published Sunday, March 24th, 2013

GOP budget not in line with needs of nation

Congressional Republicans hastily approved a mathematically impossible retread budget of their party's worst ideas before fleeing Washington last Thursday for a two-week Easter break.

So it's almost certain we'll see Reps. Chuck Fleischmann and Scott DeJarlais showing up here during their holiday to paint flowers on their revamped budget wrecking ball when they pause to brag about their other fiscal insult: Their interim legislation to keep the government funded through September by doubling down on the harshest measures of the current budget sequesters, which are randomly hurting vital government services, the job base and economic growth.

The upside of talking to them, if they would pay attention, would be the opportunity to call them to account for being so belligerent to the needs of ordinary families and to a common sense approach to economic recovery.

The budget sequesters that began on March 1 are expected to cost roughly 750,000 jobs and reduce economic growth by half a percent by the end of the year. The stock market, buoyed mostly by corporate earnings and Federal Reserve stimulus, may stay up. But slowing job growth is bound to dent housing sales and consumer spending on autos and big-ticket durable goods.

Cutbacks through federal employee furloughs and federal programs and public services will crimp infrastructure funding (think, Chickamauga Dam lock replacement and highway repairs), education and children's services, and housing, food and medical assistance to the needy.

Damage from the broad budget scythe of the sequesters, however, pales beside the recycled version of the GOP-controlled House budget proposal. It again enshrines House Budget chairman Rep. Paul Ryan's most draconian wish list: Conversion of Medicare to a voucher program; repeal of the Affordable Care Act and funding for the health care exchanges which are scheduled to begin next January; stiff cuts to Medicaid and Social Security and a raft of other federal services; and, in a feudal nod to the big banks that brought on the 2007 fiscal crash, repeal of the Dodd-Frank financial reform act.

While it purports to cut federal spending by $4.6 trillion over the decade, it fails to spell out how such savings would be produced. It mandates tax cuts both for individuals and corporations, for example, but it leaves no instructions on how to fill a $6 trillion hole in new revenue to balance its budget numbers. Ostensibly that would take deeper cuts in social spending.

The budget proposed by Senate Democrats, for a change, makes a far more logical and specific approach to budget reform and deficit reduction. It does so by rational adult treatment to reduce the tax-expenditure spending that Republicans ignore. Not surprisingly, most of the tax-giveaway credits and taxpayer subsidies provided by tax codes go to the clients of well-heeled lobbyists who advocate expansive tax subsidies and loopholes for big corporations and the most affluent of the nation's earners.

The Senate Democrat's budget would raise close to $1 trillion in new revenue over the next decade by trimming these taxpayer-financed subsidies, along with another $300 million in the same period through more rational cuts in Medicare services built on efficiencies under the Affordable Care Act. These would include the tax subsidies awarded by Republicans in the 2003 Medicare reform act to private insurers' profits to get them to compete for Medicare patients.

The hurdle Democrats must overcome is the work of demonstrating to Americans how tax subsidies for wealthy corporations and the rich are essentially financed by ordinary taxpayers. Taxpayers must be shown, for example, that mortgage tax credits for multimillionaires' multiple vacation mansions are not justified and need to be capped; or that tax credits given to corporations for new headquarters buildings, or that profits they store in overseas tax havens, cost the government money just like the social programs that Republicans want to cut.

This is the battle yet to be waged and won. Republicans refuse the need to cut the government's $1 trillion annual revenue losses to tax loopholes and tax expenditures. Ordinary voters must pressure them to do so to fairly cut federal deficits.

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TirnaNOG said...

The downside and actual damage of the sequester is beginning to show its damage. Even within the military, as civilian workers on military bases work days are being shortened and actual furloughs begin to take shape.

March 24, 2013 at 11:39 a.m.
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