Sense and Nonsense: The Budget Battle In The House

Robert Borosage

This week, the House of Representatives will vote on the Republican budget presented by the Republican Budget Committee chair Paul Ryan, as well as on the Congressional Progressive Caucus “Better Off Budget.”

Republicans are lined up to vote for the Ryan budget, with the exception of a handful who think it is not extreme enough. The CPC and outside allies will have to push hard to line up 100 Democrats to vote for the Better Off Budget. The Ryan budget has received extensive press coverage; the CPC budget is barely mentioned.

The irony is clear. The Republican Ryan budget is an extremist, dishonest and nonsensical document, laying out a path that Republicans have no stomach to pursue. The CPC budget is both candid and sensible, laying out a prudent course that the country would be wise to follow. The Republican Ryan budget is stuffed with proposals that the vast majority of Americans oppose. The CPC budget includes reforms that are broadly popular. It is a measure of how dysfunctional our politics are that the Republican Ryan budget is likely to pass, and the CPC budget must push to get even a majority of Democrats to support it.

The two budgets make starkly different assumptions about a broad range of policy priorities. As such, they represent dueling world views, one largely embracing the policies of the past, the other offering a way forward.

 The Path to Jobs: Austerity or Investment? Wealth or Work?

The Republican-Ryan budget assumes that America’s biggest problems are deficits and debt – “America is broke,” House Speaker John Boehner repeats. It assumes that the austere budgets of the last years have not squeezed enough, and that if the U.S. cuts spending deeply, balances the budget in 10 years, it will inspire the confidence companies need to start hiring workers again.

The CPC budget assumes that austerity has sapped the recovery. In contrast with other recoveries, deficits have been plummeting faster than any time since the demobilization after World War II. That has reduced demand, cost jobs and slowed growth. With mass unemployment, companies lack not confidence, but customers.

This is why the Economic Policy Institute estimates that the Republican-Ryan budget would cost over one million jobs in its first year and as many as 3.3 million in its second, while the CPC budget would generate an estimated 8.8 million jobs by 2017, putting America back on the road to full employment.

The Republican-Ryan budget focuses on insuring that the rich and the corporations – the “job creators” – are rewarded. It would cut the top tax rates, and eliminate the alternative minimum tax for corporations and individuals. It tells us which rates it will reduce but not which loopholes it will close to make up for the revenue lost. But it keeps the biggest loophole – the lower tax rate for income from wealth – dividends and capital gains – as opposed to income from work. And it expands the glaring overseas tax havens for multinationals, moving towards a territorial system that will make the entire world a tax dodge.

Citizens for Tax Justice reports that even if Republicans closed every loophole used by millionaires, they would still enjoy a tax cut of about $200,000 a year. To sustain the same revenue, as they promise, taxes on middle and low-income workers will inevitably have to rise.

The CPC budget assumes that full employment should be the first priority of any budget plan. It calls for a dramatic expansion of investment in the next three years to put people to work and get the economy moving, including funding to rehire teachers, extend unemployment insurance, rebuild our decrepit and dangerous infrastructure, and create jobs corps to hire the young. It raises taxes to pay for these investments, but front-loads the spending to boost the economy, and then gradually reduces deficits to levels below what is needed to keep the debt declining as a percentage of the economy. The CPC assumes that if people are working, companies will prosper and the rich will do just fine.

Public Waste or Public Squalor

The Republican-Ryan budget believes government is lavishly overfunded. It proposes to increase military spending, but to cut domestic discretionary spending by more than one-third compared to inflation-adjusted levels over the next decade. It would reduce domestic spending to half the level it was under Ronald Reagan, as a percentage of gross domestic product. President Obama’s budget would reduce domestic spending to levels not seen since Eisenhower. The CPC budget is the only plausible alternative because it would essentially sustain current spending levels over the next 10 years.

The reality is that while there is waste in government – particularly in the Pentagon, the largest bureaucracy and largest source of waste, fraud and abuse in government – we suffer far more from public squalor than public surfeit.

We are not providing even the basics in education, from infant nutrition to universal pre-K, to smaller classes in the early years, to after-school programs and affordable college. The Republican Ryan budget would slash funding for education, cut Head Start, and freeze Pell grants, making college less accessible for students from working and poor families. The president’s budget makes funds available for pre-school. The CPC budget is able to add funding for public schools.

