Tax the Rich, Cut Corporate Fraud: Khanna Details Progressive Path to Trim Deficit by $12 Trillion

As congressional Republicans push a megabill that would add an estimated $2.4 trillion to the national debt while giving lavish tax breaks to the rich and gutting anti-poverty initiatives for the working class, Congressman Ro Khanna on Tuesday unveiled a progressive plan to cut the deficit by $12 trillion and enable investment in "essential programs for ordinary Americans: childcare, universal healthcare, affordable housing, free college, student debt cancellation, advanced manufacturing, and good-paying jobs."

The California Democrat's Progressive Deficit Reduction Plan, introduced in a report and floor speech, has five recommendations to cut spending: modernize the military ($850 billion), get rid of upcoding and fraud in Medicare Advantage ($830 billion), negotiate Medicare drug prices ($200 billion), end fossil fuel subsidies ($170 billion), and implement smarter procurement and contracting ($333 billion).

"There is absolutely no reason Americans should pay two to four times more for prescriptions than people in Canada, Germany, or the U.K."

Khanna's proposal points out that the Pentagon—which has a budget of nearly $1 trillion—has never passed an audit, and that getting ripped off by contractors is an issue not only at the Department of Defense but across the federal government. The document also emphasizes the need to crack down on fraud involving Medicare Advantage and argues that "there is absolutely no reason Americans should pay two to four times more for prescriptions than people in Canada, Germany, or the U.K."

On the fossil fuel front, the plan says that "we shouldn't be paying polluters to give our kids asthma and fleece the American public," and highlights that ending subsidies would not only save billions each year but also prevent 6 billion tons of carbon pollution.

The plan doesn't just advocate for spending cuts, it also features a trio of recommendations for generating revenue: tax corporations fairly ($2 trillion), tax billionaires ($4.7 trillion), and protect Social Security ($2.9 trillion).

Specifically, Khanna's proposal "restores the domestic corporate tax rate to 28%, collects international corporate taxes, closes loopholes like carried interest, and adds a 0.01% financial transaction tax." He also wants to make billionaires pay taxes on their wealth and loans on it, close inheritance loopholes, restore the top marginal tax rate to 39.6%, reinstate Internal Revenue Service funding to go after tax cheats, and remove a cap that allows them to pay into the program at a fraction of the rate that most working-class Americans pay.

Khanna, who is expected to run for president during the next cycle, also contrasted his plan with the budget reconciliation package currently moving through the GOP-controlled Congress. His report asserts that the Republican legislation is "not fiscal responsibility—it's a giveaway to the wealthy that sticks future generations with the bill."

In addition to increasing the deficit, the report says, "their bill risks driving up prices, pushing interest rates even higher, and making our tax code more convoluted. It could shake market confidence and ultimately drag down long-term economic growth—all while doing less for working families."

"Do they think Americans can't do the math? We can—and we know their numbers don't add up. Ours do," the document declares, laying out all of the figures for the next decade in a chart on the final page.

The congressman's blueprint—which resembles watchdog Public Citizen's January report responding to President Donald Trump and billionaire Elon Musk's so-called Department of Government Efficiency—comes as Senate Republicans consider the controversial megabill recently passed by the House of Representatives.

On Tuesday, GOP leaders in the upper chamber sent their House counterparts a list of policies "that need to be erased" from the package, according toPolitico.

"If the flagged items aren't deleted, the bill won't enjoy special party-line treatment in the Senate and the filibuster would be enforced for passage of the 'big, beautiful bill' Republicans want to enact this summer," the outlet detailed. "In response, House GOP leaders plan to tee up a vote this week to nix specific provisions the Senate parliamentarian has identified as rule violations."