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Robert Reich

Robert Reich

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Beware the "Middle Ground" of the Great Budget Debate

Posted: 04/22/11 10:34 AM ET

How debates are framed is critical because the "center" or "middle ground" is supposedly halfway between the two extremes.

We continue to hear that the Great Budget Debate has two sides: The president and the Democrats want to cut the budget deficit mainly by increasing taxes on the rich and reducing military spending, but not by privatizing Medicare. On the other side are Paul Ryan, Republicans, and the right, who want cut the deficit by privatizing Medicare and slicing programs that benefit poorer Americans, while lowering taxes on the rich.

By this logic, the center lies just between.

Baloney.

According to the most recent Washington Post-ABC poll, 78 percent of Americans oppose cutting spending on Medicare as a way to reduce the debt, and 72 percent support raising taxes on the rich -- including 68 percent of Independents and 54 percent of Republicans.

In other words, the center of America isn't near halfway between the two sides. It's overwhelmingly on the side of the president and the Democrats.

I'd wager if Americans also knew two-thirds of Ryan's budget cuts come from programs serving lower and moderate-income Americans and over 70 percent of the savings fund tax cuts for the rich -- meaning it's really just a giant transfer from the less advantaged to the super advantaged without much deficit reduction at all -- far more would be against it.

And if people knew that the Ryan plan would channel hundreds of billions of their Medicare dollars into the pockets of private for-profit heath insurers, almost everyone would be against it.

The Republican plan shouldn't be considered one side of a great debate. It shouldn't be considered at all. Americans don't want it.

Which is why I get worried when I hear about so-called "bipartisan" groups on Capitol Hill seeking a grand compromise, such as the Senate's so-called "Gang of Six."

Senator Dick Durbin, Democrat of Illinois, a member of that Gang, says they're near agreement on a plan that will chart a "middle ground" between the House Republican budget and the plan outlined last week by the president.

Watch your wallets.

In my view, even the president doesn't go nearly far enough in the direction most Americans would approve. All he wants to do, essentially, is end the Bush tax windfalls for the wealthy -- which were designed to be ended in 2010 in any event -- and close a few loopholes.

But why shouldn't we go back to the tax rates we had thirty years ago, which required the rich to pay much higher shares of their incomes? One of the great scandals of our age is how concentrated income and wealth have become. The top 1 percent now gets twice the share of national income it took home thirty years ago.

If the super rich paid taxes at the same rates they did three decades ago, they'd contribute $350 billion more per year than they are now -- amounting to trillions more over the next decade. That's enough to ensure every young American is healthy and well-educated and that the nation's infrastructure is up to world-class standards.

Nor does the president's proposal go nearly far enough in cutting military spending, which is not only out of control but completely unrelated to our nation's defense needs -- fancy weapons systems designed for an age of conventional warfare; hundreds of billions of dollars for the Navy and Air Force, when most of the action is with the Army, Marines, and Special Forces; and billions more for programs no one can justify and few can understand.

If Americans understood how much they're paying for defense and how little they're getting, they'd demand a defense budget at least 25 percent smaller than it is today.

Finally, the president's proposed budget doesn't deal with the scandal of the nation's schools in poor and middle-class communities -- schools whose teachers are paid under $50,000 a year, whose classrooms are crammed, that can't afford textbooks or science labs, that have abandoned after-school programs and courses like history and art. Most school budgets depend manly on local property taxes that continue to drop in lower-income communities. The federal government should come to their rescue.

To think of the "center" as roughly halfway between the president's and Paul Ryan's proposals is to ignore what Americans need and want. For our political representatives to find a "middle ground" between the two would be a travesty.

Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.

 
 
 
 
 
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09:34 PM on 04/25/2011
If Mr. Reich thinks we can significantly raise more revenue by increasing the marginal rate on top earners, he is going to run headlong into reality: http://reason.com/assets/mc/mmoynihan/2011_04/vero5.png

He of all people should know the difference between a static analysis and a dynamic one.
09:41 AM on 04/25/2011
The problem is that we don't have a liberal party in this country. Not a major national party. A few liberal Democrats aside, what we've got is an extreme far right party and a centrist party. Any compromise that's made is between the radical right Republicans and the centrist Democrats (and on some issues, the current crop of Democrats certainly lean right).

So you get stuff like this. The Republicans put forward a horrible idea. Obama, instead of suggesting something left-leaning (which we'd expect if he had really ever been "the most liberal president ever"), puts forward the sort of centrist, acceptable-to-most-people plan that SHOULD be the end result of a compromise between right and left. But instead, it's his starting point for negotiation. What we'll eventually get will be halfway Obama's centrist proposal and the Republicans' insane garbage.
09:38 AM on 04/25/2011
Why not raise taxes on the "rich" 10% while cutting ALL spending 10%? Wouldn't that be more of a 'middle ground' position than just doing one of those as suggested by the Republicians or the Democrats? This is how you compromise, this is how you settle negotions on anything.
Unfortunally, neither side of this arguement seems to be willing to give on their demands. But that's what it is going to take to a meaningful solution to our debt problem.
Reich used two examples in his post: tearchers and schools (yes, they are two seperate things) Teachers are paid on a yearly basis: break the wage down by the hours in a school year and that $50000 per year , plus their summer jobs, and see just how "poorly" they are paid. And since there's a finite number of dollars in a school budget, every penny spent on teachers is money unavailable for textbooks, etc.
To increase taxes and increase spending is the redistrubion of wealth, not the way to solve our finiancial problems!
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journeyman steve
12:56 PM on 04/26/2011
Tithing derives from the Roman Catholic collection of 10% from EVERYONE. We don't have some folks, some poor, some rich, paying that much. If you want to collect all the poor people's 10%, put it into one hat, you'd find it's only the tax revenue from a single poorly taxed billionaire.
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journeyman steve
12:58 PM on 04/26/2011
I believe he was suggesting cuts, no number mentioned, in the second largest portion of national budget, military spending. If we cut it 10%, we'd still be double the 2000 level of expenditures for DoD. Let's add in "Motherland Security" department, it's insane. I doubt Reich has any problems cutting funding for the police state or the military. Nor does he say we can't cut expenditures from Medicare and SS for rich retirees. That's fair game also. Read more Reich posts. He can't keep repeating policy positions for those who don't stay current.
03:39 PM on 04/24/2011
God, I love this man !
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katmeyster
Proud practical progressive atheist
01:52 PM on 04/24/2011
"I'd wager if Americans also knew two-thirds of Ryan's budget cuts come from programs serving lower and moderate-income Americans and over 70 percent of the savings fund tax cuts for the rich -- meaning it's really just a giant transfer from the less advantaged to the super advantaged without much deficit reduction at all -- far more would be against it."

