DownWithTyranny!: Shared Sacrifice

The middle class and the working class have sacrificed and sacrificed and sacrificed... up the wazoo. We paid when the greed-driven banksters drove the economy off the cliff and demanded mammoth bailouts-- or else. So shared sacrifice means, or should mean, it's time for the rich and privileged to pay their fair share. But their politicians protect them. Our politicians don't protect us. The GOP would rather let the good faith and credit of the United States government disintegrate than rescind the unsustainable Bush tax cuts-- or should we now face reality and call them the Bush/Obama tax cuts?

There were two important developments Tuesday, both bad. Washington's always problematic Gang problem reared its head as the Conservative Consensus rushed in to take control of the situation. And tthis transpartisan conservative stunt almost looked reasonable-- I suppose that was the idea-- as the House Republicans passed their ridiculous latest gimmick to pass Ryan's kill-Medicare budget, this time on steroids and this time called Cut, Cap & Balance.

Let's start with the Gang problem. Dean Baker, co-director of the Center for Economic and Policy Research got right to the heart of the matter:

The budget plan produced by the Senate’s “Gang of Six” offers the promise of huge tax breaks for some of the wealthiest people in the country, while lowering Social Security benefits for retirees and the disabled. Despite claiming that they will "reform" Social Security on a "separate track, isolated from deficit reduction," the plan includes cuts to Social Security that would be felt in less than six months, as the plan calls for a new inflation formula that will reduce benefits by 0.3 percentage points a year compared with currently scheduled benefits. The plan also calls for a process that is likely to reduce benefits further for future retirees.

The proposed cuts to Social Security are cumulative. This means that after ten years, a beneficiary in her 70s will see a cut of close to 3 percent. After 20 years, the cuts for beneficiaries in their 80s will be close to 6 percent, while the reduction in annual benefits will be close to 9 percent by the time beneficiaries are in their 90s. For a beneficiary in her 90s living on a Social Security income of $15,000, this means a loss of more $1,200 a year in benefits.

The plan also calls for large cuts in tax rates including a targeted top rate of between 23-29 percent, which will be at least partially offset by elimination of tax deductions. For the highest-income people, this is likely to mean a very large reduction in taxes. For example, Jamie Dimon and Lloyd Blankfein, the CEOs of J.P. Morgan and Goldman Sachs, respectively, are both paid close to $20 million a year at present. If this pay is taxed as ordinary income, then they would be paying close to $7.5 million a year in taxes on it after 2012. However, if the top rate is set at 29 percent, they may save as much as $1.9 million a year on their tax bill. If the top tax rate is set at 23 percent then the Gang of Six plan may increase their after-tax income by more than $3 million a year.

It is striking that the Gang of Six chose to respond to the crisis created by the collapse of the housing bubble by developing a plan that will give even more money to top Wall Street executives andtraders. By contrast, the European Union is considering imposing financial speculation taxes to reduce the power of the financial industry and raise more than $40 billion a year in revenue.

"The plan calls for substantial cuts elsewhere in the budget which are likely to cut into the incomes of large segments of the population, especially the sick and the elderly. The cuts it proposes to the
military are just over 1.0 percent of projected spending over the next decade.

In short, this is a plan that should be expected to please the wealthy since it will mean large reductions in their tax liability in the decades ahead. On the other hand, most of the rest of the country is likely to feel the effects of lower Social Security, Medicare and Medicaid benefits, in addition to other cuts that are not yet fully specified.

Baker's an economist-- a real one, not like the corporate shills Wall Street provides all our presidents for their economic teams. And Bernie Sanders (I-VT) isn't the kind of politician Wall Street gets behind either. Funny, his perspective Tuesday was very similar to Baker's.

While all of the details from the so-called Gang of Six proposals are not yet clear, what is apparent is that the plan would result in devastating cuts to Social Security, Medicare, Medicaid and many other programs that are of vital importance to working families in this country. Meanwhile, tax rates would be lowered for the wealthiest people and the largest, most profitable corporations.

This is an approach that should be rejected by the American people. At a time when the rich are becoming richer and corporate profits are soaring, at least half of any deficit-reduction package must come from upper income people and profitable corporations. We must also take a hard look at military spending, which has tripled since 1997.

So while Obama seems to be begging CEOs to donate-- in lieu of their refusal to pay their fair share of taxes-- to the public schools that their greed is destroying, the Party of Greed and Selfishness was passing their Cut, Cap & Balance stunt 234-190, almost every single Republican and five disgusting Blue Dogs-- Boren (OK), McIntyre (NC), Matheson (UT), Cooper (TN) and Shuler (NC)-- voting to screw ordinary working families on behalf of their rich campaign donors once again. Real Democrats voted against it... even the just sworn in conservative Janice Hahn. Congressional Progressive Caucus co-chair Raúl Grijalva (D-AZ) stripped GOP intentions bare:

“This terrible plan could cut Medicare and Medicaid to unsustainably low levels and put seniors’ well-being at risk. Anyone who wants to pass it through Congress should remember that more than 70 House Democrats have already pledged their opposition, and more are signing on every day. The letter we sent to Leader Pelosi July 8 vowing to oppose any cuts to Social Security, Medicare or Medicaid as part of these budget negotiations has become a growing wave of House resolve to protect these programs. We’re keeping it open for more signatures, and our Gang of 70-plus has the ‘Gang of Six’ completely outnumbered. Newly minted Rep. Janice Hahn signed on as one of her first official acts as a Congresswoman-- that’s how quickly it’s picking up momentum.

"Republicans have already said they won’t vote for any package, period, because of their opposition to a functional economy. House Democrats hold the key to whatever plan can pass Congress. That’s why the Senate ‘Gang of Six’ proposal is dead on arrival. Instead of toying with ways to slash vital programs in just such a way as to make different budget numbers align on paper, Congress and the White House should follow the path of our People’s Budget: creating jobs, protecting Social Security, Medicare and Medicaid, ending corporate subsidies and millionaire tax giveaways, and ensuring our economy works for everyone rather than a greedy few.”