Our Common Good

A Progressive Deficit Reduction Plan

  1. Repeal all of the 2001 and 2003 Bush tax breaks for the top two percent.  Repealing the 2001 and 2003 tax breaks for the top two percent would reduce the deficit by about $1 trillion over the next decade.  After President Clinton increased taxes on the top two percent, the economy added over 22 million jobs.  After President Bush reduced taxes for the rich, the economy lost over 600,000 private sector jobs. 
  2. Create an emergency deficit-reduction surtax on millionaires.  Enacting a 5.4 percent surtax on adjusted gross income of more than $1 million would raise over $383 billion over 10 years, according to the Joint Tax Committee.  According to a February 2011 NBC News/Wall Street Journal poll, 81 percent of the American people support the creation of a millionaires surtax to reduce the deficit.
  3. End tax breaks and subsidies for big oil, gas and coal companies.  If we ended tax breaks and subsidies for big oil, gas, and coal companies, we could reduce the deficit by more than $113 billion over the next ten years.  The five largest oil companies in the United States have earned about $1 trillion in profits over the past decade. 
  4. Establish a Wall Street speculation fee of 0.03 percent on the sale of credit default swaps, derivatives, stocks, options, and futures.  Both the economic crisis and the deficit crisis are a direct result of the greed and recklessness on Wall Street.  Establishing a speculation fee would reduce gambling on Wall Street, encourage the financial sector to invest in the productive economy, and reduce the deficit by $350 billion over 10 years without harming average Americans. 
  5. Eliminate tax breaks for companies shipping American jobs overseas.  Today, the U.S. government is actually rewarding companies that move U.S. manufacturing jobs overseas through loopholes in the tax code known as deferral and foreign source income.  During the last decade, the U.S. lost about 30% of its manufacturing jobs and over 56,000 factories have been shut down.  If we eliminated these tax loopholes, the Joint Tax Committee has estimated that we could raise more than $582 billion in revenue over the next ten years.
  6. Prohibit abusive and illegal offshore tax shelters.  Each and every year, the United States loses an estimated $100 billion in tax revenues due to offshore tax abuses by the wealthy and large corporations.  The situation has become so absurd that one five-story office building in the Cayman Islands is now the “home” to more than 18,000 corporations.  The wealthy and large corporations should not be allowed to avoid paying taxes by setting up tax shelters in Panama, the Cayman Islands, Bermuda, the Bahamas or other tax haven countries.  Cracking down on offshore tax shelters could reduce the deficit by as much as $1 trillion over the next decade.
  7. Establish a currency manipulation fee on China and other countries.  As almost everyone knows, China is manipulating its currency, giving it an unfair trade advantage over the United States and destroying decent paying manufacturing jobs in the process.  If we imposed a currency manipulation fee on China and other currency manipulators, the Economic Policy Institute has estimated that we could raise $500 billion over 10 years and create 1 million jobs in the process.
  8. Tax capital gains and dividends the same as work.  Taxing capital gains and dividends the same way that we tax work would raise more than $730 billion over the next decade.  Warren Buffet has often said that he pays a lower effective tax rate than his secretary.  The reason for this is that the wealthy obtain most of their income from capital gains and dividends, which is taxed at a much lower rate than work.  Right now, the top marginal income tax for working is 35%, but the tax rate on corporate dividends and capital gains is only 15%. 
  9. Establish a Progressive Estate Tax.  If we established a progressive estate tax on inherited wealth of more than $3.5 million, we could raise more than $300 billion over 10 years.  Sen. Sanders introduced the Responsible Estate Tax Act that would reduce the deficit in a fair way while ensuring that 99.7 percent of Americans who lose a loved one would never see a dime of their loved one’s estate paid in federal estate taxes.
  10. Reduce unnecessary and wasteful spending at the Pentagon, which now consumes over half of our discretionary budget.  Much of the huge spending at the Pentagon is devoted to spending money on Cold War weapons programs to fight a Soviet Union that no longer exists.  Sen. Tom Coburn (R-OK) and Lawrence Korb, an Assistant Secretary of Defense under Ronald Reagan, have estimated that we could achieve significant savings of around $100 billion a year at the Pentagon while still ensuring that the United States has the strongest and most powerful military in the world. 
  11. Require Medicare to negotiate for lower prescription drug prices with the pharmaceutical industry.   Requiring Medicare to negotiate drug prices, similarly to what the VA currently does, would save more than $157 billion over 10 years. 
  12. Eliminate waste, fraud, and abuse within every federal government agency.  Virtually everyone agrees that there is waste, fraud, and abuse in every agency of the federal government.  Rooting out this waste, fraud, and abuse could save between $150 billion and $200 billion over the next 10 years.

