Our country must address four major challenges simultaneously: job creation, deficit reduction, American competitiveness and a moral obligation to ensure that the most vulnerable among us have a safety net. The plan President Obama laid out this week passes that test.
Unfortunately, the Republican 2012 budget, which passed the House today, not only fails all four tests, but rips the safety net out from underneath our seniors and working Americans, while making the middle class, the heart and soul of our country, pay the price for tax cuts for the wealthiest among us.
Right now, we have historic levels of income inequality as real wages for working Americans have not kept up with economic growth. Since 1979, U.S. productivity has grown by 80 percent, but the average hourly wage has grown by only 10.1 percent. In 2008, the wealthiest one percent of Americans earned more than 20 percent of the nation's total income, and tax rates for the wealthiest are at historic lows. It's so off-balance that millionaires have written to the President to say "We don't need more tax cuts" and "We are eager to do our fair share."
Yet, last year, Republicans demanded a tax cut extension that gave away $139 billion to millionaires and billionaires. Taxpayers with income over $1 million got an average income tax cut of $128,832. But the middle 20 percent of taxpayers got an average income tax cut of only $880.
Today, House Republicans voted for a budget that would make the situation worse. Seniors, students and working families would pay the price to protect oil company tax subsidies and to provide even more tax breaks for multi-millionaires and billionaires.
And it would have us walk away from our commitments to seniors and the most vulnerable. This proposal ends Medicare as we know it, increasing costs and cutting benefits for seniors while abandoning the promise of health care made to Americans who spent a lifetime paying info a system.
In fact, under their plan, out of pocket health care costs for seniors 65 years or older could double.
And the Republican agenda dismantles Medicaid, increasing costs and lowering the quality of nursing home care for millions of seniors.
Even worse for our economy, economists estimate the Republican plan would cost us 2.2 million jobs in just two years.
In contrast, President Obama has outlined his plan to reduce the federal debt by $4 trillion over 12 years through a careful balance of spending cuts and revenue increases. His proposal invests heavily in job creation and competitiveness: doubling exports by 2014; investing in transportation, high-tech infrastructure, and clean energy; and renewing our focus on science and technology education.
And it preserves our social contract with the elderly, the needy, and the most vulnerable, providing stability and security to all Americans. It saves and strengthens Medicare. It builds on the Affordable Care Act by investing in improving the quality of health care. It is designed to save $1.4 trillion in health costs by improving efficiency and accountability. And it maintains Social Security, Pell Grants, food stamps and other important components of our social safety net.
The Democrats record on balancing the budget speaks for itself. It was the Democrats in Congress, working with President Clinton in the 1990s, who balanced the budget.
At the time, Republicans in the House and Senate opposed that plan. One Republican Senator said, "Make no mistake, these higher rates will cost jobs." Another Senator said at the time, "I really do not think it takes a rocket scientist to know this bill will cost jobs." But they were wrong -- it led to a robust economy, record-setting surpluses and 23 million new jobs.
So we know how to balance the budget, because we did it before. And we did it again, in 1998, 1999, and 2000.
President Obama's proposal is not based on mythology, it's based on history -- making tough choices that spur job-creating investments while reining in deficits and saving landmark legislation like Social Security and Medicare which have given dignity to millions of Americans.
The road ahead of us will not be easy. If we tackle our greatest challenges by learning from our past successes we will reduce our deficits the responsible way and enter an era of prosperity and fairness.