Right-wing deficit proposals are job killers

Neither the Republican's nor the deficit commission's respective budget plans do enough to create jobs or promote economic recovery said AFL-CIO President Rich Trumka this week. He called for economic plans that create jobs first, then tackle deficits:

Both the Domenici-Rivlin [Republican Party] plan released today [Nov. 18] and the Simpson-Bowles plan released last week would threaten the economic recovery and destroy American jobs by calling for job-killing fiscal austerity before our jobs deficit is closed

He noted the irony of both plans to cut taxes for the rich and wealthy corporations while claiming to reduce the deficit:

Incredibly, both the Domenici-Rivlin plan and the Simpson-Bowles plan would reduce the top marginal income tax rate for the wealthiest Americans and reduce the corporate income tax rate, unnecessarily inflating the deficit.  In fact, last week's Simpson-Bowles plan would actually put an arbitrary cap on how much we can reduce the deficit with tax revenues.

Any plan that claims to address our country's deficit problems but does not let President Bush's tax cuts for the wealthy expire on schedule is hypocritical and should not be taken seriously.

Instead, both plans target working families:

Neither of these plans is even minimally credible.  At every juncture, they duck any fiscal measures that might impact the super-wealthy, choosing instead to stick working people with the bill for Wall Street's party.  And by cutting Social Security and Medicare benefits, both plans threaten the retirement security of millions of Americans. Both plans fail to solve our real long-term budget problem, which is the outrageously wasteful and expensive way health care is delivered in this country. 

Both plans do shift more health care costs onto consumers in hopes that they will use less care, but the enormous waste in our health care system is not driven by consumers.  The key to reining in health care spending is getting providers to deliver care in more cost-effective ways, not shifting costs to workers and seniors.

As expected, the Republican Party's plan, released only after the election for obvious reasons, does little more than provide new tax breaks for the rich, paying for them by targeting seniors with cuts to Social Security and Medicare.

Trumka expressed his preference for a proposal by Rep. Jan Schakowsky offered this week:

With respect to these key issues, Representative Schakowsky has shown a better way forward with the plan she released yesterday.  Stabilizing the national debt over the long term does not require us to choke off job-creating public investment, or cut Social Security benefits, or shift more health care costs onto the backs of workers.  And if we are serious about cutting the deficit, we need to let Bush's tax cuts for the wealthy expire on schedule, and we should not be cutting corporate tax rates or marginal income tax rates for the wealthiest Americans.  The last thing our country needs right now is a plan to redistribute wealth upwards from working people to the wealthy under the pretense of deficit reduction.

The Schakowsky plan, which argues for more spending in the short-term to promote job growth and long-term approaches to deficit reduction, proposes the following:

1. New investments in infrastructure, aid to states for education and law enforcement, unemployment insurance extension and other anti-poverty programs, totalling $200 billion.

2. Targeted cuts in military spending, mostly through troop reductions in Iraq and Afghanistan, but also through elimination of wasteful and unnecessary weapons systems like the unanimously despised F-22 program and excessive nukes.

3. Reduction in healthcare costs under federal programs.

4. Closing a $132 billion tax loophole that still exists for companies who move jobs overseas.

5. Letting the Bush tax cuts for the richest 2% of Americans expire.

In a statement, Schakowsky dismissed the effort to bring Social Security into deficit reduction plans:

Social Security has nothing to do with the deficit. Addressing the Social Security issue as part of the deficit question is like attacking Iraq to retaliate for the 9/11 attacks – there is simply no relationship between the two and attempting to conflate them does a grave disservice to America’s seniors.

Taking money from Social Security retirees whose average total income is $18,000 per year and average benefit is $14,000 ($12,000 for women) is simply wrong. It places them at fiscal risk and hurts the economy because they will be unable to purchase the goods they need.  Americans in poll after poll have indicated their opposition to benefit cuts – particularly at a time when Wall Street bankers are making record bonuses.

But since everyone else seems to be so worried about Social Security's long-term stability (note: no private corporation, individual, or other government program has the same long-term stability Social Security currently has), Schakowsky offers one reform: right now, only $106,000 of your income is taxed to fund your future Social Security benefits. Oh you don't make that much? Than this doesn't apply to you. Schakowsky would raise that cap to 90% of an individual's income, meaning that people who earn more than $106,000 would pay a fairer share to fund the Social Security prorgram. That's it. No benefit cuts, no privatization or any other half-baked schemes.

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