Home Budget, Economy Open Letter to the Super-Committee

Open Letter to the Super-Committee

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Dear Super-Committee Members:

Because as members of Congress you believe undoubtedly in “justice for all” Americans, because shared sacrifice is inseparable from a just America, and because the wealthiest 2% have not been called upon to sacrifice for their country, whereas the rest of America have already been made to by an unfair tax system and by continual favoritism to the nation’s economic elites, a principled super-committee that values justice and fair-play will do the following to HELP PAY DOWN THE DEFICIT:  

1. Support raising taxes on the wealthiest 2% at least to the top rate that existed during the Clinton years when the nation’s economy was better than ever.

2. Support a 0.1% tax on all trades of stocks and bonds, and a 0.01% tax on all trades in derivatives.

3. Support raising the taxes on hedge fund managers to the same rate as payroll taxes for wage and salaried employees throughout America..

4. Support removal of the cap ($106,800) for payment of Social Security taxes.  

5. Support a titanium-clad restriction that all the revenue derived from implementing the four preceding proposals must go to deficit reduction-NOT to any new spending on favors for major corporations and the wealthy and NOT to an already bloated and wasteful budget for the military industrial complex.  (President Eisenhower was right about the threat that an ever-expanding military industrial complex presents to our freedom and economic security.)

Social Security and Medicare:

With implementation of the preceding five proposals, Social Security and Medicare can be not only preserved but also modestly enhanced.  For the following reasons, these programs, which are essential to maintaining America’s economy and its middle-class, should not be cut:

• Social Security has not added one penny to the deficit.  Instead, unwilling to pay for two wars, for an out-of-control Pentagon budget, for a plethora of subsidies to corporations, for huge tax cuts to the wealthiest Americans, etc., etc.  CONGRESS HAS BORROWED HEAVILY FROM THE SOCIAL SECURITY TRUST FUND and DOES NOT WANT TO PAY THE MONEY BACK.  By any definition, legal and moral, that is THEFT.

• Social Security is a BENEFIT EARNED by people working hard and paying SS taxes; it is a CONTRACT for the economic security of elderly Americans.

• Likewise, Medicare is for the HEALTH SECURITY of elderly Americans-security that private insurance provides far less predictably and far more expensively.  Because the elderly no longer have earning power, increases in the cost of Medicare place at risk their economic and health security.  (Just as each super-committee member has secure health-care provided by tax dollars, so should all Americans, who pay those dollars as well as your salary.)

The Real Causes of the Deficit:

It is the height of injustice to blame Social Security and Medicare for our country’s budgetary situation.  The situation results, in fact, from failures of leadership by our political and corporate elites.  They and their policies and practices have brought us the following ills, which by causing our present and future budgetary plight undermine our national security far more than any foreign powers do:

• Overall mismanagement and financialization of the U.S. economy by political and corporate elites.  (For example, the repeal of the Glass-Steagall Act has been a disaster and will continue to be until the act is restored.  Commercial and investment banks should never have been married.  The so-called lack of confidence in the business community has not been caused by government-except for its excessive deregulation of the banking, mortgage, and “investment” industries, which have exploited deregulation and thereby tanked themselves and the American and world economies into insolvency.)

• The Bush tax cuts, especially for the wealthiest Americans, whose record of job-creation during his administration was anemic-a mere .45 percent increase on average each year  (In contrast, during the Clinton administrations, when taxes on the richest Americans were higher, the average increase in the number of jobs each year was 1.6 percent.  And during the 1950s, when taxes on corporations and the wealthy were among the highest in our history, jobs were abundant, well-paying, and secure.)

• The Bush recession, which was caused mostly by excessive de-regulation and by reckless elites in the banking and investment industries.

• Two costly and destructive wars financed on credit instead of responsibly through taxes-especially taxes on those who benefit most from those wars.

• Excessive long-term military spending, which undermines our economic and national security (just as it did the defunct USSR’s) and creates far fewer jobs than investments do in our infrastructure, transportation systems, alternative technologies for energy, etc.

• Tax loopholes, subsidies, off-shore accounts, etc., etc., for wealthy corporations and individuals, who do not need them.

Between our elites and middle-class Americans, it is the former who bear far more responsibility for the budgetary and economic messes that afflict our country.  Blaming the middle-class, the poor, and the programs that provide them some security is GROTESQUELY UNFAIR, MORALLY INDEFENSIBLE, ECONOMICALLY DESTRUCTIVE, AND POLITICALLY SUICIDAL.

There can be no national security unless there is economic and health security for the 99%.

  • independent in arlington

    It appears as though you believe that the only spending cuts necessary are to military spending.  Is my understanding of your position right?  If so, what types of military spending cuts do you envision?  Smaller numbers of troops? Our military is at its smallest size since before the Korean war. Less modernization?  Some of our military aircraft were first built in the 1950’s. I’m not saying that military spending cannot be cut at all, but merely noting that it seems like you are asking for a lot out of one part of the federal budget.

    Also, you indicate that the cap for payment of Social Security taxes should be removed.  As you know, this means an increase in taxes of more than 12% on income in excess of the current cap.  That’s a pretty steep increase.  Would that also mean that the people paying those higher Social Security taxes would also be entitled to higher benefits on the back end?  

  • aznew

    I don’t agree with all the solutions proposed here, but the proper course for Democrats over the next week is easy as can be: simply do not agree to a bad deal.

    If the Democrats do nothing, two things will happen:

    1. The automatic triggers will go into effect; and

    2. The Bush tax cuts will expire.

    The combination of these two things is actually an acceptable, if only fair, policy solution to the deficit problem, and in actuality a fairly good political solution to much of the gridlock that has paralyzed government.

    Compared to the debt ceiling crisis of the summer, when the GOP held the better hand and all Obama could do was bluff, thanks to the automatic triggers and the automatic expiration of the Bush tax cuts, the Democrats arguably have the better cards this go round.

    It remains to be seen whether Obama, Reid, Schumer, et al., have the nerve to play them.

  • Elaine in Roanoke

    Social Security, as you say, is not a cause of the deficit not should it be part of the solution. The future imbalance in Social Security can be solved by raising the top limit for collecting SS taxes (at least for the individual at a time when any rise in American labor costs for business will drive even more jobs to low-wage countries) and rethinking the way the cost of living increases are figured for Social Security.

    As President Obama and many leading economists have stated, the entitlement programs that are causing deficits are Medicare and Medicaid. We must also remember that 20-25% of Medicaid spending is for the end of life when seniors have exhausted all their money and the government picks up the tab for nursing home care. The whittling down of Medicare/Medicaid spending by lowering reimbursement for providers has a limit, which has probably already been reached. Some revenue can be added by means testing the Medicare premium, but that alone won’t solve the whole problem. Someone has to come up with a better system than the fee for service system we now have that is an incentive for doctors, etc., to order the maximum number of things that they can.

    Democrats should have stressed to voters that the Medicare imbalance was made far worse by the Bush administration and Congress passing a prescription drug benefit without finding revenue to pay for it. Also, President Obama has said over and over that Medicare Advantage plans cost the government far more (about 18%) than regular Medicare.