Introducing the People’s Budget

As you no doubt know, President Obama and congressional leaders were able to avert a government shutdown by reaching an agreement on the 2011 budget late Friday night. While we don’t yet know all the facts, it looks as though the Republicans were not successful in their attempts to defund public broadcasting, and stop the EPA from regulating greenhouse gas emissions. At the same time, though, it doesn’t appear that the Democrats were able to shift the burden from the backs of poor and middle class Americans to the top 1% that we keep talking about. (It’s unclear whether they even tried.) Here, with more on these deliberations, as well as those concerning the 2012 budget, is economist Jeffrey Sachs, director of the Earth Institute at Columbia University, speaking with Democracy Now’s Amy Goodman.

And here’s a clip from the transcript:

…AMY GOODMAN: Plouffe made it clear that the House Republicans’ alternative, crafted by House Budget Committee Chair Paul Ryan, Republican of Wisconsin, was unacceptable. He said, “Ryan’s [plan] might pass the House, but it’s not going to become law.”

Obama is also expected to propose cuts to entitlement programs, including Medicare and Medicaid, and changes to Social Security, a discussion he has largely left to Democrats and Republicans in Congress.

Well, to discuss the budget deal, we’re joined right now by leading economist Jeffrey Sachs of Columbia University. He is director of the Earth Institute at Columbia and also president and co-founder of Millennium Promise Alliance, a nonprofit group aimed at ending extreme global poverty. He’s the author of numerous books and articles on development and economic policy.

Welcome to Democracy Now! Your understanding of what this agreement is?

JEFFREY SACHS: Well, this is a miserable step in the wrong direction. It started last December, when Obama and the Republicans agreed to cut a trillion dollars of taxes by extending the Bush tax cuts. And now, even though the details aren’t even worked out, apparently, they’re slashing into programs for the poor. So this is all going in the wrong direction, and many of us who supported President Obama just feel that he’s abandoned the field. He’s left it to the right wing, which wants nothing more than taxes cut for the rich, whereas the American public is saying very clearly, in every opinion survey, one after another, if you want to close the deficit, go after taxes for the rich, raise them, cut military spending, cut the excess profits in the insurance industry and healthcare, do things that would really make a difference—don’t punish the poor. And yet, that’s what Obama is giving up right now. It’s absurd. And when Plouffe says, “Well, it’s unacceptable that the taxes on the rich have come down,” the President not only agreed to that last December, but when they announced the compromise this weekend, he referred to that historic agreement last December. So the whole thing is a bit of a mass confusion, and I find it absurd.

AMY GOODMAN: Talk about the four proposals.

JEFFREY SACHS: I say that there really are four proposals on the table right now. One is the Ryan plan; that is the extreme right: just do anything, slash anything, hit the poor, in order to get the tax rates down on the rich. It’s a fraud. But they have momentum because Obama is not resisting.

Then there was Obama’s muddle, because he put forward a budget plan last month, after all, not only for fiscal year 2012, but a decade-long framework. He agreed to keep taxes so low on the rich that, in effect, his proposals, if you look at the fine print, would squeeze the so-called civilian discretionary budget, where education, where infrastructure, energy, climate would all be squeezed to an unmanageable small level.

Then there’s a new proposal that the Congressional Progressive Caucus put forward last week. Terrific. It’s called the People’s Budget. It actually responds to what the people want, and that is, raise taxes on the rich, raise taxes on the corporations that are getting away with absolute unbelievable—unbelievably abusive loopholes, cut military spending, preserve spending for the poor, for education, for investment and so forth.

Then there’s a fourth position. That’s the American public. You notice the American public isn’t asked by Congress or the President these days, but the American public speaks clearly in opinion survey after opinion survey. It says the rich have had a free ride, the corporations have been running our country, the spending on the military is completely unjustified, and we want a public option on healthcare. All large majorities, not one of them happening. Why? Because the lobbyists are in control, both of the White House and Congress….

AMY GOODMAN: Talk more about the People’s Budget.

JEFFREY SACHS: The People’s Budget is a proposal of the leadership of 80 members of Congress, which is called the Progressive Caucus.

AMY GOODMAN: The largest caucus in Congress.

JEFFREY SACHS: I was so happy to see it when I saw it for the first time last week as it was being unveiled. I said, “Thank God. Something coming from Washington that makes sense,” because they, too, have been crowded out. The White House has played a game, basically. If the far right is holding the agenda, the White House says, “We’ll be one step towards the center of the far right.” But that means giving concession after concession after concession. What Obama is trying to do is to look reasonable, to look a little bit more reasonable than the extreme right. But to do so, he’s just compromising, compromising on core principles.

