Our country is at a crossroads. Next week, 29 members of Congress serving on the House-Senate budget conference committee are expected to put forward a budget proposal that could have major, long-lasting impacts on the lives of every American family.
Their first task is to avoid a repeat performance of the government shutdown we suffered through last October. That 16-day shutdown resulted in the delay or denial of critical services, delayed or reduced paychecks for federal workers and federal contractors, and setbacks in critical scientific and medical research. The repercussions of that man-made turmoil were far reaching, costing our economy an estimated $24 billion.
Their second task is to end the budget "sequester" and its arbitrary across-the-board cuts. Think of the sequester as a partial or rolling shutdown -- complete with furloughs, reductions in grants by the National Institutes of Health, fewer loans to small business women, and so on. To avoid additional economic damage, the budget committee needs to prevent another shutdown and stop the sequester.
But just doing no more economic harm is not enough. We have an opportunity to address the single biggest threat to our economy and our democracy -- an unprecedented level of income inequality that is stifling the middle class and concentrating our nation's wealth in the hands of a few.
The United States has never been richer, and our economy is still the largest in the world by a hefty margin. Yet inequality has grown to record levels. Productivity is up -- but the majority of households are living with stagnating or even lower household incomes. Chief executives of the nation's largest companies earned an average of $12.3 million last year, more than 350 times the income of the average worker and more than 800 times the income of a full-time, minimum wage worker. The richest 400 Americans own as much wealth as the bottom 150 million Americans. Almost half of the country lives below, at, or near the poverty level, and one in six Americans is food insecure -- meaning they don't know where their next meal will come from.
America needs a strong middle class but the mindless sequester cuts threaten the very priorities that help build and sustain it: childhood nutrition, student aid, job training, and housing assistance programs. But treading water by simply avoiding more cuts is not enough -- we must accelerate job creation efforts and prepare our people with 21st century skills training. We should increase investments in our communities, supporting more good-paying jobs in construction, manufacturing, education, public safety, and health care. Those investments will increase spending in local economies, helping our country to grow at its full potential.
We cannot get there without new revenue, but we can raise revenue without hurting the middle class or those who aspire to it. I am the sponsor of legislation that would raise tax rates on high earners, from 45 percent for income over $1 million to 49 percent for income over $1 billion - top rates lower than those in existence from 1932 to 1986, when our economy experienced plenty of growth. I am also the sponsor of legislation that would tax corporations based on the country in which they are managed and controlled, end deferral of foreign source income, close loopholes that inflate the impact of foreign tax credits, and eliminate loopholes for big oil companies that disguise royalty payments to foreign governments as taxes paid. Those two bills alone would raise about $1.4 trillion over the next decade -- more than enough to replace the remaining nine years of the sequester and give the economy a short-term economic stimulus. Those ideas -- and others to raise revenue in a responsible way -- should be considered as the conference committee moves forward.
We have a choice: we can allow the growing disparity between rich and poor to continue unimpeded, or we can take action to budget responsibly and strengthen and expand the middle class. If we want this economy -- and this country -- to meet its full potential, the choice is simple.
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