Progressives Present Alternative Budget: A Raise for America
by Jessica Schieder, 3/19/2015
Investing in our nation’s future requires funding. This week, the Congressional Progressive Caucus (CPC) revealed its vision of a public investment agenda that will get Americans working and give more people the opportunity to succeed. It pays for these investments through a series of progressive tax proposals, in which wealthy Americans and prosperous corporations would pay a fair share toward building the nation’s economic strength.
The CPC’s plan would invest $820 billion in our nation’s infrastructure and transportation, create an estimated 8.4 million family-supporting jobs by 2018, and avoid draconian cuts in domestic programs. It would also reduce the national debt by $4.3 trillion.
The key to “The People’s Budget” is strategic investment. Here is a very brief overview of the investments proposed in select areas:
- Infrastructure and Transportation: The nation will need to increase infrastructure and transportation spending by more than $1 trillion over the next decade, just to make required repairs to our nation’s roads, bridges, levees, and other infrastructure. The CPC budget recognizes this existing need and views it as an opportunity to create family-supporting jobs. It increases funding for our nearly-broke National Highway Trust Fund by responsibly raising the gas tax by 15 cents – a tax that has been unchanged since 1993 despite our growing infrastructure needs.
- Education: To educate the workforce of tomorrow, the CPC budget makes access to a quality preschool education a reality for all children and reaffirms our nation’s commitment to provide all students with a good education from kindergarten through high school. The budget would also reduce the cost of higher education at state schools through a matching program and offers debt relief to students.
- Social Security: Americans are by and large inadequately prepared for retirement. Stagnating wages, a tough job market, and the decline of employer-sponsored retirement plans have increased Americans’ reliance on Social Security when they retire. While the budget does express support for proposals to expand Social Security and tie benefits to a more accurate measure of inflation, changes to Social Security are not included in the budget. The plan recommends paying for an expansion of Social Security by eliminating the cap on Social Security contributions.
- Hunger: Approximately 46.5 million Americans live in poverty today; one in five children in the United States are poor. The CPC budget fights hunger by undoing cuts to the SNAP nutrition program that lowered the average value of the food benefits that households can receive by $216 per month in 2014. An additional $10 billion in new funding will go to children’s nutrition programs – including school meals, preschool meals, snacks for children in long-term care, and investments in school kitchens.
- Environment: The sustainable investments proposed by the budget not only grow the economy and create jobs but also protect the environment. The plan cuts off polluters and fossil fuel companies from tax breaks and subsidies, saving $118 billion over the course of a decade. Additionally, the plan imposes a tax on carbon pollution, with funding used to invest in renewable energy, thereby reducing our ecological footprint.
In order to make needed investments, the budget raises revenues in several areas, including:
- Taxing the Wealthy Fairly: The budget increases taxes on households making more than $250,000 per year to Clinton-era levels. Additionally, individuals making more than $1 million per year will be asked to pay rates that are higher (but still lower than those under the Reagan administration). For households making less than $250,000 per year, tax rates won’t rise; in fact, additional tax breaks for many working families are made available. The Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) will be enhanced.
- Stopping Subsidies for CEOs: Corporations currently receive tax breaks for bonuses given to CEOs (as long as they can claim the bonuses are “performance-based”). The CPC budget eliminates tax breaks for executive bonuses.
- Keeping Jobs and Corporate Profits at Home: The budget closes a loophole in the tax code called “deferral” that allows corporations to stash money offshore and avoid paying taxes on those profits indefinitely. Additionally, the plan discourages corporate inversions, whereby American corporations unpatriotically claim to be foreign corporations to lower their tax bill.
- Taxing Wall Street: In order to raise revenue and discourage excessive speculation on Wall Street, the budget imposes a Financial Transactions Tax (FTT), a feature found in more than 30 countries. Additionally, the plan proposes a Financial Crisis Responsibility Fee on the biggest banks to discourage excessive borrowing.
- Rationalizing Defense Spending: The CPC budget reduces the Overseas Contingency Operations (OCO) fund, a temporary fund created to direct wartime funding to Afghanistan and Iraq, and finds additional savings in reducing the portion of Defense jobs that are outsourced to private business, and retiring some Cold War-era weapons systems.
You can learn more about the budget by visiting “The People's Budget: A Raise For America”.
The Congressional Progressive Caucus’ vision for America’s future is one of several being presented by lawmakers during this year’s budgeting process. Competing visions include the House Republicans’ budget, the Senate Republicans’ budget, and the president’s budget request.
The People’s Budget reduces carbon pollution, while the House Republican budget encourages more fracking and oil production in the United States while reducing regulations – a potentially lethal combination. The People’s budget provides a very concrete approach to paying for necessary infrastructure investment; the House Republican budget says it supports “sensible reforms to ensure the solvency of the Highway Trust Fund,” but fails to provide details about these reforms. The People’s budget discourages corporations from sending jobs and profits abroad, while the House Republican budget denounces financial regulations as “onerous” less than a decade after the big banks triggered a financial crisis that nearly destroyed our economy.
Budget battles are often painted as black-and-white disagreements over “boring” numbers. But the results of the federal budget discussions touch every face, family, and zip code in the country. The dignity workers have on the job, the food that is served on dinner tables, and the financial security of working families are all dependent on budget decisions made by lawmakers.
Working families have been largely left out of our recovery from the financial crisis, so it is refreshing to have a vision for an economy that focuses on ensuring the prosperity of average working people. The People’s Budget provides exactly this.
Next week: Look for a side-by-side comparison of the CPC budget and other visions for the budget from the Center for Effective Government.
For Further Reading:
It’s Baa-aack: What to Expect from the Budget Season this Year, The Fine Print, 3/17/2015
What We Lose with a Privatized Postal Service, The Fine Print, 3/4/2015
State and Local Taxes Fall More Heavily on Lower-Income Americans, The Fine Print, 1/27/2015