Then, finally comes the Congressional Progressive Caucus and says, “Stop it. Let’s do what the people really want.” This is the wonderful thing about America. Sometimes you feel so frustrated: “What’s going on in this country?” as if everybody’s a Tea Partier. It’s not true. The broad majority of the public has very reasonable, very mainstream and compassionate views. They say, “Don’t slash for the poor. No, let’s start making the rich pay their due.” That’s what the public says, the large majority. Who’s listening? Or who’s hearing them? The media keeps them out, by and large. And the White House and the Congress are dominated by the lobbies and by the concern about raising campaign funds. After all, President Obama is trying to raise a billion dollars for his 2012 election. Where is he going to get that? On Wall Street. Are they telling him, “Raise the taxes”? Unfortunately not…

So, I’ve been spending the last hour or so reading up on the People’s Budget, and it looks pretty damned good. Here are the highlights:

The CPC proposal:
• Eliminates the deficits and creates a surplus by 2021
• Puts America back to work with a “Make it in America” jobs program
• Protects the social safety net
• Ends the wars in Afghanistan and Iraq
• Is FAIR (Fixing America’s Inequality Responsibly)

What the proposal accomplishes:
• Primary budget balance by 2014.
• Budget surplus by 2021.
• Reduces public debt as a share of GDP to 64.4% by 2021, down 16.9 percentage points from a baseline fully adjusted for both the doc fix and the AMT patch.
• Reduces deficits by $5.7 trillion over 2012-21
• Both outlays and revenue equal 22.3% of GDP by 2021

And here’s how they intend to do it… They’d end the wars, enact a public option, end the Bush tax cuts, reintroduce an estate tax, and invest in things like education and infrastructure.


So, why aren’t we hearing about this? Why isn’t every Democrat in the nation talking about it? What aren’t people nailing this up on telephone poles and slipping it under their neighbors’ doors? I think this is where we should draw the battle line. Win or lose, I think this is a fight that’s worth having, and having now. And I’m confident that the American people would get behind it. This is the kind of thing that could draw a million people to the streets of DC. This is the kind of thing that a movement could be created around.

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  1. LAKE
    Posted April 11, 2011 at 11:08 pm | Permalink

    I try not to get too pissed off, because what can I REALLY do? This system doesn’t pay attention to what I think, but I do get pissed.

    Obama is a pussy. I voted for him, and each time he speaks, he seduces me and I believe him, but he never does what he says he’s going to do. He “compromises” the main objectives that are important, and gets nothing in that compromise. He needs to stop the crapping on the poor and middle class, but he won’t stop compromising. This isn’t the change I voted for.

    Why isn’t the compromise–we’ll cut a few bucks on this program or that program, but you need to agree to take an equal amount out of the defense budget, if we’re going to cut.

    The people just aren’t getting the results of the promises that Obama made. The wars have escalated, Guantanamo has not closed, no reform on the Patriot Act (remember that?)…he folds every time.

    This just goes to show that when you receive the most money in the history of the world to support your campaign, you have too many asses to kiss, and once again, the working middle class and poor suffer.

    Lately, this feels like the embryonic stages of a revolution. There. I said it.

  2. Edward
    Posted April 12, 2011 at 8:09 am | Permalink

    Where do our local elected officials stand on this?

    Ask them.

  3. Ez Marsay
    Posted April 12, 2011 at 8:36 am | Permalink

    Interesting piece in the new print Nation about Jim Messina, who apparently is ruthless when it comes to banning all forms of progressive input from both Obama’s current policy, but also the beginnings of his 2012 campaign. It’s growing increasingly clear that not only was the message of much of Obama’s 2008 campaign a form of dishonesty (his campaign managers understood that to run a “standard-issue” campaign would mean no chance at beating Hillary, and so they devised a strategy whereby Obama would appeal to “the bottom”) but that the 2012 campaign is going to make no bones about the fact that, as of now and onwards, Obama is appealing mainly to lobbyists, Wall Street, and the American center and center-right.

    All of which to say: I hope the 80-strong Progressive Caucus can figure out a way to end-run Messina and make something happen. Otherwise, your average Democrat is going to begin—incredibly—to find bits of common cause with very strange bedfellows who feel not only disappointed with, but lied to, by the current administration.