Our decrepit infrastructure is dangerous to our health and to our economic competitiveness. Falling bridges, bursting 100-year-old pipes, aging sewer and water systems, inadequate mass transit, broadband and energy grids in dire need of modernization – the list can continue. The Republican-Ryan budget adds nothing to infrastructure. The president’s budget calls for an important $300 billion rebuilding effort in three years. The CPC budget adds over $800 billion over 10 years, a start at filling the gap.

Health Care: Privilege or Right

Not surprisingly, the Republican-Ryan budget wants a privatized system of health care, controlled by private insurance companies with health care essentially rationed by price. You get what you can afford. The budget would repeal the Affordable Care Act, turn Medicare into a voucher of declining value by 2024 and savage Medicaid, transforming it to a block grant and cutting one of four dollars out of it by the end of the decade. This would increase the hold of private insurance on our health care, and deprive 40 million working and poor Americans of coverage.

The president’s budget protects Obamacare, including expanded Medicaid, while continuing to seek savings from Medicare Advantage and other programs.

With soaring health care costs the overwhelming source of America’s long-term debt concerns, the CPC budget pushes to make health care a right, and to begin liberating it from Big Pharma and the private insurance industry. It calls for allowing Medicare to negotiate bulk discounts on prescription drugs, saving $157 billion over 10 years. It also creates a public option in Obamacare, and gives states waivers to experiment with a single-payer system.

 Real Security: Guns or Green

For the Republican-Ryan budget, America should continue to police the world, although on the cheap. The Republican budget adds nearly $500 billion to projected military spending over the next decade. This would be enough to pay for the military to police the world, but not cover the wars and conflicts that result. The Ryan budget essentially denies the threat posed by global warming, calling for the U.S. to double down on oil and gas as a source of energy and jobs in the next years. The president’s budget marginally bumps up military spending from current levels, and reasserts his “all of the above” energy policy.

For the CPC, America’s real security needs begin with getting our economy strong once more at home, and focus on the real and present danger of catastrophic change. The CPC budget repeals subsidies to Big Oil and puts a tax on carbon, and uses that money to help capture a lead in the green industrial revolution that is already sweeping the world.

 The Least of These: Abandon or Invest

The Republican-Ryan budget argues that our threadbare safety net is actually a hammock, seducing the impoverished into idleness and dependency. It would set them free by slashing spending on programs for the poor – food aid, child nutrition, Head start, public housing, poor schools, Pell grants, work-study programs, the earned income tax credit would all be cut deeply. The Republican-Ryan budget reveals how much would be saved, but not what would be cut to create the savings. The Center on Budget and Policy Priorities estimates that 69 percent of the Republican-Ryan cuts come from programs for the poor.  

The president’s budget seeks to protect the poor and aged, but is constrained by the commitment to reduce domestic spending dramatically over the decade.

The CPC budget argues that women and people of color have suffered the most from the Great Recession, and their children are our future, not ballast, and must be lifted up, not abandoned. It calls for modest increases in education and income security accounts, including food aid, and more funds for poor schools and college aid. It expands the Earned Income Tax Credit to add low-wage workers, and more.

 Cowardice or Candor

The Republican-Ryan budget is a testament to cowardice. It seeks to avoid admitting what it espouses. It reports the taxes it would cut, but not whose taxes would be raised to make up the difference. It reports the savings it would pocket, but not what programs would be cut to produce them. It promises to “preserve Medicare,” not admitting that it will leave millions without health care. It promises growth and jobs through austerity, despite all evidence to the contrary. It savages help for working and poor people while continuing subsidies for entrenched interests and tax breaks for the rich and corporations. It is an extremist ideological statement that, in fact, could never be implemented. It is likely to pass the House.

The CPC budget is a candid and clear statement of sensible priorities. It is relatively cautious in its investment agenda, constrained by the desire to insure that the programs can be paid for and the national debt reduced over time in relation to the economy. It lays out how it will pay for its priorities, calling for fair taxes on the rich, multinationals and banks, imposing a tax on carbon while cutting subsidies to Big Oil and Big Agra and more. It will have to push to win 100 votes in the Democratic caucus.

This is simply perverse. Call your legislator, using this link. Demand that he or she support the Progressive Caucus “Better Off Budget” and vote against the Republican-Ryan budget. Let them know that their voters know the difference between a road to ruin and a road that offers a way out.

Comments