Don’t burden the middle class
Today, we have a president who is standing firmly for what the majority of people support in terms of reducing our national deficit.
In recent polls, more than 70 percent of people believed that continued deficit reduction should include new revenue, Obama’s exact position. It is generally recognized that combinations of cuts and revenues are the fairest way to reduce our deficit. It is hardly fair to put all of the burden on the middle class or disadvantaged by cutting social programs they rely on, all while shielding the wealthiest and most well-connected from any additional contribution. Obama has stood by the fair approach all along.
But let’s start from the beginning. Here, the facts stand clearly. We have government revenues around 27 percent of gross domestic product, with expenditures around 38 percent of GDP. Essentially, we are getting more out of the government; government is putting more money into the economy than it is taking out.
This reality transcends simplistic claims like “spending is the problem,” a frequent Republican talking point. It can be seen as a problem of too little revenue, too much spending or, most fairly, both insufficient revenues and over-spending. Certainly we have problems of waste within government, and we also have problems with a tax code that gives undue benefits to certain interest groups and corporations.
Thus, what we need is what most of us support, an all-of-the-above approach that involves both reducing excessive and wasteful spending and raising revenues from those who can most afford to pay. In January, we had the debate over the Bush tax cuts, and a compromise was reached between Obama and the Republicans, dictating that the tax rates on income above $450,000 go up from 35 percent to 39 percent on regular income and from around 15 percent to 18 percent on capital gains.
This was projected to raise about $600 billion in revenue over the next decade. The sequester, prominent recently, was a deal agreed on to force an agreement after Republicans walked out of the “Grand Bargain” talks back in 2011, in which Obama had offered them a much better deal than they would later get on taxes. That “Grand Bargain” was to have generated $4 trillion in deficit reduction and put the U.S. on a path to stabilize its deficit.
Instead, what we got was the $800 billion in cuts of the sequester, which went through Friday, having failed to force any agreement. Now, in about a month, we face a possible government shutdown if agreements to continue funding cannot be reached.
Clearly, the ideal would be a “Grand Bargain” balancing both spending cuts and revenue increases and working to stabilize the greatest future drivers of spending, Social Security and Medicare. In this situation, both sides will have to make sacrifices. Democrats would have to accept reforms to entitlement programs and other spending reductions, while Republicans would have to accept additional revenue from closing loopholes.
This is the kind of deal that the American people demand and should keep demanding. But we also should be clear that there is only one side that has walked away from the table. As much as Republicans would like to insist that “the revenue debate is closed” with the agreement on the Bush tax cuts, that “spending is the (only) problem” or that the president and Democrats “haven’t proposed a plan” for deficit reduction, they are responsible for continued crises by utterly refusing any new revenue.
It is clear that the president and Democrats had and have a credible and balanced plan for averting the sequester and reducing the deficit to sustainable levels. These are plain to see on the White House website and more than generous, given that Democrats won the 2012 election.
As we have seen, it is simplistic to view the problem as only spending, and furthermore a mere $600 billion in revenue with the rest in cuts, as Republicans would propose, is hardly a 50-50 approach; it isn’t even an 80-20 approach.
So we have one party consumed with appeasing its radical base on the right, opposing any new revenue, and the other working for a “middle way,” which agrees with fairness and with the vast majority of Americans. The choice is clear.