    The heartbreak in all this is that, goddamnit, we’ve got our first ever African-American president, and how wonderful is that? And yet, ultra-frustratingly, he’s wound up being ineffective, pusillanimous, and more interested in being liked by the rich than in advocating for the disenfranchised. Now his own Harvard mentors are signing letters that publicly chastise the cruelty of some of his policies. Even MoveOn has given up on trying to reach him. His sister Maya, who does amazing work in progressive education with non-privileged/low-income populations in Hawaii, isn’t even allowed to speak with him about policy. But she still loves him . . .

  4. Kim
    Posted April 12, 2011 at 8:48 am | Permalink

    But I thought that we already established, thanks to Taters, that there’s no evidence that Obama went to Harvard. And how do we even know that this sister of his is real?

    In all seriousness, this looks like a great plan. It’s hard to believe that, as much as I’ve been hearing about the Ryan plan, this is the first time I’ve heard of this option.

  5. TeacherPatti
    Posted April 12, 2011 at 8:53 am | Permalink

    I agree with Ez on his points, particularly that Obama wants to be liked by the rich. I felt the same way with our former governor–she was too busy worrying about not pissing anyone off and being liked than actually *doing* anything. Kids, if you want to be liked, politics (and teaching) are not for you. I want B to throw down and say “Bring it” to the haters and get shit done. Won’t happen, but I can dream….
    PS: I like the idea of allocating more money to special ed! Maybe I could actually get some of the technology that the kids need.

  6. Meta
    Posted April 12, 2011 at 9:01 am | Permalink

    John Conyers is a member of the caucus. John Dingell is not. The only two members from the Senate are Bernie Sanders and Tom Udall.

  7. Meta
    Posted April 12, 2011 at 9:31 am | Permalink

    Food and Nutrition for Poor Children Cut by $500 million; Pentagon Budget Increased by $5 billion. This is our new budget.

    Hundreds of individual programs are facing reductions, with the biggest cuts running in excess of $1 billion dollars.

    Almost $3 billion for high-speed rail funds are cut, along with roughly $3 billion for highway construction, $6.2 billion in Department of Defense construction projects, and $1 billion from programs that help prevent the spread of sexually transmitted diseases.

    Social safety net programs are not spared. WIC, a program that uses federal money to subsidize the food and nutrition needs of children from low-income families, is cut by more than $500 million.

    Grants to states that help pay for drinking water infrastructure projects are cut by $1 billion.

    Every broad category of government receives a reduction in funding levels, with the exception of two: The Department of Defense and the Department of Veterans Affairs.

    The Pentagon would end up with a boost of about $5 billion above last year’s level. At the same time, the bill would slash $4.2 billion in military earmarks — a type of spending Republicans have vowed to eliminate from the budget.

    The Department of Veterans Affairs’ budget would increase by $600 million over fiscal year 2010, an increase that is accomplished by reducing funds for military construction by about $10 billion while boosting spending on veterans’ health care and benefits.

  8. Mr. X
    Posted April 12, 2011 at 10:32 am | Permalink

    My letter to Dingell.

    Congressman Dingell,

    I don’t believe that you are a member of the Progressive Caucus. I would hope, however, that you will consider supporting the alternative to the Ryan budget that these Democratic colleagues of yours have put forward. I’m sure you’ve seen it, but, if not, you can find details here.,70

    It is called the People’s Budget, and it entails a number of features that I know are close to your heart. It is ambitious. Some would say that it is naively so, as it covers everything from the ending of our wars in Afghanistan and Iraq to the reinstitution of the Estate Tax, and the roll back of the so-called Bush Tax Cuts. Unlike the Ryan budget, it seeks to share the pain equally across the spectrum, and not just shuffle the debt off to the poor and middle class. I would love to know that my Congressman is supportive of such legislation, and, if you were to sign on, I would be proud to campaign for your reelection.

    If you choose not to support this legislation, I would like to know why that’s the case.

  9. jacksmith
    Posted April 12, 2011 at 10:43 am | Permalink


    ( Gov. Peter Shumlin: Real Healthcare reform — )

    ( Health Care Budget Deficit Calculator — )

    ( Briefing: Dean Baker on Boosting the Economy by Saving Healthcare )


    As you all know. Had congress passed a single-payer or government-run robust Public Option CHOICE! available to everyone on day one, our economy and jobs would have taken off like a rocket. And still will. Single-payer would be best. But a government-run robust Public Option CHOICE! that can lead to a single-payer system is the least you can accept. It’s not about competing with for-profit healthcare and for-profit health insurance. It’s about replacing it with Universal Healthcare Assurance. Everyone knows this now.

