BUDGET BATTLES IN CONGRESS

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By Miriam Raftery

April 22, 2014 (San Diego's East County) - Three competing budgets have been proposed in Congress-one by House Republicans, another by President Obama, and a third by the House Congressional Progressive Caucus.

All aim to balance the budget over time. The Republican plan focuses on cuts to social services and tax breaks to businesses and wealthier Americans in line with the trickle-down economic theory. The President and progressive budgets focus on raising revenues to closing tax loopholes for corporations and the rich, providing more help to middle class and low-income taxpayers under a rising tide floats all boats strategy.

But how do these three budgets stack up compared to what polls show most Americans want Congress to do?

A poll by the Pew Research Center found three-fourths of all Americans surveyed say improving the job situation is a key issue.  President Obama proposes to spend $143 billion over the next 10 years on job creation programs, from infrastructure repair to tax credits for small businesses that hire more workers.  The House Congressional Progressive Caucus would spend even more on job creation - $1.3 trillion, including aid to all 50 states.  The House Republican budget proposed by Representative Paul Ryan, however, would spend zero on direct job creation, assuming that giving tax breaks to companies would lead to more hiring.

A Kaiser Health poll found 74% of people surveyed favor the expansion of Medicaid under the Affordable Care Act.  Obama’s budget would maintain that.  The Progressive budget would increase it, while the Republican budget would make deep cuts to Medicaid, repeal the recent Medicaid expansion, and shift control to the states.

Republicans also want to make deep cuts to food stamps, or SNAP as the program is now called.  The President would keep food stamp funding at its current level. Progressives want to increase food stamp benefits to the levels they were at before recent cuts were imposed.  Nearly a quarter of all American families struggled to afford food in the past year and 74% oppose cuts in food stamps, according to a Hart Research Associates poll for the Food Research and Action Center.

Most Americans – 69% - say improving education should be a top priority.  Republicans would cut spending on education and also freeze Pell grant awards for ten years.  Obama would boost spending over a decade on programs like Race to the Top and Preschool for All.  Progressives would invest in teachers and K-12 schools, also providing more flexibility on how funds are used.

As for Social Security, 66% of American want Congress and the President to keep the system sound.  The President wants to trim costs by preventing recipients of Social Security Disability Insurance from also collecting unemployment benefits at the same time—something House Republicans also want to do, but they also want the President and Congress to come up with a plan for the long-term.  Progressives had no significant proposals regarding Social Security.

Among the most significant differences are in approaches to Medicare, a system that 61% of Americans want to see stay sound.  House Progressives propose negotiating for lower prescription drug prices, saving over $150 million in a decade.  The President wants to raise premiums on the wealthiest retirees. House Republicans want to raise the age of eligibility for Medicaid, and give seniors the option of getting a lump sum of money to buy private insurance instead of Medicaid benefits.  There’s a problem with this approach, though; according to National Priorities, the lump sums would not keep pace with the rising cost of health insurance.

Over two-thirds of all Americans want a budget to close corporate tax loopholes and limit tax breaks for the wealthy, according to a survey by Americans for Tax Fairness.  Republican say the want to close tax loopholes—but haven’t yet said which ones.  Obama wants to raise $651 billion in revenues by limiting tax deductions on billionaires and millionaires and bring in another $13.8 billion by reducing tax breaks for corporations and hedge fund managers.  The Progressive Caucus would limit deductions on corporate jets, entertainment and other perks, also eliminating deductions for yachts and expensive vacation homes.

Progressives would withdraw troops from Afghanistan, while Republicans and the President would both leave a “placeholder” for Afghanistan war funding at the same level as today.  Progressives would also cut military spending overall by $255 billion in 10 years. The President and Republicans both want to prevent sequestration cuts from affecting the military.  Republicans and the President also propose some increases in military spending, despite the fact that 58% of Americans  in a Stimson poll said they hope to see substantial cuts in military spending.

Many polls—including Gallup, Pew Research, and others –found Americans would rather see higher taxes than cuts in education funding or certain other domestic programs. The President and Progressives want to protect education and other domestic programs from sequestration cuts, which Republicans want to allow sequestration to cut domestic programs by as much as 20% in order to help balance the budget faster.

A Gallup Poll found 66% of Americans think corporations don’t pay enough in taxes.  But Republicans want to lower corporate tax rates even more, from 35% to 25% and also reduce or even eliminate taxes on  American corporations’ profits overseas.  President Obama wants to eliminate tax breaks for oil and gas companies, and tighten rules on overseas profits.  The Progressive Caucus would tax financial transactions such as stock sales to raise  almost a trillion dollars, over the next ten years – and bring in another $620 billion by stopping U.S. companies from dodging taxes overseas.

Finally, a Gallup poll found that 61% of Americans believe the wealthiest Americans don’t pay enough in taxes.  The President wants to impose the Warren Buffet rule – a minimum tax on millionaires and billionaires.  To help poorer Americans, he also wants to expand the earned income tax credit for many workers. Progressives want to end the Bush-era tax cuts for those earning over a quarter of a million dollars a year. They also propose new tax brackets for people earning over a million dollars, as well as closing tax breaks for investors. Republicans, meanwhile, want to do just the opposite – sharply cutting tax rates to just 10 to 25% of their income for the wealthiest Americans, or as Republicans call them, job creators. Critics contend that this would reduce revenues to the federal government that are needed for other programs.

 

 


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