(via Bernie Sanders - U.S. Senator for Vermont)

shihtzuman:

1) Democrats have offered a comprehensive proposal that meaningfully details the tax hikes they would like to see and contains substantial deficit reduction, but Republican leaders have not offered a comprehensive proposal that meaningfully details the spending cuts they would like to see. And what Republicans have proposed — such as it is — doesn’t contain nearly as much in deficit reduction as the Dem plan does.

CBO | Monthly Budget Review

The federal government’s fiscal year 2012 has come to a close, and CBO estimates that the federal budget deficit for the year was about $1.1 trillion, approximately $200 billion lower than the shortfall recorded in 2011. The 2012 deficit was equal to 7.0 percent of gross domestic product, CBO estimates, down from 8.7 percent in 2011, 9.0 percent in 2010, and 10.1 percent in 2009, but greater than in any other year since 1947. CBO’s deficit estimate is based on data from the Daily Treasury Statements; the Treasury Department will report the actual deficit for fiscal year 2012 later this month.

Spending Myth 1: Today’s deficits have taken us to a historically unprecedented, economically catastrophic place.

This myth has had the effect of binding the hands of elected officials and policymakers at every level of government. It has also emboldened those who claim that we must cut government spending as quickly, as radically, as deeply as possible.

In fact, we’ve been here before. In 2009, the federal budget deficit was a whopping 10.1% of the American economy and back in 1943, in the midst of World War II, it was three times that — 30.3%. This fiscal year the deficit will total around 7.6%. Yes, that is big. But in the Congressional Budget Office’s grimmest projections, that figure will fall to 6.3% next year, and 5.8% in fiscal 2014. In 1983, under President Reagan, the deficit hit 6% of the economy, and by 1998, that had turned into a surplus. So, while projected deficits remain large, they’re neither historically unprecedented, nor insurmountable.

More important still, the size of the deficit is no sign that lawmakers should make immediate deep cuts in spending. In fact, history tells us that such reductions are guaranteed to harm, if not cripple, an economy still teetering at the edge of recession.

[E]vents that occurred before January 2009 and the precipitous decline in tax revenues account for about 83 percent of the difference between what the 2012 deficit actually is and what it was expected to be five years ago. The other 17 percent, approximately $115 billion, is the result of higher-than-expected spending.

And of that $115 billion, about $100 billion came from increased defense spending…

[M]ost of that [non-defense] spending is recession-related: the last vestiges of the American Recovery and Reinvestment Act and higher-than-normal unemployment insurance payments.

The government will run a $1.1 trillion deficit in the fiscal year that ends in September, a slight dip from last year but still very high by any measure, according to a budget report released Tuesday.

The Congressional Budget Office report also says that annual deficits will remain in the $1 trillion range for the next several years if Bush-era tax cuts slated to expire in December are extended, as commonly assumed — and if Congress is unable to live within the tight “caps” the lawmakers themselves placed on agency budgets last year.

Here’s one way Congress can trim the nation’s record deficits: Do nothing.

Keeping Congress gridlocked on budget issues would cut the projected annual federal deficit in half by the next fiscal year and set the trend on a downward path for years to come.

Legislation already on the books, if left alone, would do several things: Tax cuts passed under President George W. Bush's administration would expire Dec. 31, generating more revenue. And deep budget cuts passed as part of last summer's debt ceiling deal would be automatically triggered, slashing spending in 2013.

Pain would come with the progress, however. If Congress agreed to let such politically difficult choices stand, the short-term effect would curtail the nation’s modest economic growth. The unemployment rate would rise back above 9% next year, a result of substantial reductions to the federal workforce and sluggish demand, according to the latest report from the Congressional Budget Office.

This is the Catch-22 facing Congress and driving the presidential campaign. Tea party members want to reduce government spending. Democrats want to raise taxes on the affluent. And economists warn that sudden budget cuts or tax increases can damage a recovering economy. How lawmakers balance the competing interests will be at the crux of the debate that has become the nation’s defining domestic issue.

