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Austerity Alternatives | The Nation

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George Zornick

George Zornick

Action and dysfunction in the Beltway swamp. E-mail tips to george@thenation.com

Austerity Alternatives

Yesterday we posted a MoveOn.org-produced video of former Labor Secretary Robert Reich explaining how the supercommittee might reduce the deficit without imposing crushing austerity measures, nor damaging the social safety net relied upon by millions of Americans. It’s really excellent, and you ought to check it out.

On the eve of some decision by the supercommittee—or no decision and painful automatic cuts—this is a time to remember the other ideas out there for balancing the budget. There are plenty of credible and thoughtful plans out there. Granted, they are not politically viable at the moment, given the Republican Party’s control of the House of Representatives, and its ability to stop virtually anything in the Senate—not to mention the six votes it controls on the supercommittee.

But to listen to most media coverage of the deficit debates—and too often, the rhetoric thrown about by Republicans and some Democrats—one comes away thinking the only way to get the fiscal house in order is via “entitlement reform” and deep domestic spending cuts, along with higher taxes and fewer loopholes.

But this just isn’t so. For example, the Congressional Progressive Caucus crafted a “People’s Budget,” which eliminates the deficit within ten years while creating a $31 billion surplus—all while protecting valuable programs like Medicare, Medicaid and Social Security. You can read the entire budget here (PDF), a one-page summary here (PDF), and an outside analysis by the Economic Policy Institute here (PDF).

Here are some of the plan’s features. On taxes:

    Ends the recently passed upper-income tax cuts and lets Bush-era tax cuts expire at the end of 2012

    Extends tax credits for the middle class, families and students

    Creates new tax brackets that range from 45 percent starting at $1 million to 49 percent for $1 billion or more

    Implements a progressive estate tax

    Eliminates corporate welfare for oil, gas and coal companies; closes loopholes for multinational corporations

    Enacts a financial crisis responsibility fee and a financial speculation tax on derivatives and foreign exchange

On healthcare:

    Enacts a healthcare public option and negotiates prescription payments with pharmaceutical companies

    Prevents any cuts to Medicare physician payments for a decade

On defense:

    Responsibly ends our wars in Iraq and Afghanistan to leave America more secure both home and abroad

    Cuts defense spending by reducing conventional forces, procurement and costly R&D programs

The key theme of this plan is to put investment and job creation up front, while protecting the programs that many Americans rely upon for their economic well-being during a recession. Even Bill Clinton, no flaming liberal, called the plan “the most comprehensive alternative to the budgets passed by the House Republicans and recommended by the Simpson-Bowles Commission.”

Meanwhile, Occupy DC met in downtown Washington to discuss alternate deficit reduction proposals that would protect the 99 percent and attempt to correct rampant income inequality. They drew on advice from a wide array of economists and policy experts during the meeting, which you can watch here. The outline of their plan is here—it’s quite detailed and provides evidence and documentation for many of its claims. They are careful not to say it’s a “demand” of the OccupyDC movement, but the next time someone says the occupiers have no goals, you can send them this.

The plan shares many broad goals of the People’s Budget, like taxing high and corporate incomes more fairly and protecting safety net programs from cuts, while investing in infrastructure spending and other projects that will increase employment while improving the country.

Again, in the near term—as in, within the next six days, when the supercommittee must act—there’s no chance these proposals become reality. But OccupyDC says they offer this plan as a solution once the supercommittee fiasco concludes:

Once again, the people of the United States will see corruption reign supreme. Despite evident solutions to the deficit and the economic collapse, the Congress will show its corruption and dysfunction and be unable to put forward real solutions.

We issue this report to alert everyone—the political system is broken. It is corrupted by the power of concentrated wealth, campaign donations and corporate power. The job of the occupations across the country is to build an independent nonviolent movement that replaces this corrupt system with one in which the people rule. The battle between concentrated wealth and participatory democracy will be heightened by the evident corruption of the Super Committee which will not challenge the unfair policies of the 1 percent while requiring austerity for the 99 percent.

The economic and political elite should expect protests to grow. We are at the beginning of what will be seen as a historic revolt against status quo elites that will transform this economy as well as how the United States is governed.

Finally, in the spirit of Occupy Wall Street’s participatory democracy—perhaps you can come up with your own deficit reduction plan. The Pew Charitable Trusts has an interactive calculator that lets you play with 100 different spending and tax policies to create reduce the debt to sustainable levels, and the New York Times offers something similar here. If you come up with an interesting plan, leave it in the comments.

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