, there is no realistic chance of anything useful being done. The right-wing coalition of bitter Republicans and Tea Partiers are united on one goal - to destroy the American middle class by killing or crippling all parts of the safety net (unions, social security, medicare, progressive taxes) and by diverting as much revenue as possible to the wealthiest individuals and corporations. There was a brief opportunity in early 2009 when the Democrats could have used their majorities to start the country on the road back from the madness of the hawks and deregulators, but that vanished while Obama was searching for that one Republican who would join in to make it a 'bipartisan' effort.
I expect nothing to happen except endless debate in Congress over which segments of the population should have their safety nets destroyed to provide for a new tax cut for the wealthy, as the Republican so-called leaders have demanded.
Some ought to be grateful for taxes instead of trial for high crimes and life in prison.
Yeah this proposal has good rallying points.
But it's not what the big O wants. He appointed the Wall St guys as chairs for a reason.
He had ample opportunity to sack Simpson (and maybe replace him with Schakowsky) when Simpson made sexist obscene comments about the the 310 million tits of Social Security.
Van Jones is forced to resign over a signature on an old petition calling for another 9/11 investigation (something unrelated to his job in the O admn), but Obama allows Simpson to remain a co-chair after such a despicable remark that clearly demonstrates a disqualifying bias directly related to his official mission.
Shows you whose side Obama is on!
It's not the side of the American People!
Van Jones was on the radio a few months ago and said he never even signed that petition.
Schakowsky's Plan will never see the light of day because the media will kill it. Unless we have support from writers, actors, and newspeople nothing will happen. They do not seem inclined to rock the boat. Since they are a part of the problem, we must change ourselves.
Except that, if a group of "progressives" would get together and jointly, publicly and vociferously push for Schakovsky's proposal, or something along those lines, and put it as an "in your face" challenge to Obama and Pelosi (pointing out the predetermining packing of the commission) and demanding wide open floor debate and subsequent referrals to committees, wouldn't that little (teapot?) rebellion hit some front pages? They've got Schakovsky and Kucinich and Lee and Grayson (still) and Grijalva and Woolsey and Kaptor (and might even be able to embarass Conyers into it), and god knows who else. If anything is worth making a principled stand on, why not this?
Stone
I would suggest that you need the support of the people themselves, not media nor political hacks.
There are good parts to the plan she has, then there are parts already rejected and with good reason like Cap & Trade, a flat giveaway to Corporations that does within a micrometer of doing nothing about emissions.
Championing already rejected ploys ensures less support and possible defeat for any plan containing poison pills of this type. Is she really serious? She must know this.
Cap & trade is virtually a given now. Climate change is off the table, and really not worth arguing in this context. I think it would be a mistake to mire this argument down with that matter (or the "wars", which would squelch all discussion in patriotic clap-trap...going after specific items is something else).
I'm not all that big on compromise, but Schakovsky's plan is about as good as you're going to get...for now.
Michael F
I think most of the plan is sound.
I also believe that there is a mistake in viewing patriotic support for the troops we have sent over as support for the wars. I could be wrong (highly unlikely :) but the only people still supporting the occupations themselves are far right wingers. People that thought they were OK years ago are now aware that they were sold a bill of goods. I believe the pressure to get out is already building.
Going after specific items is all Pelosi and Obama's legacy leave possible. Good point.
You are quite correct about Climate Change legislation in my opinion.
"Cap & trade is virtually a given now"
This I cannot undertand. There is virtually no possibility of passing this bill. It didn't have the support or votes before and it has less now. Not going to happen.
mightymite
I'm not clear which bill you're referring to (that can't pass).
Sorry....its "Cap & trade"
I thought you were saying its a given that it would pass?
Thanks. Don't agree. I think they're going to get C&T (1) because they have to make some gesture (no matter how empty) in that direction, and (2) because the MOTU's mouths are watering for the marketing of the damn things. We'll see.
We will see. I would bet money that it will not pass, There is no appitite for this kind of legislation and its cost's.
The good part is one of us is right!
another time-biding ploy to usurp and defang real radical grassroot activities, like local currencies, non-profit public banks, state-run single payer, grow-your-food, stop-buying-corporate-products, squat in your own home, move your money out of wall street and their banks, etc.
Keep it SIMPLE.
Less SOCIAL SECURITY leads to more SOCIAL INSECURITY.
It was set-up to keep the masses quiet, so ...
Why are all the solutions posed here stuck in the framework of the contemptible status quo? How sad and discouraging! Do you not realize that imperialism will never be peaceful or humanitarian? Oppression, inequality and war are part of its fabric.
There is only a global communist solution to the basic problems of war, inequality, environmental destruction, and poverty, and the singular first step is to build the Leninist party of proletarian revolution.
Why are all the solutions posed here stuck in the framework of the contemptible status quo? How sad and discouraging! Do you not realize that imperialism will never be peaceful or humanitarian? Oppression, inequality and war are part of its fabric.
There is only a global communist solution to the basic problems of war, inequality, environmental destruction, and poverty, and the singular first step is to build the Leninist party of proletarian revolution.
that will happen sooner than later, out of necessity and inevitability, if not out of sudden enlightenment.
How do I sign on to support this plan?
Somebody finally making sense? She better look out or somebody is going to "accidentally" run over her with a truck.
Making sense in this country is now probably classified as domestic terrorism.
Wow, lots of pessimists its here! I will forward this article and see how I can start my friends talking it up, and then they should forward it to their friends and the local papers and drown out the "we are paralyzed and can't move people"
Throw this pebble into the pond and see if it can make some tsunami waves! It's not that hard, if you start now!
