|Number 505||April 10, 2012|
This Week: The Federal Budget as "Moral Compass"
I've been spending the past couple of weeks reading various federal budget proposals and accompanying analyses, and in this issue I report on the two that I consider most interesting, one from the "left" and one from the "right." Neither of them will pass, but spending a little time with them can help to understand some things about the State of the Union. In its press release announcing their proposed budget for the coming fiscal year, the Congressional Black Caucus stated that they "believe that budgets serve as a window into the moral compass of a nation's conscience—and our nation's compass is horribly off."
I agree, and this issue offers a little information for those who wish to know more about the federal budgeting process and what is happening right now as our elected officials begin to hammer out a budget for Fiscal Year 2013.
Next week I'll have a list of further reading for those who want to take a closer look at the moral compass of the nation.
In the preface to their annual report, The State of Black America, which was released on March 7th (and ignored by the corporate media), National Urban League President Marc Morial remarked
"More than the economy, more than jobs, more than an excellent education for all children, the single issue that stands to have the greatest impact on the future of Black America in 2012 is the vote."
"It's no coincidence that a nationwide rollback in voting rights for American's most vulnerable citizens is happening just as elected officials mount unprecedented campaign to slash investments in education and economic development. As the nation struggles toward a financial recovery, public investments in education, job training and job growth are more vital than ever. Yet those very investments are targeted for sacrifice in favor of diverting more and more of the nation's resources to those at the very top of the economic pyramid. At the same time, a coordinated effort is underway to exclude from the political process the very citizens whose futures hang in the balance."
If you want, you can read the entire 190-page report for free online. I recommend checking out the "2012 Equality Index." This should be as well-known as, or better-known than, the Dow Industrial Index.
I'm going to include in every issue of Nygaard Notes, for the foreseeable future, one or two resources to help us all learn about and/or take action on the issue of Voter Suppression about which I've been writing for the past few issues.
This week it's specific to my state of Minnesota. The Minnesota "House and Senate, with Republicans supplying all the 'yes' votes, gave final approval on Wednesday, April 4th to a proposed constitutional amendment that would require voters to show a photo ID." (Star Tribune, April 4, 2012)
So, in honor of that disgraceful vote, this week's Website of the Week is the Minnesota ACLU's document "What to Say to Fight Voter ID: Here Are a Few Ways to Talk about How Requiring a Voter Id = Voter Suppression." The ACLU contrasts fact with fiction and they include seven "talking points" to use when talking about why to vote against this anti-democracy amendment. My favorite fact is the first one:
"Despite a massive investigation by voter ID proponents, there were only 160 voter eligibility violation cases filed in 2011, and only 140 convictions. All of which were Felons voting before they were eligible. 2,700,000 votes were cast in 2010 primary and general elections. That is a .006% rate of error. Contrast that with the 45% of eligible voters who did not vote in 2010, which is the bigger problem?"
Read, print, and share the flyer by going HERE.
The budget proposed by Wisconsin Representative, and House Budget Committee chairman, Paul Ryan and approved by the U.S. House of Representatives on March 29 has been the subject of numerous press reports recently because President Obama has been attacking it. The attacks get a lot of press, but the budget itself remains a bit of a mystery, since all we have to go on is the "he said/she said" reporting in the corporate media.
For example, an April 4th NY Times article tells us, on the one hand, that Obama made a speech about the Ryan budget, "Warning against what he said would be severe cuts to college scholarships, medical research, national parks, and even technology to make accurate weather forecasts..." On the other hand, "A spokesman for the House Budget Committee, Conor Sweeney, said Mr. Obama's assertions about the cuts in the budget 'are simply false.'" Two sides to every story!
Surely there are some facts to be had here, are there not? There are. The two most "extreme" budget proposals are the Ryan budget and the Congressional Progressive Caucus budget, so I'll say a little bit about them in this issue, starting with the reactionary proposal
The Path to Prosperity?
The Ryan Budget, which is called the "Path to Prosperity," for Fiscal Year 2013 hasn't been out all that long, so there isn't a huge amount of detailed analysis. But it's very similar to the version that came out last year, which also featured extreme cuts which were nonetheless smaller than those in this new version. I have read the actual Path to Prosperity—as much as I could take, that is—and you can, too. I'll give the link to the document in the next Nygaard Notes.