And how would Americans get to know this? Not from watching Fox -- and not from watching or listening to any of today's corporate media. We are in big trouble in this country when basic factual information is considered liberal or socialist. When even suggesting that government can do good things is considered unpatriotic.

The network news is the worst because they give the impression of being neutral and trustworthy, while refusing to provide facts that dispute the talking points. For example, they keep reporting on the "deficit problem" without explaining that this is a Republican cause meant to transfer wealth from the poor to the rich.

Democracy is doomed without a free and independent press.

But thank you Dr. Reich for trying -- maybe the Internet can save us :)
dkm101
dkm101
12:25 PM on 04/24/2011
Budgets are simple to figure out. Its just a distraction. Its the off-budget spending their trying to hide from the taxpayer.
12:24 PM on 04/24/2011
Well said. Anyone who has participated in collective bargaining knows that your starting position has to state more than you want so as to allow room for compromise. Obama's position should be to increase taxes on the top 10%, cut defense by 50% and increase Medicare to cover dental work.
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Piraticalsimian
I went to college AND the school of hard knocks
09:20 PM on 04/23/2011
This whole "middle ground" conversation is ludicrous to begin with! It presumes that both sides have valid arguments when they clearly do not. Supply side economics does not work. Full stop. To say that the Democrats have to meet the supply-siders half way is like saying that Galileo should have met the Catholic church half way. Sometimes one side is just plain wrong and the side that is right is not, in any way, required to attend to their misinformed point of view.
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Jack Mahoney
Endless wars bring down empires.
08:41 PM on 04/24/2011
Great analogy. Fanned.
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Paul Andrews
How To Absolutely Secure Your Computer
08:42 PM on 04/23/2011
http://www.britannica.com/facts/5/1081626/Bill-Clinton-as-discussed-in-workfare-social-welfare-program

How soon we forget. No more welfare recipients driving up in high end LEXUS or Mercedes
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Paul Andrews
How To Absolutely Secure Your Computer
08:39 PM on 04/23/2011
Gasoline in Orlando Fl is $5.69 for regular
07:28 PM on 04/23/2011
If you went after corporations and rich individuals who use tax havens you would get billions in revenue!
07:53 PM on 04/23/2011
Like how many billions?

We need trillions.
08:53 PM on 04/23/2011
$350BN/year times 3 years is $1TN. Out viking during the math lesson?
07:12 PM on 04/23/2011
"The Peoples Budget", just published by the House Progressive Caucus is a far better and more workable proposal than the other two. It is the budget we should be talking about.
07:21 PM on 04/23/2011
You base your analysis on what?

The web page?

Because they haven't introduced it nor have they submitted it to the CBO for scoring.

IMO, a lot of it is probably fluff or else they would submit it to the CBO.
08:25 PM on 04/23/2011
http://cpc.grijalva.house.gov/index.cfm?sectionid=70
Download the PDFs of the budget proposal and analysis and read for yourself.
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OneInEveryFamily
06:13 PM on 04/23/2011
As with all of your entries, well said. The President should be proposing greater deficit reduction than the GOP is proposing through tax increases greater than what he actually would like to see. All he has to do is come forward with a tax structure that would tax everyone who makes over 400k an average effective rate of 40%. Obviously, the rates would have to go to higher than 40% on very high incomes to achieve this but as long as the average effective rate is 40%, it would mean deficit reduction in the neighborhood of 400 Billion per year. Let that be the starting point.
06:54 PM on 04/23/2011
The President doesn't like to lead, I don't know if you've noticed that yet.
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Joe Meeker
Nos sunt legio.
03:43 AM on 04/24/2011
He's a leader as long as the teleprompter is running. He caves as soon as the pressure is on though.
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capitaldysfunction
White male never voted Republican
05:33 PM on 04/23/2011
You may be right about the center, Robert, but that won't stop Obama from compromising all the way to the post presidential corporate speech circuit. And it will not stop the Democrats from losing the 2012 elections despite all the HuffPoster kickazz highs.
joefoss
They'll never take my panache!
03:44 PM on 04/23/2011
Right On!
I only wish the president would reject the "false equivalence" of the Republicans, instead of embracing it, with his "move toward the center."
=For example, the Republicans want to kill Medicare; the Democrats want to save it. President Obama says he sides with his own party on this; but, I wonder if, as in the past, he will "compromise" (perhaps in return for raising the debt limit): "O.K., let's just take medical care away from 1/2 of our senior citizens."