A Debt-Ceiling Deal 1 In Tax Hikes For Wealthy For Every 1 In Cuts

Robert Borosage

On Monday, Sen. Bernie Sanders committed common sense on the floor of the U.S. Senate. It’s amazing that he wasn’t cited for an ethics violation.

Sanders called on the president to leave the Beltway, go across the country and talk sense to the American people about the cruel obscenities of the Republican position on lifting the debt ceiling. Threatening to blow up the economy by forcing the U.S. to default on its debts if they don’t get their way, Republicans are demanding over $2 trillion in spending cuts over the next 10 years with no, nada, zero contribution from increased taxes on the wealthy, Wall Street, or the big corporations.

TAKE ACTION

Sen. Bernie Sanders has drawn a firm line in the sand for the President and the congressional leaders negotiating a deficit reduction package to go with an increase in the debt limit. It’s simple: Shared Sacrifice. For every dollar you cut in investments for the public, a dollar must be raised from ending tax breaks for the wealthy. Tell Congress: No Deal on Cuts Without Taxing the Rich.

Sanders lays out today’s reality: corporations and the wealthy are making out like bandits, the middle class is getting crushed and poverty is spreading. Yet Republicans are insisting that the corporations and wealthy be exempt from any sacrifice, and instead all deficit reductions come from slashing programs for the elderly, the sick, the poor, and the young. To date, their leadership won’t even agree to mandate cuts in the Defense Department despite the fact that its budget has more than doubled since President Bush came into officenot counting the money spent on the wars in Iraq, Afghanistan and Libya.

This is, as Sanders says, unconscionable. He calls instead for the common sense standard of shared sacrifice:

Mr. President, please listen to the overwhelming majority of the American people who believe that deficit reduction must be about shared sacrifice. The wealthiest Americans and the most profitable corporations in this country must pay their fair share. At least 50 percent of any deficit reduction package must come from revenue raised by ending tax breaks for the wealthy and eliminating tax loopholes that benefit large, profitable corporations and Wall Street financial institutions. A sensible deficit reduction package must also include significant cuts to unnecessary and wasteful Pentagon spending.

Every Democrat in the Congress should join Sanders in this common sense proposition. And every concerned citizen should respond to Sanders’ plea. Go to Ourfuture.org/SharedSacrifice and demand that your member of Congress reject any debt limit deal without a dollar raised in taxes on the wealthy for every dollar cut. (Also, go to Senders’ web site and send the president a letter urging him not to surrender to the Republican bullying.)

In fact, a one-to-one ratio of spending cuts to top end tax hikes is already a compromise. As a percentage of the economy, revenues are at the lowest levels since the 1950s while tax avoidance by corporations and the rich is at perverse levels. The wealthiest 400 Americans have as much wealth as 150 million Americans. And they pay a lower effective tax rate than the chauffeurs who drive them to work or the teachers who instruct their kids or the cops who patrol their streets. Given that the Bush tax cuts and the wars in Iraq and Afghanistan account for nearly half of the deficits projected for the next 10 years, with the costs of the economic collapse caused by Wall Street’s excesses accounting for most of the rest, a sensible policy would have top-end tax hikes and taxes on Wall Street gaming bear the bulk of deficit reduction.

Moreover, the rich and the big corporations have recovered nicely from the Great Recession, but they aren’t generating jobs in the U.S.. They are sitting on trillions in cash; or worse, investing abroad and eliminating jobs here at home. Businesses aren’t short of cash; they are short of customers. Cutting government spending and laying off contractors and federal employees will cost far more jobs than giving the money to the wealthy or corporations will create.

Of course, as House Majority Leader Eric "if you don’t do it my way, I won’t play anymore" Cantor demonstrated by walking out of the deficit negotiations, shared sacrifice is anathema to Republicans. Whether from the corruption of campaign donations or the callousness of ideology, they march in virtual lockstep in defending tax breaks for the rich and corporations and demanding spending cuts from the vulnerable.

But the debt limit must be raised. It is unimaginable that even the Tea Party-cowed House Republicans would be so irresponsible as to force the U.S. into default if they don’t get their way.

So I suggest Democrats make a generous offer. Accept the deficit numbers projected by the budget passed with the unanimous support of House Republicans and supported by all but a handful of Senate Republicans. Since the two sides can’t agree on what mix of taxes and spending should be involved in reaching those deficit figures, leave that for appropriators and the political process. Let the American people decide if they want to elect more legislators committed to gutting Medicare or more committed to taxing millionaires.

We can’t let the deficit spin out of control, so Democrats should compromise completely and embrace the Republican deficit limits for the next 10 years. They voted for adding about $8 trillion to the nation’s debt in the 10 years from 2012 to 2022. Democrats should be magnanimous and concede. Accept what Republicans voted for and lift the debt ceiling by that amount, with strict enforcement procedures. (The dirty little secret here, of course, is that the House plan, according to CBO estimates, actually adds to projected deficits in the first 10 years. Its drastic cuts in Medicaid and domestic spending are countered virtually dollar for dollar by more tax breaks for the wealthy and the corporations. A more generous estimate by the Center for Budget and Policy Priorities suggests the House plan would cut less than $400 billion over 10 years from projected deficits.)

In return for this total embrace of the Republican deficit goals, Democrats should ask for one small reciprocal concession: that over the next year, a major effort be made—through extending the payroll tax cuts, aid to forestall the layoffs of teachers and police, a jobs corps for returning veterans, investment in rebuilding our decrepit infrastructure and in new energy—to put people back to work, while keeping to the deficit goals for the decade.

That’s the deal. Democrats concede the deficit constraints that Republicans supported unanimously for 10 years, and raise the debt ceiling only by that amount. Republicans concede to a package of spending and tax cuts over the next year to put Americans back to work and get the economy going. And we let the voters decide who they trust with deciding how to meet those limits over the next years.

Rep. Paul Ryan, the media darling who was author of the House budget plan, once appeared to support this course. He called his plan "not a budget, but a cause." When asked if he thought his proposals might be enacted before the election, he replied: "At the end of the day we might just have to have a debate or a decision in this country about two futures. In a later speech, he argued: "If we don’t get agreements in the intervening time because of politics or whatever, at least in 2012 they’ll have a real choice."

But to get there, Democrats have to rouse themselves from their lethargy, and stand up as Sanders did to make it clear, publicly and loudly, that they are not prepared to go along with a debt-ceiling deal that is all spending cuts, or three-to-one spending cuts. That would rob voters of the "real choice" they deserve. It would allow Republicans to claim bipartisan support for cuts in Medicare, Medicaid, education and everything from food stamps to college Pell grants, while sustaining tax breaks for the wealthiest and tax havens and subsidies for the corporations.

So join Sanders’ cause. Go to OurFuture.org/SharedSacrifice and tell your member of Congress to insist on shared sacrifice. One dollar of tax breaks for the wealthy for one dollar of spending cuts. Even-steven. Real shared sacrifice. Let’s get a truly fair deal.

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