Murray-Ryan Budget Deal Announced

Yesterday evening, Senator Patty Murray (D-WA) and Representative Paul Ryan (R-WI) announced a budget proposal to replace a portion of sequestration cuts. The plan would allow the continuation of cuts to Medicare, increase user fees, and make it more expensive for government employees to save for retirement.

But perhaps even more troubling is what the proposed plan omits.  Not a single tax loophole is closed, expiring unemployment insurance provisions impacting 1.3 million Americans are not addressed, and investments in jobs and infrastructure are not discussed.

Tax Loopholes Unclosed

The proposal includes no provisions to close loopholes, even for the most egregious corporate abuses. While  proposals to increase user fees were widely expected as a means of blunting sequestration cuts, public support for closing corporate loopholes, as well as media attention, had left some optimistic that tax loopholes for the wealthy and corporations could be addressed, even outside of a larger tax reform package.

Patty Murray wrote in a November op-ed for the Washington Post, “It would be unfair, and unacceptable, to ignore every last loophole and special interest carve-out yet ask seniors and families to bear the burden of deficit reduction alone.”

Nicole Tichon of the Financial Accountability and Corporate Transparency (FACT) Coalition called the proposal released yesterday “a missed opportunity to raise revenue through good tax policy, noting that,  “While many ordinary Americans are continuing to be asked to sacrifice, we’re letting the most profitable companies off the hook yet again by maintaining a flawed system.”

Extended Unemployment Insurance Not Renewed

The budget plan does not include funding for extended federal unemployment assistance to the long-term unemployed— even though the numbers of long-term unemployed are at the highest levels in 40 years.

Without an extension, 1.3 million workers will be abruptly cut off from benefits in the week between Christmas and New Year’s, as Emergency Unemployment Compensation (EUC) program expires. By the end of 2014, 3.6 million additional people will lose access to unemployment benefits beyond 26 weeks.

Retirement Support for Government Employees and the Military Cut

The budget plan would ask newly hired federal employees to pay 4.4 percent of their salary to fund their pensions. The average federal retiree, who retired in 2011 (the most recent available data), received a monthly pension of $1,383 a month. The budget plan would also reduce the pensions received by retired veterans under the age of 62 by lowering their annual cost-of-living adjustment .These changes take $6 billion out of the pockets of federal retirees and another $6 billion out of the pockets of our nation’s retired veterans.

American Federation of Government Employees (AFGE) National President J. David Cox Sr. criticized the plan, saying, “AFGE rejects the notion that there should be a trade-off between funding the programs to which federal employees have devoted their lives, and their own livelihoods.”

Deficit Reduction, Still the Overriding and Misplaced Goal

Although the proposed plan partially lifts the sequester for two years, it keeps the long-term reductions in federal spending required by the Budget Control Act in place. And it includes $20 billion for additional deficit reduction.

This budget deal asks the unemployed, veterans, and public employees to sacrifice – even though jobless rates remain high and the nation faces a looming retirement security crisis. Meanwhile, corporations, who have been enjoying record profits and the lowest effective tax rates in decades, are untouched. It’s time to ask firms that are doing so well by operating in America to do well by Americans – to pay their fair share for the legal system, the public transportation network, and public safety and communications structures that enable their success.


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