The Budget Nobody NoticedMay 3, 2011 - by Donny Shaw
As Congress resumes working on the 2012 budget, almost all of the discussion will be on striking a deal between the President’s proposal and the House Republicans’ proposal. But there is another budget proposal in Congress that would do far more than either of those for eliminating deficits, reducing the debt and ensuring solvency of our entitlement programs. The Progressive Caucus’ “People’s Budget” would produce budget surpluses by 2021 — the GOP budget would still be producing annual deficits of more than $400 billion at that point — and would add more than $2 trillion less to the debt than the GOP plan over the ten year period. How would it work? By doing things most members of Congress are afraid to go anywhere near, like raising tax rates for the rich and making major cuts to the military budget.
The folks at Main Street Insider have put together a 90-second summary video of the People’s Budget ::
…as well as the text summary below:
1) Raises $3.9 trillion in new revenue over ten years by:
• Immediately rescinding the upper-income tax cuts from December’s tax cut deal and letting the upper-income Bush tax cuts expire at the end of 2012;
• Enacting new income tax brackets that range from 45% starting at $1 million to 49% on $1 billion and over;
• Taxing all capital gains and dividend income as ordinary income;
• Capping deductibility of itemized deductions at 28% (as proposed by President Obama in 2009);
• Enacting a financial speculation tax on derivatives and foreign exchange transactions, and a special fee on large banks to cover the cost of future bailouts;
• Making the estate tax more progressive by adopting a $3.5 million exemption, 45% rate up to $50M, 55% up to $500M, and 65% for the portion of estates valued over $500 million;
• Closing tax loopholes for multinational corporations by taxing their income as it is earned.
2) Cuts $1.7 trillion in spending over ten years by:
• Eliminating tax subsidies for fossil fuel companies;
• Enacting a public health insurance option and negotiating prescription drug costs with pharmaceutical companies;
• Ending the wars in Afghanistan and Iraq and decreasing baseline defense spending;
• Saving $856 billion in interest payments on the debt over the next decade as a result of the lower deficit levels.
3) Makes targeted investments to spur economic recovery:
• $1.45 trillion over 10 years, primarily for education and job training, renewable energy, health, housing and veterans benefits;
• An infrastructure bank designed to leverage private sector investment in transportation, water and energy projects;
• A large increase ($213 billion overall) in the funding provided by a surface transportation reauthorization bill.
4) Ensures Social Security solvency for the next 75 years through increased revenues:
• For the half of the payroll tax paid by employees, adjusting the taxable maximum to equal 90% of total payroll;
• For the half of the payroll tax paid by employers, eliminating the maximum income level subject to taxation entirely.
This has been voted on too. It was introduced as a substitute to the House Republican budget, but failed by a vote of 77-347. Democrats were split 77 in favor and 108 against. No Republicans voted for it.
Progressive Caucus Chairman, and sponsor of the People’s Budget, Rep. Raul Grijalva [D, AZ-7] is pictured above.