The federal government has finally shut down due to a failure to compromise between the Democrats and the Republicans. With all this debate about government spending, federal debt and taxes, one may be surprised to learn there is another option on the table.
Both political parties are financed and supported by big business, based on both of their proposed budgets. From the Republicans, the proposals include major spending cuts and tax cuts which they claim will end the federal deficit by 2035.
This proposal would be similar to Reaganomics and would drastically increase the income and wealth gap in the United States.
On the other hand, President Barack Obama’s proposal is only marginally better: It demands some revenue increase while at the same time lowering the corporate tax rate. This allows most of the Bush tax rate to be made permanent and makes trillions in cuts to spending while still supporting corporate welfare.
When the Bush tax cuts expired in January, instead of allowing them to expire and enjoying the increased revenues, Obama made a deal to cut taxes and make them permanent. According to liberation fiscal conservative Grover Norquist, Obama and the Democrats preserved 84 percent of the Bush tax cuts and made them permanent.
This rightward shift in public policy is an outrage and a betrayal to liberals and the poor and middle class. Fortunately, there is a third way that could set the United States on a path to prosperity in 10 years — the People’s Budget.
The Progressive Caucus of the U.S. House of Representatives has had a proposal to balance the federal budget since 2011 called the People’s Budget. While Obama and the Republicans support cuts to entitlements, the Progressive Caucus has worked out a way to preserve them and still balance the budget.
The first major pillar involves revenues. All tax rates should return to Clinton-era levels when the economy was booming and the government had surpluses. The bill also proposes a higher tax rate for the millionaires and billionaires. It would raise taxes to 45 percent for those earning more than $1 million per year and 49 percent for those who earn more than $1 billion per year.
Another revenue change would be in the tax structure. All capital gains would be considered income and taxed accordingly. For example, Mitt Romney made $13.7 million in 2011. This is more than $1 million earned per month, yet he paid a lower tax rate than those in the middle class.
The People’s Budget ends all corporate loopholes and also ends subsidies for energy companies. ExxonMobil doesn’t need subsidies since they make more than $40 billion in profit per year.
The bill would also cut defense and overseas military spending and put a tax on financial speculation, derivatives and foreign exchange.
The Progressive Caucus proposal is the only budget that strengthens the entitlement programs instead of cutting them. First by affecting health care by adding a public option and allowing government to negotiate the price of prescriptions.
Second, it would end the tax rate cap on social security payroll tax which would drastically increase the solvency of Social Security in the long run.
It is hard to believe that this budget proposal has been available for more than two years, yet after winning re-election, Obama didn’t mention or push for it. It seems that Obama, like Congress, is bought and paid for by the corporations and the rich, and proposals like this will likely never make it on headline news or on Obama’s campaign websites.
It is outrageous that the Democrats and Republicans have destroyed American financial credibility to the point that S&P downgraded us in 2011. The American people seriously need to stop settling for this dual party system where both parties put the nation’s interests second to their party’s donors’ interests.
The solution to this budget crisis is for an overhaul of not just the budget but the political system, and the people need to be the source of the reform instead of passive voters.
No more voting for change. Let’s actually be the change.