    The message from the midterm elections is clear. The American people want real healthcare reform. They want that individual mandate requiring them to buy private health insurance abolished. And they want a government-run robust public option CHOICE! available to everyone on day one. And they want it now.

    They want Drug re-importation, and abolishment, or strong restrictions on patents for biologic and prescription drugs. And government controlled and negotiated drug and medical cost. They want back control of their healthcare system from the Medical Industrial Complex. And they want it NOW!


    For profit health insurance is extremely unethical, and morally repugnant. It’s as morally repugnant as slavery was. And few if any decent Americans are going to allow them-self to be compelled to support such an unethical and immoral crime against humanity.

    This is a matter of National and Global security. There can be NO MORE EXCUSES.

    Further, we want that corrupt, undemocratic filibuster abolished. Whats the point of an election if one corrupt member of congress can block the will of the people, and any legislation the majority wants. And do it in secret. Give me a break people.

    Also, unemployment healthcare benefits are critically needed. But they should be provided through the Medicare program at cost, less the 65% government premium subsidy provided now to private for profit health insurance.

    Congress should stop wasting hundreds of millions of dollars of taxpayer money on private for profit health insurance subsidies. Subsidies that cost the taxpayer 10x as much or more than Medicare does. Private for profit health insurance plans cost more. But provide dangerous and poorer quality patient care.



    This is what the American people are shouting at you. Both parties have just enough power now to do what the American people want. GET! IT! DONE! NOW!

    If congress does not abolish the individual mandate. And establish a government-run public option CHOICE! before the end of 2011. EVERY! member of congress up for reelection in 2012 will face strong progressive pro public option, and anti-individual mandate replacement candidates.

    Strong progressive pro “PUBLIC OPTION” CHOICE! and anti-individual mandate volunteer candidates should begin now. And start the process of replacing any and all members of congress that obstruct, or fail to add a government-run robust PUBLIC OPTION CHOICE! before the end of 2011.

    We need two or three very strong progressive volunteer candidates for every member of congress that will be up for reelection in 2012. You should be fully prepared to politically EVISCERATE EVERY INCUMBENT that fails or obstructs “THE PUBLIC OPTION”. And you should be willing to step aside and support the strongest pro “PUBLIC OPTION” candidate if the need arises.

    ASSUME CONGRESS WILL FAIL and SELLOUT again. So start preparing now to CUT THEIR POLITICAL THROATS. You can always step aside if they succeed. But only if they succeed. We didn’t have much time to prepare before these midterm elections. So the American people had to use a political shotgun approach. But by 2012 you will have a scalpel.

    Congress you could have pass a robust government-run public option during your lame duck session. You knew what the American people wanted. You already had several bills on record. And the house had already passed a public option. Departing members could have left with a truly great accomplishment. And the rest of you could have solidified your job before the 2012 elections.

    President Obama, you promised the American people a strong public option available to everyone. And the American people overwhelmingly supported you for it. Maybe it just wasn’t possible before. But it is now.

    Knock heads. Threaten people. Or do whatever you have to. We will support you. But get us that robust public option CHOICE! available to everyone on day one before the end of 2011. Or We The People Of The United States will make the midterm election look like a cake walk in 2012. And it will include you.

    We still have a healthcare crisis in America. With hundreds of thousands dieing needlessly every year in America. And a for profit medical industrial complex that threatens the security and health of the entire world. They have already attacked the world with H1N1 killing thousands, and injuring millions. And more attacks are planned for profit, and to feed their greed.

    Spread the word people.

    Progressives, prepare the American peoples scalpels. It’s time to remove some politically diseased tissues.

    God Bless You my fellow human beings. I’m proud to be one of you. You did good.

    See you on the battle field.


    jacksmith – WorkingClass :-)

  10. Ez
    Posted April 12, 2011 at 12:43 pm | Permalink

    I hope Obama’s got The Roots (“Sacrifice”) on his iPod.

    I tell you one lesson I learned:
    If you want to be something in life
    You ain’t gonna get it unless
    You give a little bit of sacrifice
    Ooohh, sometimes before you smile you got to cry
    You need a heart that’s filled with music
    If you use it you can fly

  11. Stephen
    Posted April 12, 2011 at 2:11 pm | Permalink

    More than half of the $38 billion in spending cuts that lawmakers agreed to last week would hit education, labor and health programs.

    Revolution, anyone?

  12. K2
    Posted April 12, 2011 at 3:56 pm | Permalink

    I’ve been searching online for more information, but I haven’t found much of anything. I’ve written to Dingell, Levin and Stabenow, asking that they sign on to cosponsor the bill, but I haven’t received any response. My next step is to start writing to newspapers, asking why they aren’t covering the People’s Budget.

