Reject the Fiscal Cliff, Tax the Rich, Invest in Infrastructure and Services
DSA rejects the “fiscalcliff” hysteria of the corporate establishment and the pressure for a “GrandBargain” that would cut Social Security, Medicare and Medicaid. While unemploymentremains high and economic growth slow, the government should not imposeausterity measures that reduce essential programs that benefit the middle andworking classes and that further shred the safety net for the most vulnerable.Rather, government policy should prioritize investments in job creation, publiceducation and healthcare reform, while raising essential revenues by taxing thelarge corporations and wealthiest citizens who can afford to pay.
Those who will suffer. Photo. D. BaconImmediately after theelection, Wall Street-backed foundations such as Third Way and the ConcordCoalition organized a “Campaign to Fix the Debt” to spin the election resultsas a mandate for a “bi-partisan” focus on reducing the deficit as the highestnational priority. For decades the billionaire Pete Peterson has funded groupsthat claim that the universal entitlement programs Social Security and Medicareare bankrupting the nation and that their future growth must thus bedrastically trimmed. These neoliberalsscored an initial success in 2011 when the Simpson-Bowles Congressional Commissionput to a vote a long-term “budget compromise” that would have instituted threetimes as much in budget cuts than in tax increases.
If your tax bill goes up$2,200 a year, or you're one of the millions who would stop receivingunemployment benefits, the cause of your economic pain is not some a naturaldisaster, or a major structural flaw in the economy. The cause is Republicanfear of being beaten in a primary by people like Sarah Palin, Sharon Angel orRichard Mourdock - funded by far Right Wing oligarchs like Sheldon Adelson andthe Koch Brothers. It's that simple.
What is the fiscal cliff? IfCongress makes no changes to the Budget Control Act of 2011, the Bush tax cutswill expire on January 1, 2013. In addition, automatic cuts of $55 billion eachin annual defense and “discretionary domestic” spending will begin. These taxincreases and spending cuts, combined with the expiration of the FICA payrolltax cut and the end of extended unemployment benefits, will create asignificant fiscal drag on the economy. The annual budget deficit will fallfrom over $1 trillion in 2012 to $500 billion dollars in 2013; and theresulting drop in aggregate demand from this combination of spending cuts andincreases in taxes would almost definitely cause a double-dip recession.
Like other progressivegroups, DSA rejects the notion that some “unified” fiscal cliff must beaddressed in the lame-duck session of Congress. It is in fact a “fiscalobstacle course” that Congress should address without panic early in 2013, whileheeding the election results. A progressive solution would include restoringall automatic domestic cuts, while making more strategic and deeper cuts indefense procurement spending. The revenue for expanding domestic social welfarespending can be raised by ending the Bush tax cuts for the top 2% and corporatetax-giveaways, while instituting a modest financial transaction tax on stockand bond transactions. In addition, Congress should restore the tradition ofnot requiring a separate authorization vote every time the current debt ceilingis crossed. Requiring such a vote provides the right with endless opportunitiesto blackmail the Congress into counter-productive budget slashing.
Specifically, DSA advocatesthat Congress pass legislation to:
1. Restore all the automaticcuts to the domestic discretionary budget. These cuts would deny WIC nutritionto 750,000 mothers and children, eliminate Title I funding for 1.8 millionlow-income school children and would deny 734,000 households home heatingassistance. In addition, it would cut financing of all federal regulatoryagencies by 10%.
2. Reauthorize federalfunding of extended unemployment insurance. Otherwise, on January 1, 1.5million unemployed workers and their dependents will lose their unemploymentbenefits.
3. Restore the improvementsto the Earned Income Tax Credit and the Child Care Credit that have reduced thetax burden on the middle and working classes. To preserve the purchasing powerthat would be lost by an end to the 2% FICA payroll tax cut, reintroduce the2009 Recovery Act refundable tax credit of $500 for individuals and $1,000 forfamilies earning under $110,000.
4. Abolish the Bush tax cutson the top 2% and tax capital gains and stock dividends at the same rate asearned income. Increase effective corporate taxation through the elimination ofcorporate tax loopholes and corporate “tax expenditures.” These reforms would yield $275 billionin additional annual revenue. In addition, instituting a “Robin Hood Tax” couldnet another $300 billion in annual revenues.(This financial transaction tax is a small sales tax , for example, 0.25 % onall trading in stocks and debt instruments such as bonds, derivatives, andfutures.
6. Extend and strengthenSocial Security for future generations, funding enhancements by progressivelylifting the cap on earned income subject to the FICA tax and extending it toincome derived from capital.
7. Progressively extend andstrengthen Medicare/Medicaid, until it covers U.S. residents of all ages, whileinstalling effective cost controls.
DSA welcomes and will workwith broad national and local coalitions that are forming to fight cuts inSocial Security, Medicare and Medicaid; to preserve programs that benefit theworking poor and most vulnerable; to promote greater investment in publiceducation and healthcare and to raise revenues by taxing the rich andcorporations. We also supportTavis Smiley’s and DSA National Honorary Chair Cornel West’s call for PresidentObama to convene a White House conference on poverty.
Sacramentolocal DSA. https://sites.google.com/site/sacramentodsa/
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