The Progressive


A project of Common Dreams

For Immediate Release

Liz Rose (202) 587-1638,

Citizen's Guide to the Budget Battles

Statement from Robert Borosage co-director of Campaign for America’s Future


Campaign for America's Future's co-director Robert Borosage presents: A Citizens' Guide to Common Sense about Budgets. Here are some guidelines for progressives to bring to the budget debate:

1. Don't Cut Jobs Now.

Fed Chair Ben Bernanke is right to oppose immediate government spending cuts. Cutting spending costs jobs --teachers, police, FBI agents, social workers, food and drug inspectors. Big cuts and layoffs put the faltering recovery at risk. But deficit reduction requires growth and lower unemployment. If you care about deficits, don't cut spending or raise taxes now.

2. Simply Doing Nothing Would Bring the Deficit Down to Manageable Levels

If the Congress did nothing, allowing the Bush tax cuts to expire as scheduled in 2012, the deficit would decrease from the current 9.8% of GDP to an average 3.1% of GDP from 2014-2021. All the painful cuts are the result of not wanting to go back to Clinton era tax levels. Any sensible program for deficit reduction must begin with increased taxes on the wealthy. Remember the deal to extend the Bush tax cuts for those making over $250,000 a year for two more years costs about $40 billion a year, which will far exceed what Republicans end up cutting from public schools, health research, food and safety, workplace safety and environmental protection this year.

3. Tax bad practices, don't cut good programs

Excessive financial leverage and gambling of Wall Street drove the economy off the cliff. The national debt held by the public went from $6 trillion and 40% of GDP in 2009 before the collapse to $9 trillion and 62% of GDP by the end of 2010. Wall Street excess blew up the economy and ran up the debt. The big banks then got bailed out by taxpayers, and now are back paying out multi-million dollar bonuses. Let's put a small tax - less than one half of one cent - on every transaction. It would net over $100 billion a year, and encourage less risky business strategies.

4. Take on the powerful, not the poor

Not surprisingly, entrenched corporate lobbies gain far more wasteful subsidies and benefits than the poor. Each year, the president has called for rolling back lavish subsides to big Oil, the drug companies, the health insurance companies and Agribusiness. Each year, he has been stymied in Congress, opposed by Republicans and conservative Democrats catering to powerful lobbies. Watch how the subsidies for these predator interests fare in the process.

5. Focus on the disease, not the symptoms:

We don't have an "entitlement crisis," we have a broken health care system. The projections of long term, rising deficits and debt come entirely from rising health care costs. These are expressed in the budget largely by Medicare, Medicaid, and the Veteran's Administration. But those are the merely the budgetary symptoms. The crippling disease in a broken health care system, dominated by powerful corporate complexes - the drug industry, the insurance companies, the hospitals - that have succeeded in having the US pay two and one half times more per capita on health care than the average of other industrial countries with worse results.

Turning Medicare into a voucher or Medicaid into a limited block grant would reduce the budget symptoms, by passing more costs on the elderly, the disabled and the poor. But it won't stop the hemorrhaging that will continue to bleed business, states and localities and families.

6. Social Security: Don't Fix What Ain't Broke

Social Security is not part of the deficit problem; and is not part of the solution. Over the long term, Social Security will need minor adjustments to insure that it continues to pay out its promised benefits in full. How much will be required will depend, in part, on whether the economy grows and whether workers' wages rise or continue to stagnate. Much of the reform can be achieved simply by lifting the cap on the payroll tax so that Paris Hilton pays the same percentage on her income as Wal-Mart employees.

Adapted from this blog by Robert Borosage:

The Campaign for America's Future is the strategy center for the progressive movement. Our goal is to forge the enduring progressive majority needed to realize the America of shared prosperity and equal opportunity that our country was meant to be.