  13. K2
    Posted April 12, 2011 at 4:01 pm | Permalink

    I did find a response by a guy named James Pethokoukis though.

    “The Congressional Progressive Caucus has finally released its response to Rep. Paul Ryan’s Path to Prosperity. ”The People’s Budget” is almost like a parody of a liberal Democratic plan. It proposes raising taxes by $4 trillion over ten years and cutting spending (mostly defense) by $900 billion. (Ryan would cut spending by $6 trillion.) It would take tax revenue as a share of GDP to 22.3 percent vs. a previous all-time high of 20.9 percent in World War Two. Even worse, the plan only goes out a decade since its tax hikes still wouldn’t balance the budget long-term because it ignores healthcare reform.”

  14. Mike Shecket
    Posted April 12, 2011 at 4:38 pm | Permalink

    If you want to get this done, you’ve got to win the argument at the ballot box. And do to that, you’d have to get people who don’t turn out to vote (especially in midterm elections) to turn out, and you’d have to win back older, middle-class whites (at least for one more generation). So how would you do that? I’ve sometimes imagined that it would take some kind of grand political bargain.

    This isn’t necessarily what I want to happen or what I think should happen, but it’s interesting as a hypothetical: what if the Left in American politics basically punted on abortion? You do a 180 on the Democratic Party platform, start running a ton of pro-life candidates and thus try to win back, for example, Catholics (including those who make up the ever-growing Hispanic vote) who would ordinarily be fiscal liberals but for whom abortion overrides everything else.

    The Left is clearly losing the fiscal argument so long as tax increases on anyone are anathema and spending cuts on anything, except defense and entitlements, are acceptable. How do you turn it around? Better arguments, more people, more money for ads.

  15. TaterSalad
    Posted April 12, 2011 at 5:07 pm | Permalink

    When we thought we have heard it all over the last two years with this socialist Obama regime a new a quite unique way to spend our money that we are “borrowing from China” is to fix Mexican trucks at our expense. How many more days are there left in this Presidency?

  16. Posted April 12, 2011 at 6:42 pm | Permalink

    Honestly, I wish Obama really were a socialist.

  17. dp in ypsi
    Posted April 12, 2011 at 9:07 pm | Permalink


  18. God Bless America
    Posted April 12, 2011 at 9:33 pm | Permalink

    Sure, this might make “America” solvent for our children and children’s children, but will it make AMERICA great?

    I do not wish to live in an America that is anything less than AMERICA the beautiful. AMERICA the great.

    I do not wish my future grandchildren to live in the United Fake of America, but the United Great AMERICA.

    AMERICA will not be great, will never reach its manifest destiny, until every AMERICAN is paying NO taxes, anywhere, anytime to anyone!

  19. Meta
    Posted April 13, 2011 at 1:26 pm | Permalink

    Breaking News Alert:
    Obama unveils plan to reduce borrowing by $4 trillion over the next 12 years
    April 13, 2011 1:53:06 PM

    President Obama unveiled a framework Wednesday to reduce borrowing over the next 12 years by $4 trillion — a goal that falls short of targets set by his deficit commission and House Republicans — and called for a new congressional commission to help develop a plan to get there.

    In his most ambitious effort to claim the mantle of deficit cutter, Obama proposed sharp new cuts to domestic and military spending, and an overhaul of the tax code that would raise fresh revenue. But he steered clear of fundamental changes to Medicare, Medicaid and Social Security — the primary drivers of future spending.

  20. Rich Priors
    Posted April 15, 2011 at 10:46 pm | Permalink


    If Democrats punted on abortion, it’d be a game changer. It’d also be a game changer if they punted on gay marriage, global warming, taxes, gun laws, education, regulation, unionization, environmental degredation, immigration, new sensations…

    The same would be true if Republican’s punted on any of the above.

    The problem (IMHO), is that we become entrenched. We pick sides based on our hierarchy of values and fall in line. If global warming is my core issue, I vote Democrat and slowly start to defend the party platform so that my core issue isn’t weakened on a weak platform.

    It’s like buying cable. I may only want ESPN and Comedy Central, but I’ve got to invest in the whole package to get those two channels. Somebody else wants MTV and the Cartoon Network. We both get a little of what we want and whole lot of what we don’t. We have less options in voting than we do in picking cable providers. Guess who wins.

    We need more parties.
    A free market. I love, in concept, what the Tea Party is doing. Can you imagine if the Green Party (for one) had done the same? Instead, Nader voters were ridiculed, blamed and ushered back in line.

