Fighting back against the Republican's continued demand that deficit reductions must be achieved by slashing the nation's cherished social programs and the Democrat's eroding defense of them, Vermont's Independent Senator Bernie Sanders says enough is enough.
"We must not be content with an economic reality in which the middle class of this country continues to disappear." –Sen. Bernie Sanders (I-Vt.)
Announcing a new 'Progressive Budget Blueprint' on Wednesday, Sanders argues that as low-income Americans and middle class workers continue to bear the brunt of economic pain while the wealthiest individuals and corporations reap ever more financial gains, there is a better alternative than the destructive austerity agenda being pushed by Beltway elites and corporate-friendly politicians from both major parties.
"At a time when we are experiencing more wealth and income inequality than at any time since the 1920s, and when Wall Street and large corporations are enjoying record profits, we should be asking the very wealthiest people in this country to start paying their fair share of taxes," Sanders said Wednesday.
The Sanders' blueprint is centered around ten budget policy proposals, including large cuts to the Pentagon budget; the institution of a financial transaction tax (also known as FTT or the Robin Hood tax); an end to offshore corporate tax havens; several changes to the tax code that favors the rich; and progressive reforms to both Social Security and Medicare that would strengthen, not cut, the essential programs in the decades ahead.
"Our recipe for prosperity is simple: protect the safety net, stop the austerity, give the economy room to grow, and don't pursue further deficit reduction at the expense of national priorities." Rep. Raul Grijalva (D-Ariz.), CPC co-chair
The blueprint by Sanders was released Wednesday ahead a scheduled meeting of the select House and Senate budget committee, of which he is a member. Tasked with hammering out a bi-partisan budget agreement by mid-December the committee has been guarded about the progress that's being made, but progressives continue to be concerned that the focus on cuts and other forms of austerity will crowd out bold policy changes that could create jobs and return sanity to the long-term prospects of the economy.
It remains unclear who among Sanders' Senate colleagues might back his set of proposal, but at least some progressive Democrats in the House are speaking the same language. Earlier this year, members of the House Congressional Progressive Caucus unveiled their ideal budget, what they called the 'Back to Work Budget.' Though going nowhere in the Republican-controlled chamber, it remains their standing proposal, with a promises to "reduce the deficit by $4.4 trillion by closing tax loopholes and asking the wealthy to pay a fair share"; "repeal the arbitrary sequester and the Budget Control Act that are damaging the economy"; and "to strengthen Medicare and Medicaid, which provide high quality, low-cost medical coverage to millions of Americans when they need it most."
An indication of the CPC's current stance on the budget talks by the was laid out in this tweet Wednesday morning:
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3 steps to a progressive budget deal: 1. Repeal the sequester 2. No cuts to Medicaid, Medicare, Social Security 3. Invest more #JobsNotCuts
— Progressive Caucus (@USProgressives) November 13, 2013
And Rep. Raul Grijalva, chair of the CPC, added this in a statement on Wednesday, "Our recipe for prosperity is simple: protect the safety net, stop the austerity, give the economy room to grow, and don't pursue further deficit reduction at the expense of national priorities. The question is whether budget negotiators will listen."
"We're better than the right-wing agenda of austerity, higher military spending, and limited opportunities for working people," Grijalva continued. "The public is much hungrier for change than the Beltway media seems ready to admit. The budget team negotiating this week should remember that."
The Sanders' plan was ushered out by a new website offering fact sheets and infographics on the nation's rampant inequality, an interactive budget questionnaire, and a petition for voters to express their support for the range of ideas.
An online petition hosted on the site, which supporters of the Sander's blueprint were asked to sign and share, calls for a "fair budget plan" and reads:
At a time when the middle class is disappearing, poverty is increasing and the gap between the rich and everyone else is growing wider, we demand that the federal budget not be balanced on the backs of the most vulnerable people in our country.
We demand a budget that puts millions of Americans back to work in decent paying jobs and ensures profitable corporations and the wealthiest Americans pay their fair share. We demand a budget that does not cut Social Security, Medicare or Medicaid benefits.
The complete 10-point plan—which Sanders says will "raise revenue, reduce spending, and create jobs"—follows:
- Stop corporations from using offshore tax havens to avoid U.S. taxes.