The rhetoric in this document is such that it's pretty hard to take it seriously—or even to understand. For example, Ryan tells us that his budget "promises to renew confidence in the superiority of human freedom." I'm tempted to offer a prize to anyone who can figure out what that is supposed to mean.
Fortunately, the Congressional Budget Office (CBO) has done some analysis of the document, and several commentators have drawn conclusions based upon that analysis. It is from these analyses that I draw the following points.
The most amazing thing that I've discovered so far is that the budget proposed by Mr. Ryan would result in the elimination of the federal government's role in... well, in just about everything.
For instance, here's the Coalition on Human Needs (CHN), writing in a recently-updated (just last week) report called "Self-Inflicted Wounds: Protecting Families and Our Economy from Bad Budget Choices." Speaking of the Ryan budget, CHN says: "According to the Congressional Budget Office, by 2050, most annually appropriated domestic programs would be wiped out, and Medicaid's federal funding would be only one-quarter what it would be under current law. Additionally, the proposal makes no investments in job creation, increases military spending, and gives the rich trillions more in tax cuts."
The Center on Budget and Policy Priorities (CBPP) offers a somewhat-more-lengthy explanation of why CHN says that:
"The CBO report, prepared at Chairman Ryan's request, shows that Ryan's budget path would shrink federal expenditures for everything other than Social Security, Medicare, Medicaid, the Children's Health Insurance Program (CHIP), and interest payments to just 3.75 percent of the gross domestic product (GDP) by 2050. Since, as CBO notes, 'spending for defense alone has not been lower than 3 percent of GDP in any year [since World War II]' and Ryan seeks a high level of defense spending—he increases defense funding by $228 billion over the next ten years above the pre-sequestration baseline—the rest of government would largely have to disappear. That includes everything from veterans' programs to medical and scientific research, highways, education, nearly all programs for low-income families and individuals other than Medicaid, national parks, border patrols, protection of food safety and the water supply, law enforcement, and the like."
That's in the long run. In the short run, the Ryan Budget "would get at least 62 percent of its $5.3 trillion in non-defense budget cuts over ten years . . . from programs that serve people of limited means."
That 62 percent, CBPP tells us, includes the following four categories of cuts:
* $2.4 trillion in reductions from Medicaid and other health care for people with low or moderate incomes. The plan shows Medicaid cuts of $810 billion, plus savings of $1.6 trillion from repealing the health reform law's Medicaid expansion and its subsidies to help low- and moderate-income people purchase health insurance.
* $134 billion in cuts to the Supplemental Nutrition Assistance Program, or SNAP, formerly known as the Food Stamp Program. If Chairman Ryan's proposed SNAP savings were achieved entirely through eligibility cuts, between 8 and 10 million people would be knocked off the program.
* At least $463 billion in cuts in mandatory programs serving low-income Americans (other than Medicaid and SNAP). Chairman Ryan's budget documents indicate that he is proposing $1.2 trillion in cuts in mandatory programs other than Social Security, Medicare, Medicaid, and other health programs, but the documents do not specify how much specific programs would be cut (with the exception of SNAP).
* At least $291 billion in cuts in low-income discretionary programs.
"Our assumptions regarding the size of the low-income cuts," CBPP states, "are conservative."
All of these "highlights" are from the budget that was passed in the U.S. House of Representatives on March 29th, by a vote of 228-191.
The website "Business Insider" says that "if Rep. Paul Ryan's budget plan is the 'Path to Prosperity,' the Congressional Progressive Caucus has offered the 'Road to Ruin.'"
I wrote in May of last year about the budget proposed by the Congressional Progressive Caucus (CPC), which at that time was called The People's Budget. This year's version, for Fiscal Year 2013, is called the Budget for All, or BFA.
The House of Representatives rejected the BFA by a vote of 78-346. Considering that there are 75 members of the Progressive Caucus, and 190 Democrats overall, the failure to enact a budget that is more in line with the wishes of the majority of USAmericans is clearly not a function of there being too many Republicans in Congress. There's too much of something in Congress, but that's for another issue. For now, let's have a look at this So-Underreported-It's-Almost-A-Secret "road to ruin."