  21. TaterSalad
    Posted April 16, 2011 at 4:42 pm | Permalink

    Seems Jeff and George are real close buddies, just like Obama and Ayers!

    Here is how the communist, George Soros, Barack Obama’s “Money Man”, bankrolls the far left wing, progressive network:

    How George Soros bank-rolls the left wing moonbats:,_The_Coming_Global_Currency_And_The_New_World_Order.html

    Where does it end? George Soros wants to bring America to its knees and he is now funneling big money to:

  22. K Mertz
    Posted April 24, 2011 at 5:27 am | Permalink

    I’ve yet to hear about this in the corporate media. And none of the elected officials that I wrote to have responded as to why they aren’t supporting this legislation.

  23. Kim
    Posted April 25, 2011 at 11:25 pm | Permalink

    It took a while, but Ezra Klein wrote about it in today’s Washington Post.

    Here’s how Michael Pollan might describe the budget proposal released by the House Progressive Caucus: Uses taxes. Mostly on the rich. Perhaps too many.

    The legislation would let most of the Bush tax cuts expire — a major difference from Obama’s budget, which would extend most of the Bush tax cuts — and add a few new brackets for millionaires and multimillionaires, not to mention a stronger and more progressive estate tax. Capital gains and dividend income would be taxed as normal income, corporate taxes would be raised, and a financial transaction tax would be passed. The payroll cap would be raised on the employee side and abolished on the employer side, taking care of most of Social Security’s shortfall, and the Defense Department would see $1.8 trillion in cuts over 10 years. There’d be a public option added to the health-care system and Medicare would get more power to negotiate drug prices. There’s room for $1.4 trillion in new investments, and according to the HPC’s numbers, their budget does more deficit reduction over the next 10 years than either Obama or Ryan’s budget. Paul Krugman calls it “the only major budget proposal out there offering a plausible path to balancing the budget.”

    So does it all add up? Sort of, said the experts I consulted. “In the same way that Ryan’s plan is useful for showing how you could do this/what one would have to do on if you do it all on the spending side,” says William Gale, co-director of the Tax Policy Center, “the House Progressive Budget shows how one might do this/what one would have to do to do almost all of it on the tax side of the ledger.” Gale thought their proposal probably went a bit far in new upper-income taxes, and treating capital gains as normal income might erect a barrier to investment. It would have been wiser, he thought, to be even a bit bolder in terms of new taxes and propose either an energy tax or a value-added tax. “Still,” he said, “I think it would be interesting to get this plan out in front of the American people and see how they react to it versus Ryan.”

    Len Burman, who previously led the Treasury’s tax analysis division and is now at Syracuse University and the Urban Institute, had a broadly similar, though slightly more negative, take. “Glad to see more progressivity, but there’s little real tax reform and really, really high tax rates on high-income people,” he says. “I doubt that many capital gains would be realized at a 49% tax rate (or even a 45% one).” He worried that the various provisions would lead to a large increase in tax evasion strategies, including more self-employment, gifts, an increase in C corporations and a lot more offshore financial dealings. He thought that once you added all that in — and particularly once you considered the way the various taxes would stack and interact — the plan would raise less money than the House Progressive Caucus assumed. “I wish they’d thought more about simplification and reforming the tax expenditures that they retain,” he said. “The plan could have been made more progressive and raised more revenue without raising top tax rates.” He suggested looking at the Bipartisan Policy Center’s plan for a model of how to do a lot more tax reform while raising revenues.

    Robert Frank, an economist at Cornell University, is one of the more innovative tax thinkers I know. In particular, I’ve always been partial to his proposal for a progressive consumption tax (pdf). So I ran the plan by him, as well. “The progressive budget proposal is of course an enormous improvement over the bizarre Ryan budget,” he said, “which for all its chest thumping about facing up to the hard choices, does nothing — absolutely nothing — to reduce long-run deficits.” But like Gale and Burman, Frank wanted to see more simplification and reform. In particular, he wanted more attention given to what we tax with an eye toward two-fers: raising more money off of things we want less of. “When we enter congested roadways, or buy heavy vehicles, or drink to excess, or emit CO2 into the air, we impose costs on others,” he says. “Taxing such activities kills two birds with one stone: It generates much needed revenue, and it curtails activities that cause more harm than good. Because these taxes make the economic pie bigger, it makes no sense to object that we can’t afford them.” He recommended this piece (pdf) for more on those ideas.