Each and every year, the United States loses an estimated $100 billion in tax revenues due to offshore tax abuses by the wealthy and large corporations. The situation has become so absurd that one five-story office building in the Cayman Islands is now the “home” to more than 18,000 corporations.
- Establish a Robin Hood tax on Wall Street speculators.
Both the economic crisis and the deficit crisis are a direct result of the greed and recklessness on Wall Street. Creating a speculation fee of just 0.03 percent on the sale of credit default swaps, derivatives, options, futures, and large amounts of stock would reduce gambling on Wall Street, encourage the financial sector to invest in the job-creating productive economy, and reduce the deficit by $352 billion over 10 years, according to the Joint Committee on Taxation.
- End tax breaks and subsidies for big oil, gas and coal companies.
If we ended tax breaks and subsidies for big oil, gas and coal companies, we could reduce the deficit by more than $113 billion over the next 10 years. The five largest oil companies in the United States have made over $1 trillion in profits over the past decade. Exxon Mobil is now the most profitable corporation in the world. Large, profitable fossil fuel companies do not need a tax break.
- Establish a progressive estate tax.
If we established a progressive estate tax on inherited wealth of more than $3.5 million, we could raise more than $300 billion over 10 years. In 2010, Sen. Sanders introduced the Responsible Estate Tax Act that would reduce the deficit in a fair way while ensuring that 99.7 percent of Americans would never pay a penny in estate taxes.
- Tax capital gains and dividends the same as work.
Taxing capital gains and dividends the same way that we tax work would raise more than $500 billion over the next decade. Warren Buffet has often said that he pays a lower effective tax rate than his secretary. The reason for this is that the wealthy obtain most of their income from capital gains and dividends, which is taxed at a much lower rate than work. Right now, the top marginal income tax for working is 39.6 percent, but the top tax rate on corporate dividends and capital gains is only 23.9 percent.
- Repeal all of the 2001 and 2003 Bush tax breaks for the top two percent.
In January, Congress finally repealed the Bush tax breaks for the top one percent — households making more than $450,000 a year. But the Bush tax breaks have been continued for the top two percent — households with incomes between $250,000 and $450,000 a year. Repealing the Bush tax breaks for all of the top two percent would reduce the deficit by about $400 billion over the next decade. After President Clinton increased taxes on the top two percent, the economy added over 22 million jobs. After President Bush reduced taxes for the rich, the economy lost over 600,000 private sector jobs.
- Eliminate the cap on taxable income that goes into the Social Security Trust Fund.
If we are serious about making sure that Social Security can pay all of the benefits owed to every eligible American for the next 50 to 75 years, we don't do that by cutting benefits, we do that by scrapping the cap on taxable income so that a millionaire and a billionaire pays the same percentage of their income into Social Security as someone making $40,000 or $50,000 a year. Right now, someone who earns $113,700 a year pays the same amount of money in Social Security taxes as a billionaire. This makes no sense. Applying the Social Security payroll tax on income above $250,000 would ensure that Social Security remains solvent for the next 50 years. This plan would only impact the wealthiest 1.3 percent of wage earners; 98.7 percent of wage earners in the United States would not see their taxes go up by one dime.
- Establish a currency manipulation fee on China and other countries.
As almost everyone knows, China is manipulating its currency, giving it an unfair trade advantage over the United States and destroying decent paying manufacturing jobs in the process. If we imposed a currency manipulation fee on China and other currency manipulators, the Economic Policy Institute has estimated that we could raise $500 billion over 10 years and create 1 million jobs in the process.
- Reduce unnecessary and wasteful spending at the Pentagon.
We should reduce unnecessary and wasteful spending at the pentagon, which now consumes over half of our discretionary budget. Much of the huge spending at the Pentagon is devoted to spending money on Cold War weapons programs to fight a Soviet Union that no longer exists. Lawrence Korb, an assistant secretary of defense under Ronald Reagan, has estimated that we could achieve significant savings of around $100 billion a year at the Pentagon while still ensuring that the United States has the strongest and most powerful military in the world.
- Require Medicare to negotiate for lower prescription drug prices with the pharmaceutical industry.
Requiring Medicare to negotiate drug prices, similarly to what the VA currently does, would save more than $240 billion over 10 years.