Budgets are pure EGO -- eyes glaze over. But this week revealed two budgets -- Rep. Paul Ryan's Republican "Path to Prosperity" 2014 budget and the Congressional Progressive Caucus "Back to Work Budget" -- that in stark terms lay out two visions and two futures for America. Next week the Congress will vote on each one of them. Neither will become law, but Ryan's budget is expected to pass with the support of virtually the entire Republican majority. The CPC budget will struggle to win a majority of the Democratic caucus. For those who take a look, the contrast will open your eyes.
Both parties agree that we suffer from mass unemployment, declining wages, and growing inequality. Both agree that rising future deficits should be addressed. But they offer completely different responses to these realities.
Ryan's budget is a retread of his previous offerings, the same ideas that were rejected by voters in the 2012 election. Like the old Bourbon kings, he has learned nothing and forgotten nothing. Once more he doubles down on the failed ideas of the past, and once more he brazenly seeks credit for making hard choices while refusing to tell us what those choices are. The cowardice and lack of candor reflect just how unpopular these ideas are.
The basic strategy is the same; the only new packaging is the pretense of balancing the budget in 10 years. Ryan does that by adopting the $600 billion in "fiscal cliff" taxes that Republicans voted against, the Medicare tax hikes that were part of the Obamacare that Ryan proposes to repeal, and, most brazenly, the infamous $716 billion in "Medicare cuts" that Ryan and Romney and legions of Republicans have railed against over the last two election cycles.
Ryan's basic strategy is unchanged. He would lower rates on income and corporate taxes. He does this despite studies showing that lowering rates over the last decades have produced more inequality, but not more growth. With the top 1 percent capturing a staggering 121 percent of the income growth coming out of the Great Recession, and corporate profits at record highs as a percentage of the economy, Ryan still argues that if they just had more money, they would start investing here at home.
The lower tax rates, Ryan claims, will be paid for by closing loopholes and eliminating "tax expenditures" -- only he reveals none of those that he would close. Studies show millionaires could give up all their tax deductions and still pocket a big tax break from the Ryan plan. By definition, middle class families will end up paying more -- and will face the loss of tax deductions for mortgages, for employer-based health care, for state and local taxes and more. No wonder Ryan doesn't want to reveal what's behind the curtain.
Ryan then calls for cutting $4.6 trillion in spending over 10 years from projected levels. $2.5 trillion of that comes from repealing Obamacare and gutting Medicaid. That will leave, according to estimates of the Urban League and the Congressional Budget Office, 40 to 50 million more poor and middle-income Americans uninsured, even as the wealthy and multinationals pocket their tax breaks. In addition, Ryan promises to dismember Medicare 10 years from now, turning it into a voucher that will push more and more costs on seniors over time.
Ryan would cancel the "sequestration cuts" for the military over the next decade while cutting even more from domestic services. All domestic services -- education, border patrol, workplace safety, food and drug monitoring, research and development, Head Start, infant nutrition, etc. -- would be cut to levels not seen in modern times. Naturally, Ryan does not identify what would be cut.
His budget calls for savaging spending in other mandatory programs -- targeting Pell Grants, food stamps, school lunches, the Earned Income Tax Credit, the Child Tax Credit, and supplementary support for the aged and the disabled poor. The bulk of his cuts will come from the most vulnerable among us.
The combination of tax cuts that add little to growth and deep spending cuts will be a jobs killer, with the Economic Policy Institute estimating the loss of about 2 million jobs in the first year of the Ryan plan. This would likely drive the economy back into a recession,
Republicans have voted for this budget plan in the past, and are expected to pass it again next week. It reflects who they are and what they believe in. Republicans are truly the champions of the 1 percent. They truly do believe that the rich bear too great a burden and the "47 percent" too little.
The CPC Back to Work Budget
Unlike Ryan's budget, the CPC Back to Work Budget did not receive a flood of mainstream media coverage. This is regrettable because it demonstrates that there is a dramatic alternative direction for America -- a program designed to rebuild the middle class and strengthen our ability to compete in the next century, even as we get deficits under control. And in stark contrast to the Ryan budget, the CPC budget is candid -- it lays out what it would tax and what it would cut, where it would invest and where it would save.
The CPC starts with the assumption that mass unemployment is a crisis that is not going away. So it begins with a program to put people back to work, the necessary first step in getting our books back in order.
Its budget invests in a bold plan to rebuild our decrepit infrastructure, fund school modernization, provide aid to states to rehire teachers and cops, and target jobs corps for the most distressed communities. It would generate nearly 7 million jobs in the first year alone. They would increase deficits in the short term, but pay for the program over the decade.
The CPC would protect Medicare, Medicaid and Social Security and strengthen Obamacare. It would intensify the effort to bring health care costs under control by challenging special interests, not by cutting benefits. So it advocates adopting a public option to compete with private insurance companies, negotiating bulk discounts on prescription drugs, and cracking down on waste and fraud in our health care system.
CPC would also exact savings by taking on entrenched interests. It reduces the bloated Pentagon budget, challenging the military-industrial complex. It revokes subsides for oil and gas and coal companies, taking on Big Oil and King Coal. It calls for ending subsidies for corporations shipping jobs abroad, and for closing down corporate tax havens, taking on the multinational lobby.
The CPC pays for its investment agenda with broad progressive tax reform. It would allow the Bush tax cuts to expire for families earning over $250,000, which was the centerpiece of the last campaign. It would add higher brackets for millionaires and billionaires. It would tax investor's earnings at same rates as income for workers.
It then proposes taxes that will help rebalance the economy. It calls for a financial transaction tax that would help reduce excessive Wall Street speculation. It would impose a Financial Crisis Responsibility Fee on big banks that still are too big to fail. The CPC budget also advocates a carbon tax, with a rebate to lower income households, to aid the transition to sustainable clean energy.
The result is a budget that invests billions to rebuild the country and put people back to work, while bringing our deficit under control by continuing to reform health care, curbing special interest subsidies and asking the wealthy and the global corporations and banks to pay their fair share. This isn't radical; it isn't even Social Democracy. At the end of the decade, outlays are 23.5 percent of GDP; the deficit is down to 1.2 percent (actually lower than it needs to be to be sustained idefinitely) and the debt is down to 68.7 percent and falling.
Virtually every element of this budget -- protection of Medicare, Medicaid and Social Security, investment in areas vital to our future, rollback of special interest subsidies and tax breaks, a more progressive tax code, saving money on the military by ending the wars -- reflects the opinion of the majority of Americans. Provided a choice between Ryan's path and that of the CPC, there is little doubt where Americans would line up.
The question, of course, is where Congress lines up. Each of these budgets will come up for a vote of the full House next week. The Campaign for America's Future and a range of other groups are mobilizing a campaign asking citizens to contact their legislators and tell them to vote against Ryan's jobs killing and for the CPC Back to Work Budget. To join us, go here. There will not be a clearer measure of where your legislator stands, and what he or she is prepared to fight for. Republicans will line up like lemmings behind Ryan. It's time for Democrats to show where they stand and vote for the CPC Back to Work Budget.