The government will run a $1.1 trillion deficit in the fiscal year that ends in September, a slight dip from last year but still very high by any measure, according to a budget report released Tuesday.

The Congressional Budget Office report also says that annual deficits will remain in the $1 trillion range for the next several years if Bush-era tax cuts slated to expire in December are extended, as commonly assumed — and if Congress is unable to live within the tight “caps” the lawmakers themselves placed on agency budgets last year.

U.S. Sen. Saxby Chambliss said Wednesday that the failure of a deficit-cutting supercommittee to strike a deal means the so-called Gang of Six is back in business.

The Republican senator from Georgia told The Associated Press by telephone Wednesday that the bipartisan group will meet after the Thanksgiving break and craft legislation mirroring the plan it unveiled earlier this year. That sweeping deficit-reduction plan included reforms to entitlements, deep spending cuts and additional revenues. It would have trimmed the deficit by about $4 trillion over the coming decade but failed to move.

Instead, as part of deal brokered to raise the nation’s debt ceiling, a supercommittee was established. That panel’s failure to reach agreement to cut deficits by $1.2 trillion or more over 10 years triggers deep, automatic cuts to the Pentagon budget and domestic programs starting in 2013.

Chambliss said the Gang of Six, a bipartisan group of senators, has kept in contact. The group held a conference call on Tuesday to discuss a way forward. With limited time, Chambliss said, the group’s work could be important.

"Can we reform the tax code in the next 30 days? I doubt it. Can we reform Medicare and Medicaid in the next 30 days? I doubt it. But I think we have the framework for legislation that could move the debate," Chambliss said.

 OccupyWashingtonDC.org seeks a major transformation to a participatory democracy in the economy as well as in government. For forty years, concentrated corporate interests have acted with intent to take over government and other institutions. We seek an end to the rule of concentrated wealth and corporate power by shifting control, wealth and ownership to the people.

This report puts forward evidence-based solutions that will re-start the economy and avoid placing financial burdens on future generations.  For the most part these ideas are not new.  They are well accepted by economists and are consistent with the views of super majorities of Americans on key issues.  Further, more than three-quarters of U.S. citizens say the country’s economic structure is out of balance and “favors a very small proportion of the rich over the rest of the country.” They are right. The solutions to our economic crisis are evident but they are blocked by those who profit from the status quo and control elected officials through the corrupt U.S. political system and its money-based elections.

The elites in Washington, DC seek to erase deficits that were caused by increases in war and military spending, tax breaks for the wealthy and corporations, the increased cost of health care, as well as bank bailouts, and increased costs and lost revenue from the economic collapse. The bi-partisan elites seek to cut $1.2 trillion in deficits even though there is no outcry for such cuts or evidence in the economy that they are urgently needed.  They are proposing cuts in services to seniors, students, the poor and middle-working class households who did not cause the crash but already suffer from its consequences. This report shows that we can get the economy moving, reduce the wealth divide and control government spending while helping the 99%.

This report should not be considered the demand of the Occupy Movement. It was prepared[1] by one Occupation, Freedom Plaza in Washington, DC and it does not reflect even that Occupation’s full demands.  Most of this report provides solutions to the deficit questions the Congressional Super Committee is attempting to address while also re-starting the economy.  The difference between the Occupied Super Committee report and the Congressional Super Committee report will be stark and further demonstrate the corruption and dysfunction of government.  While this report’s recommendations would benefit the 99%, the report that will come out of the congressional Super Committee will benefit the 1%. 

Where the divide is right now is on taxes and whether the wealthiest Americans should share in the sacrifice that all of us have to make. That’s the decision. It’s what we are waiting for.
Sen. Patty Murray (D) of Washington, one of the co-chairs of the deficit supercommittee, making clear that with just 5 days left before the deadline to come up with $1.2 trillion in cuts, Democrats and Republicans are still deadlocked over the same basic point. (via dcdecoder)
Accountability Deficit

progressivefriends:

Just ran across this via a post from Americablog. This is called the “Accountability Deficit” and appeared in Mother Jones in Jan/Feb 2010. If you have time for nothing else take a look at the charts. Charts are clickable to enlarge them. The charts are invaluable to aid in understanding just exactly what happened and why during the most recent “Too Big To Fail” economic meltdown.

http://motherjones.com/toc/2010/01

Comments are encouraged and welcome.