Given that perpetual war + global warming + economic collapse = doomsday and that time's running out, only disappointment can come of any plan that depends upon Congress to enact progressive legislatioma. Matter of fact. despite the good intentions of the Illinois Congresswoman, Congress is more likely to pass regressive than progressive legislation in not just the next session of Congress, but into the forseeable future. Not surprising, then, so much pessimism and even depression among leftists. How to get us out of this funk? That's easy. We stop all this incessant complaining and begin agitating, organizing and mobilizing for the mass uprising, without which, we'll have surrendered our great country to fascism. Oh, but what you suggest is a mission impossible, we can't get a hundred people to protest these wars, so how are we going to get people to rise up en masse? What, is it possible that only the teapartiers have the ability to move America? Or was their success due to the fact that there was no opposing tide from a left so quick to come up with brilliant analyses, but short on appealing to the masses. Not that the left doesn't have the capacity, the Civil Rights and anti-Vietnam War movements attest to this. What then? Firstly we stop feeling sorry for ourselves and defeat defeatism by getting on with the task of building a movement. The start-up could be here on CD. Not to forget, though, that a revolution only succeeds when everyone participating becomes a leader.
yourstruly
"What, is it possible that only the teapartiers have the ability to move America?"
Of course not.
"Or was their success due to the fact that there was no opposing tide from a left so quick to come up with brilliant analyses, but short on appealing to the masses."
Let's let up on how brilliant we are, but yes.
"Not that the left doesn't have the capacity, the Civil Rights and anti-Vietnam War movements attest to this."
And the point here is that the Left was appealing to popular and rising opinion, we did not generate it, but supported it.
Revolutions are rarely successful, witness the French, Soviet, Haitian, etc. Not a road to success nor would it enjoy popular support.
Don't forget that progressives are a small minority of the population and even if you add in the extra 21-22% of leberals you are still at only 26-27%
"Don't forget that progressives are a small minority of the population and even if you add in the extra 21-22% of leberals you are still at only 26-27%"
That depends on how the questions are asked. In poll after poll, when questions are reduced to the issues (not "R-D-I" labels), the majority of Americans actually come down on the progressive-side.
Did you watch the Chomsky video interview yesterday on CD?
http://www.commondreams.org/video/2010/11/17-1
Old Peculiar
I didn't...thanks for adding links when you mention something.
I'll stand by the figure because if it were higher it would be a lot easier! I'd also say that many, many people that are conservative, moderate, fiscally are much more liberal socially.
So the issue counts and I'm sure you are right in that respect.
Edit...Thanks! Interesting and I agree with him about half as usual. For example... He says people think Obama didn't go far enough on Health Care when I believe its quite clear they hadf no interest in the route Obama tpook at all and every poll clearly showed over 70% of the electorate oppopsed it. But at the same time he was right in that most people could have been interested in a single payer system.
I would argue that just because people say the favor something in the consideration (or abstract) of it, that does not mean they are in favor of something like it. I hope that makes sense.
Why is a discussion of ending our wars of imperialist occupation off the table? Not one suggestion from supposed "progressives"!
End the wars. Close overseas bases. Use diplomacy to achieve our foreign policy. Cut domestic military spending. Why is that so difficult to demand?
WTF
Its not difficult to demand, I believe its coming. Reducing the military budget is a given at this point, closing bases ditto.
First we would need some diplomats and a diplomatic policy to implement our foreign policy by diplomacy.
Why not pick one base or posting like Korea and continually ask why WE have troops there? Insist we bring them home. Point out the savings and the increase in National Security this would achieve, etc...
You are correct. "Demanding" is easy". Achieving it with our war-hungry Congress is a very different matter.
Aside from the obvious conflicts of interest that Congressional Members have with the military-industrial complex, Members also have a fear of being slandered as "soft on terrorism".
We also have a long history of SecState being subservient to SecWar, I mean SecDefense. If Clinton had not been such a war-hawk, she does have the balls and capability to take down Gates and elevate the State Department to its rightful position of defining foreign policy rather than meekly implementing it as it now stands.
• Healthcare—at least $17.2 billion in savings by implementing measures to bring down the cost of healthcare to the federal government and lower healthcare inflation overall."
Do those measures include single-payer?
"• Defense Discretionary—$110.7 billion in cuts from the 2015 defense budget, including efficiency savings, reducing our troop levels, cutting weapons systems we don't need and scaling back the wartime increases in the size of the military."
Which still will leave the US spending many times more than the second most heavily armed nation. Without ending the disastrous (for everyone except the profiteers) wars and dismantling the garrison of bases around the world, Ms Schakowsky's proposal is a half-hearted measure at best.
Nowhere in this proposal do I see anything regarding the "free-trade" agreements that have contribuited heavily to the loss of jobs and the stagnation of wages in the US and the lost tax revenue that stems from this.
I also see nothing regarding the billions of dollars spent to prop up Israel, no shocker given Ms Schakowsky's fervor for the "Jewish state".
There are some good ideas but most don't go far enough.
Charlie Rose should have Shakowsky on his show instead of Simpson and Boles. Her plan makes so much more sense.
We all know how it's going to turn out, regardless of anything we say or do. The seniors, the children, and all those struggling to exist day by day will be thrown to the wolves (with my apologies to the poor wolves who're also struggling to survive against great odds), and those at the top will get even more bloated bonuses, and larger tax cuts, and the MIC will expand even more, wasting or "losing" most of the $$$$ they'll be taking from the seniors, the children and the struggling masses.