"Rep. Schakowsky’s Deficit Reduction Plan Needs To Be Taken Seriously"
Last week, the co-chairs of President Obama’s debt commission — former Sen. Alan Simpson and former White House Chief of Staff Erskine Bowles — released their proposal for balancing the nation’s budget. While the plan contained some good ideas (like cutting agriculture subsidies), it also included some profoundly bad ones, like raising the retirement age for Social Security and implementing seemingly arbitrary caps on government revenue. Plus, the plan called for draconian cuts to popular and vital services, as it laid out about one dollar in non-defense discretionary cuts for every dollar in defense cuts.
At its core, the plan tilts toward the conservative budget solution, relying on spending cuts for 75 percent of its total deficit reduction. But today, Rep. Jan Schakowsky (D-IL), who also serves on the debt commission, laid out an alternative proposal, saying that the Bowles-Simpson proposal “would have serious consequences for lower and middle class Americans, and that is why I cannot support it.” “I am releasing my own plan today because I believe that there is a better way to achieve our goal – one that protects the poor and the middle-class,” she added.
Schakowsky’s plan gets the budget into balance by:
– Cutting $110.7 billion from the defense budget (compared to $100 billion in the Bowles-Simpson plan).
– Cutting $8.5 billion in non-defense discretionary spending (compared to $100 billion in the Bowles-Simpson plan).
– Cutting farm subsidies by $7.5 billion (compared to $3 billion in the Bowles-Simpson plan).
– Implementing health care reforms saving $17 billion (including a public option).
– Raising corporate taxes by about $132 billion.
– Raising $92.6 billion in personal taxes by equalizing the treatment of investment income and regular income and implementing Sen. Bernie Sanders’ (I-VT) progressive estate tax.
– Raising $52 billion by implementing a cap and trade system.
This is a serious proposal, and should be given as much consideration as the Bowles-Simpson proposal and the proposal reportedly dropping tomorrow from Alice Rivlin, another commission member. Contrary to the Bowles-Simpson approach (and that advocated by most Republican members of Congress), Schakowsky has shown that it is feasible to balance the budget without blowing a huge hole in discretionary spending and she does it while also taking into account the threat of climate change (and the revenue that cap-and-trade can generate).
She also refuses to forego economic growth for austerity in the short-term, dedicating $200 billion over the next two years to job creation and bolstering the social safety net, while still hitting the commission’s deficit reduction target in 2015.
Of course, there is no way that Republicans on the debt commission will embrace this proposal, as they’ve already explicitly ruled any tax increase “off the table.” (Which Schakowsky herself predicted they would back in June.) But she’s shown that there is a way to balance the budget while simultaneously protecting the middle class and making important investments, and she should be commended.