    So even if you were going to rely heavily on taxes, the particular set of taxes recommended by the House Progressive Caucus probably isn’t the set you’d rely on. But Burman, Gale and Frank all thought the proposal compared very favorably to Ryan’s budget. For one thing, its savings ramp up more quickly. Ryan puts his biggest reforms off until 2022. The House Progressive Budget begins almost immediately. For another, it tries to balance the budget in a largely progressive fashion — a worthwhile goal given that the current deficits are largely the product of the financial crisis and a set of tax cuts that were embarrassingly tilted toward upper-income Americans. The House Progressive Budget is also willing to make some deep changes in the Defense Department and block off some new money for much-needed investments. Gale noted that if you think of Ryan’s budget as one end of the spectrum and this budget as the other, Obama’s proposal is probably closer to Ryan’s than to the House Progressive Caucus’s.

    I’d add that over the long-term, this budget isn’t particularly strong on health care. A public option would be helpful, and so too would letting Medicare bargain down the price of pharmaceuticals. But I’d have liked to see much more radical ideas for controlling health-care costs. As it is, this budget basically just includes the thing progressives wanted and didn’t get in the Medicare Prescription Drug Benefit and the thing progressives wanted and didn’t get in the Affordable Care Act.

    But overall, this is a smart contribution to the negotiations, in part because it’s organized very intelligently. It’s a menu of separate — and separable — options for reducing the budget deficit in a progressive fashion, rather than one or two massive ideological efforts to remake the safety net. If Ryan had been writing the House Progressive Budget, it would’ve proposed single-payer health care and a value-added tax and called it a day. The House Progressive Caucus didn’t do that — and they were smart not to.

    Instead, they designed their budget to make it easy for the negotiators to lift some of their proposals into a final deal. It’d be simple to grab the new millionaire’s brackets out of this budget, or snatch some the defense savings and the public option, without embracing everything else. That also makes it easy for progressives to choose a few of these items and really organize behind them. The measure of this budget’s success won’t be in whether it passes, but whether a few of its specific suggestions are able to shoulder their way into the conversation. To invert the old aphorism, the budget might not fully hang together, but its pieces could certainly survive separately.

  24. Kim
    Posted April 29, 2011 at 4:50 pm | Permalink

    The Daily Beast has something about it today.

    As members of Congress talk to constituents during recess, they’re getting an earful. Just as angry crowds of constituents greeted Democratic members during the health-care reform debate, angry voters are coming out to tell their representatives that they’re mad about Paul Ryan’s proposed changes to Medicare and Medicaid. They want to know why corporate giants like GE aren’t paying any taxes. And they want the rich to shoulder more of the tax burden. Even President Obama’s plan is too lenient, some say.

    So what if there were a plan that proposed keeping entitlements intact, closed corporate tax loopholes, and jacked up taxes on the rich—all while producing a budget surplus within a decade? As it turns out, there is—and has been for several weeks. Called “The People’s Budget,” it was released by the Congressional Progressive Caucus in early April. But if this is the first you’ve heard of it, don’t feel too bad. The plan has flown almost totally under the radar—the odd Paul Krugman column and Economist blog post excepted. But with anger about cuts starting to crystallize, that might change.

    “It’s gaining some traction—more people are writing about it, more people are aware,” says superstar economist Jeffrey Sachs, who was an early advocate of the plan. “It started being overshadowed by Ryan and the president’s plan. I find neither of those adequate, and Ryan’s plan is now absolutely being seen for what it is: egregiously unfair and absolutely unacceptable.”

    But why has it taken so long? One factor is pure timing: Ryan grabbed the spotlight by striking first. Obama, with the bully pulpit of the White House, had no trouble getting attention. But the CPC was late to the party. And numbers are a factor too. Whereas Ryan is the budget chief for the House majority, the CPC is a minority within a minority—the outnumbered left wing of the outnumbered Democrats.

    Perhaps most important, though, is the question of “realism.” “We’re not getting attention because the attitude is, ‘It’s a great effort, but it will never happen,’” says Rep. Raul Grijalva, an Arizona Democrat and co-chair of the CPC. But pointing at recent polls that show widespread opposition to entitlement cuts and support for higher taxes on the rich, he insists that’s wrong: “This is more than just a message. We put a budget together that reflects desires of the American people, based not just on conversations with constituents but on polling. People haven’t been given the option.”

    “Why is cutting Medicare, Medicaid, and Social Security courageous, but raising taxes is not?”

