Editore"s Note
Tilting at Windmills

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April 22, 2011

THE OVERLOOKED PROGRESSIVE ALTERNATIVES.... There's been plenty of talk about the various proposals on long-term debt reduction, with a small handful generating the most attention. President Obama's plan is competing with proposals from Paul Ryan, Simpson-Bowles, Rivlin-Domenici, etc. Some are more credible than others, but the plans span the ideological spectrum from the right to the ... center.

Where's the left? As it turns out, there are progressive alternatives, which haven't generated much in the way of coverage. I recently gave a plug to Rep. Jan Schakowsky's (D-Ill.) deficit-reduction plan, but she's not the only one with realistic proposals intended to address the problem from a liberal perspective.

This week, the budget proposal from the Congressional Progressive Caucus is suddenly getting some attention, and I'm glad. Does it stand any chance of becoming law? Of course not. But does Paul Ryan's plan have a shot at passing? Despite gaining House approval, it does not.

Matt Miller got the ball rolling a few days ago, noting in passing that the Congressional Progressive Caucus' budget plan "wins the fiscal responsibility derby" against its competing proposals because "it reaches balance by 2021 largely through assorted tax hikes and defense cuts."

This one sentence seemed to have let much of the political world that the CPC plan exists. The Economist noted today:

Have you ever heard of the Congressional Progressive Caucus budget plan? Neither had I. The caucus's co-chairs, Raul Grijalva of Arizona and Keith Ellison of Minnesota, released it on April 6th. The budget savings come from defence cuts, including immediately withdrawing from Afghanistan and Iraq, which saves $1.6 trillion over the CBO baseline from 2012-2021. The tax hikes include restoring the estate tax, ending the Bush tax cuts, and adding new tax brackets for the extremely rich, running from 45% on income over a million a year to 49% on income over a billion a year.

Mr Ryan's plan adds (by its own claims) $6 trillion to the national debt over the next decade, but promises to balance the budget by sometime in the 2030s by cutting programmes for the poor and the elderly. The Progressive Caucus's plan would (by its own claims) balance the budget by 2021 by cutting defence spending and raising taxes, mainly on rich people. Mr Ryan has been fulsomely praised for his courage. The Progressive Caucus has not.

I'm not really sure what "courage" is supposed to mean here, but this seems precisely backwards.

Bingo. Trying to restore tax rates to levels that were pretty normal in the America John Boehner grew up in takes some courage, because it challenges the powerful and the elite to sacrifice. Republicans are doing the opposite -- as President Obama put it the other day, "Nothing is easier than solving a problem on the backs of people who are poor, or people who are powerless and don't have lobbyists or don't have clout."

Paul Krugman also had an item on this today, noting some of the policy specifics.

The CPC plan essentially balances the budget through higher taxes and defense cuts, plus some tougher bargaining by Medicare (and a public option to reduce the costs of the Affordable Care Act). The proposed tax hikes would fall mainly on higher incomes, although not just on the top 2%: super-brackets for very high incomes, elimination of deductions, taxation of capital income as ordinary income, and — the part that would be most controversial — raising the cap on payroll taxes.

None of this is economically outlandish. Marginal tax rates on high incomes would rise substantially -- enough to make even liberal economists slightly uncomfortable -- but the historical evidence suggests that the incentive effects wouldn't be too severe. Overall taxes as a share of GDP aren't given, but they would clearly remain well below European levels.

Also note, the CPC numbers add up -- which is more than we can say for the House Republican plan -- actually dealing with the problem conservatives claim to care about.

In case this isn't obvious, it's important to have competing ideas in the larger conversation. Senate Majority Whip Dick Durbin (D-Ill.) this week said his Gang of Six plan would fall, ideologically, between the White House's plan and Paul Ryan's -- as if that were a good thing, and the president's approach represents the liberal tent-pole.

That's not even close to being right. There are a variety of credible alternatives, and Obama's vision may represent the center, but there's a sensible, sound liberal approach that deserves to be in the mix.

Steve Benen 3:00 PM Permalink | Trackbacks | Comments (10)

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Comments

Steve, I gotta admire your restraint in refusing to call a spade a spade. In particular, you seem to overlook the obvious: The US Senate consists exclusively of very wealthy people. These Senators look out for their own. They do not want to pay higher taxes. It will be this way until the tea-partiers join with us lefties in a popular uprising. That is, never.

Posted by: smedley on April 22, 2011 at 3:18 PM | PERMALINK

Most of us look out for Number One first. Sadly, those elected as Public Servants do the same. Term Limits are the obvious answer, but would any "Pubic Servant" would vote for them? (Rhetorical Question!)

Posted by: DAY on April 22, 2011 at 3:23 PM | PERMALINK

The CPC plan essentially balances the budget through higher taxes and defense cuts, plus some tougher bargaining by Medicare (and a public option to reduce the costs of the Affordable Care Act)

This, my dear firebaggers (if there are any in the audience) is how you keep the pressure on a public option in a sensible and gets it passed down the road. Watch and learn.

Posted by: Danny on April 22, 2011 at 3:28 PM | PERMALINK

No one to blame but ourselves! I am surely not alone in lamenting the non-existence of anything like a left/progressive response ... and here there is one, a real one, a meaningful and plausible one ... and I had no idea. Yeah, yeah, the MSM focuses on the red meat like Trump and birther bills which are a TOTAL distraction from the "real work" of the country ... Americans should know what us "crazy lefties" are for! It's actually pretty conservative stuff!

Posted by: ManOutOfTime on April 22, 2011 at 3:35 PM | PERMALINK

Odd, to see The Economist describe Ryan's idiotic budget plan as "fulsomely praised." If it weren't for The Economist's rightward political tilt, I'd think they were't impressed by Ryan. But since The Economist is basically conservative, I'm left to conclude either that they don't care for the uncritical worship of Ryan by the American press or they don't know their own language.

http://dictionary.reference.com/browse/fulsomely

Posted by: John B. on April 22, 2011 at 4:02 PM | PERMALINK

This isn't a SERIOUS plan!

No, we need "shared" sacrifice.

"Shared" sacrifice means the rich pay a penny - it means the poor, the middle, the old, and the sick, sacrifice everything, while the rich share in what's left over.

Yeah, that IS serious. Seriously fucked up!!!

Fuck these greedy assholes.
Not enough bad things can happen to them.
And not enough bad things will.

Posted by: c u n d gulag on April 22, 2011 at 4:29 PM | PERMALINK

i want to raise the debt floor. why is no one considering this!

Posted by: glutz78 on April 22, 2011 at 4:32 PM | PERMALINK

Raise the debt floor? No way!

We should lower the debt floor. And maybe push out the debt walls and add a debt porch.

Posted by: DK on April 22, 2011 at 5:27 PM | PERMALINK

[...]super-brackets for very high incomes, elimination of deductions, taxation of capital income as ordinary income, and — the part that would be most controversial — raising the cap on payroll taxes. -- Krugman's description of Grijalva/Ellison budget

"Funny"... That's *exactly*, point-by-point, what I'd like to see, too. Yet, I consider myself a "moderate", not a "leftie".

Posted by: exlibra on April 22, 2011 at 7:07 PM | PERMALINK

The CPC plan is eminently sensible. But how does it become law unless the Democrats, minus the so-called 'moderates', gain super-majorities and retain the White House. It's worth campaigning for but is it possible?

Posted by: Goldilocks on April 23, 2011 at 6:06 AM | PERMALINK
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