THE Number One issue in the country, according to virtually every major opinion poll, is jobs. With the unemployment rate standing at 8.2 percent (officially), and having been above 8 percent for over three years, this makes perfect sense. (The rate was between 4 and 6 percent from 1995 to 2008.) The Budget for All accordingly makes job creation a top priority by including $2.9 trillion over 10 years for job creation through public works projects and other means. This would result in larger deficits in the near term, but less in the longer term, since more people working means more wealth for us all.
According to a technical analysis by the Economic Policy Institute (EPI), the policies promoted by the BFA fall into six broad categories. In addition to #1, Job Creation, the categories are: 2. Changing Military Priorities; 3. Health Care Reform; 4. Reform of the Government itself; 5. Stabilizing Social Security, and; 6. Reforming the Tax Code. Here are just a few words about each category.
JOBS: The BFA includes a six-year, $556 billion plan to expand investments in highways, highway safety, passenger rail, and high-speed rail, among other projects. $50 billion would be used to improve roads, bridges, transit systems, border crossings, railways, and runways. A National Infrastructure Bank would be established, and the BFA enacts a bill that would "fund the jobs necessary for large-scale school rehabilitation projects as well as restoration and rehabilitation of parks and public lands; create part-time work-study jobs for hundreds of thousands of eligible college students; fund the hiring and rehiring of teachers, police officers, and firefighters; fund grants to hire health care providers; create a community corps of citizens to do much-needed work on the local level, including energy audits, addressing blight, rural conservation work, housing rehabilitation, and recycling and reclamation of reusable materials; and would create jobs in early childhood care and education by providing additional funding for Early Head Start."
PEACE: The BFA would end funding for the occupation of Afghanistan and all other "overseas contingency operations"—that's Pentagon-Speak for foreign wars—starting in 2014. The BFA would further reduce military spending by gradually reducing active duty military personnel through attrition; sharply reducing private contracting; and overhauling weapons acquisitions, modernization, and strategic capabilities. Savings would NOT come from military personnel wages, pensions, or health care benefits for the troops. It cuts the system, not the soldiers who've sacrificed so much.
HEALTH CARE: The Budget for All would negotiate drug prices with pharmaceutical companies, would make generic drugs more widely available, would take steps to reduce fraud and waste in Medicaid, would crack down on Medicare Hospital Insurance payroll tax avoidance, and would end subsidies for junk and fast food advertising to children. Perhaps most importantly, the BFA would implement a public insurance option to compete with private insurance plans.
REFORMING GOVERNMENT: The BFA includes policy changes to strengthen democracy and reform government programs that are of broader scope than defense, health, Social Security, or tax proposals. These include provisions for the public financing of elections, comprehensive immigration reform, reducing agriculture subsidies, and restoring solvency to the state-based unemployment insurance system that has taken a beating during the recession and the ongoing snail-like recovery.
SOCIAL SECURITY: My favorite sentence from the whole EPI analysis is this one: "The Budget for All recognizes that none of the pressing long-run budget challenges facing the country stems from Social Security." The Budget for All does act to preserve Social Security benefits by removing the exemption from Social Security taxes that high earners have (wages above $110,000 currently don't pay Social Security taxes.) EPI points out that "This policy alone would solve almost 100 percent of the very long-term (75-year) shortfall facing Social Security."
TAXES: The various tax changes in the BFA are really too numerous and too complicated to go into in this article, but the EPI analysis summarizes by saying that the BFA "would eliminate some of the more egregious tax loopholes and enact progressive tax reforms, dedicating the savings to public investments and deficit reduction." The focus would be on the scam-laden international tax system ($168 billion over the next nine years); Changes in energy taxes ($24.9 billion); Cracking down on the misclassification of employees, and; Ending the tax scam involving corporate stock options. One of the best things the BFA would do is to institute a financial transactions tax. (I explained this in Nygaard Notes #438: "'Is Capitalism Fatally Flawed?' Streets, Suites, and Room to Maneuver.")
That's all I have room for right now. In the next Nygaard Notes I'll give a list of some of the best sources of information about the various budget proposals that are floating around.