    So what does the plan do? Unlike Ryan’s plan—or even Obama’s—the People’s Budget focuses on raising revenues, rather than cutting spending: of the $5.6 trillion it says it would cut from the deficit, only $1.7 trillion would come from spending cuts, with $3.9 trillion coming from higher government revenues. The plan forecasts a modest surplus by 2021. It gets there by taxing the rich aggressively, creating higher income tax brackets and rescinding the extension of the Bush tax cuts passed in December. It also imposes a strict estate tax. Unlike President Obama’s plan, which lowers corporate tax rates while closing loopholes, the CPC would leave the rate unchanged and slash some subsidies.

    Elsewhere, it would create a public option for health care; allow the government to negotiate prescription prices with manufacturers; spend money on job creation, infrastructure, and housing; save by ending American involvement abroad; and cut the defense budget.

    Sounds pie in the sky, right? The plans backers admit that it’s, um, unlikely to be enacted as is. They point out, however, that Ryan’s plan is no more realistic: polls suggest widespread disapproval, although Senate Majority Leader Harry Reid has announced he’ll hold a vote on the budget. But that vote is a political ploy, and the president would veto it anyway. Grijalva says the point is to establish a starting place for negotiations.

    “We felt there was a frustrated constituency out there who felt we were offering an alternative. The Democrats are going into negotiations with Boehner with one hand tied behind our back,” he says. “We’ve played around the edges on many policy decisions in Congress, tried to straddle the middle, and the results are not good.”

    And in fact, the left is rejoicing. “It’s an extremely practical and—in terms of American political opinion—a very mainstream budget,” says Joan McCarter, senior policy editor for Daily Kos, the liberal standard-bearing blog. “What the Ryan budget has done is draw the Overton Window so far to the right that we are going to end up with a very center-right budget,” she says, referring to the idea that a highly partisan proposal can shift the political center toward it. The People’s Budget could start to tug it back, she says.

    It’s also far more courageous than Ryan’s Path to Prosperity, she says. That plan has been called bold because it proposes entitlement cuts, but that’s been Republican dogma for years. “Why is cutting Medicare, Medicaid, and Social Security courageous, but raising taxes is not?” she asks. “In this environment, raising taxes is pretty courageous.”

    Politics aside, there’s the matter of how realistic the People’s Budget is as policy. While liberal economists like Krugman, Sachs, and Dean Baker have lavished praise on it, it’s not a flawless document, says Howard Gleckman, a senior fellow at the nonpartisan Tax Policy Center.

    “The math is not unreasonable, but the proposals themselves raise a lot of policy questions,” Gleckman says. “A top tax rate of almost 50 percent—people won’t pay it. People will find ways to game the system.” The wealthiest, those most affected by the tax hikes, are more able to juggle funds and compensation to put off or avoid taxes, he notes. The difference between corporate tax rates and personal tax rates will also entice some businesses to legally restructure themselves to pay lower taxes. Both factors mean the revenue projections are optimistic.

    And Gleckman found some of the plan’s choices confusing. Although the CPC budget caps itemized deductions—a tax benefit that disproportionately benefits the wealthy, who are far more likely to itemize—it does little to close other “tax expenditures”—really, loopholes that cut into the government’s take.

    “I accept that as legitimate criticism,” Grijalva concedes. “Cap and trade’s not in there as a revenue producer, either. I’m not saying our budget isn’t a work in progress, but the fact that more people are reacting to specifics indicates that the work we were putting into it was good.”

    But getting people talking is just a start. After speaking to a reporter about the CPC plan, Grijalva hung up and prepared to go to his eighth constituent meeting of the congressional recess—trying to get the word out to a few more voters, trying to close the publicity gap between it and its rivals, a few Americans at a time. He’s got a lot of distance to close.;_ylt=AgX.nqLRB37cB0vNb4VZzh.s0NUE;_ylu=X3oDMTVqdW92MTNlBGFzc2V0A2RhaWx5YmVhc3QvMjAxMTA0MjgvMTM3NDNfbGliZXJhbHNzdGVhbHRoYnVkZ2V0c29sdXRpb25yYWlzZXN0YXhlc29ucmljaHNhdmVzc29jaWFsc2VjdXJpdHkEY2NvZGUDbW9zdHBvcHVsYXIEY3BvcwM3BHBvcwM0BHB0A2hvbWVfY29rZQRzZWMDeW5faGVhZGxpbmVfbGlzdARzbGsDdGhlbGVmdHNzdGVh

  25. Erp
    Posted July 18, 2011 at 8:55 pm | Permalink

    Why isn’t this being discussed in the press? Why does all the attention seem to be on the Tea Party proposal currently on the table, as though that’s the only option?

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