Congress will debate and amend GOP budget proposals this week that make deep cuts in social spending while keeping low taxes for the wealthiest Americans. A staggering two-thirds of cuts in both the House and Senate GOP budgets shrink programs for people with low or moderate incomes, slashing funding for health care, food stamps, and education.
Those cuts are worth it, Republicans suggest, because the budgets will balance in ten years.
Progressive advocates and members of Congress argue that this is a backwards way to think about budgets—that the economy should serve the people, and not the other way around. They say the economy no longer works for people who work, given that wages have stagnated for the past 30 years while productivity, corporate profits, and economic inequality have all skyrocketed.
The progressive budget proposals have widespread support among Americans too.
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“Any reasonable budget looks at the needs of the American people and figures out a fair way to pay for those needs,” Sen. Bernie Sanders (I-VT) said Friday on a call with progressive bloggers.
Sanders is the top Democrat on the Senate Budget Committee, and a member of the Congressional Progressive Caucus (CPC). The CPC last week released its alternative “People’s Budget,” which promises “a raise for America” by investing up front in infrastructure, wage growth, social insurance, and full employment.
It won’t pass in this Congress, but supporters hope that it will get about 100 votes in the House and show voters the stark difference between conservative and progressive priorities.
The budget includes some ambitious proposals. It invests in education and family economic security with universal pre-kindergarten, debt-free four-year college education, minimum wage increases, more funding for affordable housing and food stamps, a direct public works hiring program, and initiatives for paid family leave and child care.
The People’s Budget proposals aren’t radical.
There’s a more comprehensive family leave insurance proposal in Congress right now, for instance. Many of the proposals have already been suggested by President Obama or more mainstream congressional Democrats, who have also released their own alternative budget that closely tracks with the president’s. For the first time, that budget also includes a financial transaction tax on the wealthy, also a feature in the CPC budget.
The CPC’s People’s Budget invests $820 billion in infrastructure upgrades, more than Obama or congressional Democrats—but the American Society of Civil Engineers estimates that $1 trillion is needed just to make required upgrades, and $3.6 trillion by 2020 to make more robust improvements.
The CPC budget wouldn’t raise tax rates for the wealthy to sky-high levels. It would only return those taxes to Clinton-era rates for higher income households. The CPC’s budget gains other new revenue by ending corporate tax loopholes and establishing more progressive estate and capital income taxes.
Polls show that 66 percent of Americans think the wealthy pay too little in taxes, 70 percent oppose the cuts to food stamps that Republicans favor, and large majorities favor paid leave, equal pay, and affordable child care, and say the government has a responsibility to ensure employers treat employees fairly by providing those policies.
The GOP budgets don’t include any new funding for job creation, wage increases, or family-friendly policies like paid leave and affordable child care. The budgets would cut the Earned Income Tax Credit and Child Tax Credit, cut Pell grants for low-income college students, and repeal the Affordable Care Act, and with it the health-care coverage of 16 million Americans, all while either lowering corporate tax rates or not changing them at all.
The People’s Budget doesn’t “balance” like the austerity-minded Republican budgets do, but it reduces deficits nonetheless. And many economists say that’s just fine, especially because the economy is fundamentally unbalanced right now when it comes to inequality.
“Why would we need a balanced budget?” Thomas Hungerford, senior economist at the Economic Policy Institute, told Rewire. “The thing is, you want to have a budget with deficits that are sustainable.”
The CPC budget achieves that, he said, while also cutting poverty, boosting GDP, and working to reduce income inequality.
“This argues that there is a need for higher spending levels for public investments, for the general welfare, that this rich country can afford,” Hungerford said.
Progressive lawmakers are also attempting to shift the discussion from budget deficits, which are abstract to many Americans, to something more real: the “deficits” in the nation’s education, infrastructure, wages, and social safety net.
The obsession with “balanced budgets,” Sanders said, is like the old saying, “The operation was a success, but the patient died.” Prioritizing balanced budgets instead of accepting a reasonable level of debt and sustainable budget deficits, he said, causes millions to suffer and leads to higher wealth inequality.
“In the Congress, we operate in a frame of scarcity, as if there’s just not enough money,” Rep. Jan Schakowsky (D-IL) said on the call with bloggers. “And I think it’s really important to note that the United States of America has never been richer.”
It’s just that the distribution of that wealth is skewed toward the top, Schakowsky said.
The most important question for any budget, Schakowsky said, is: “Does it lessen income inequality, or worsen it?”