EMACIATING MAIN STREET, ENRICHING THE RICH:

   Conservatives in Congress and the right-wing intelligentsia have unleashed a flurry of deficit reduction plans in recent months, which both continue to enrich the wealthy with massive tax cuts and which take aim at programs and investments for Main Street -- solutions that were tried under the previous president and failed. In House Republicans' much-touted budget resolution, H.R. 1, some of which made it into the recent budget deal to keep the government open, they dramatically cut Pell Grants, Head Start, foreign aid to children suffering from malaria, and other programs that benefit ordinary p eople, but are in no way the cause of our modern deficits. House Budget Committee Chairman Paul Ryan (R-WI) upped the ante when he released his FY2012 budget, which continues to call for   massive and crippling cuts to the Pell Grant program, slash the Food Stamp program by $127 billion over ten years, effectively privatize Medicare, and likely increase taxes on the middle cl ass while dramatically cutting them for the rich and corporations, actually making taxes on the rich lower than at any other time since Herbert Hoover's presidency. At the end of the day, Ryan's budget would leave the safety net in tatters, investments in Main Street severely under-funded, and would have seniors  paying the majority of their income for health care, destroying the promise of Medicare -- a system that Americans actually want expanded, not crippled. And while these conservatives are quick to ask Main Street to pay for debt that it did not primarily cause, they have no problem exempting some of the nation's biggest dirty energy corporations from fair sacrifice. Last month, House Republicans effectively said "so be it," as they voted in lockstep to protect billions of dollars in corporate welfare for Big Oil.

EXPLAINING THE DEBT:

To understand the most responsible way to tackle our long-term deficit problem, it's important to first understand exactly what the challenge of the debt is and what caused it. Interest rates and inflation are currently low, and addressing unemployment is a   far more pressing immediate problem. A March 2010 CBS News poll found that 51 percent of Americans said that jobs/economy is the most important problem facing the country, and only seven percent said the deficit was. Still, we should address the $14.2 trillion debt and the $1.3 trillion budget deficit over time, as doing so is crucial to our long-term economic health. In the short-term, there are a handful of major factors driving our debt. This  includes the cost of two wars, a runaway defense budget, the Bush tax cuts for the wealthiest Americans, taxes on the richest Americans being the lowest in a generation, and a recession caused by the lack of regulation of Wall Street. The greatest long-term driver of our debt is health care costs, with our "possibly most inefficient" system in the world having us spend more than any other country in the world on health care with worse results. Thus, long-term deficit reduction plans that do not seriously deal with these causes of the current debt are avoiding the key issue.

Deficit Reduction:

Today, President Obama will deliver a   wide-ranging speech laying out a strategy to deal with the U.S. budget deficit. Although the exact policies that he will endorse are unknown, he is expected to lay out a vision that will alter the country's entitlement programs and call for high-income earners to pay more taxes. In addressing the U.S. debt, Obama is entering an increasingly heated debate about how to address our long-term deficits in a way that does not shoulder Main Street Americans with undue burdens or hinder job growth. On one side, conservatives are proposing cruel plans that would sacrifice the services and investments in America's great middle class while asking nothing more from the wealthiest among us. On the other side, a growing number of progressives are demanding fair sacrifice that protects our crucial needs while demanding fair sacrific e from those who are richer than ever. The path that we choose will determine the very kind of country we will have in the future: one where only the wealthiest among us have opportunities or one that enshrines the American Dream -- the idea that anyone, no matter what their background, can work hard and succeed.

REPORT: U.S. Military Spending Has Almost Doubled Since 2001

A new report released today by SIPRI, a Swedish-based think tank, reveals that U.S. military spending has almost doubled since 2001. The U.S. spent an astounding $698 billion on the military last year, an 81% increase over the last decade.

U.S. spending on the military last year far exceeded any other country. We spent six times more than China — the second largest spender. Overall, the world expended $1.6 trillion on the military, with the United States accounting for the lion’s share:


As a percentage of GDP, U.S. military spending has increased from 3.1% in 2001 to 4.8% last year.
The report notes that, “even in the face of efforts to bring down the soaring US budget deficit, military spending continues to receive privileged treatment.” Indeed, House Speaker John Boehner (R-OH) and others on the right are passing legislation increasing defense spending. At the same time, they are insisting on massive cuts to social programs that provide vital assistance to the elderly, the poor and the middle class.

Unemployment Deficit and stupid republicans

Obama Chides Republicans on Unemployment Deadlock
Goodwin’s entry to the Senate could mark a significant boost for efforts to extend unemployment benefits to over two million jobless Americans. Republicans, as well as Democrats, have opposed approving the benefits, citing concerns over the deficit. In his weekly radio address, President Obama singled out Republican opposition.

President Obama: "They say we shouldn’t provide unemployment insurance because it costs money. So after years of championing policies that turned a record surplus into a massive deficit, including a tax cut for the wealthiest Americans, they’ve finally decided to make their stand on the backs of the unemployed. They’ve got no problem spending money on tax breaks for folks at the top who don’t need them and didn’t even ask for them, but they object to helping folks laid off in this recession who really do need help."

LOOKING OUT FOR WALL STREET:

"To appease these Republicans, the conference committee yesterday agreed to eliminate the bank tax and "bring an early end to the Troubled Asset Relief Program," which would free up about $11 billion to pay for the bill. Every single Republican on the committee voted against this measure, instead opting to add to the deficit and put taxpayers on the hook for the legislation" 

On Friday, the conference committee reconciling the House and Senate versions of financial regulatory reform legislation approved final language (along a party-line vote) after a marathon 20-hour negotiating session. Lawmakers made a flurry of changes, including the addition of an exemption to the Volcker rule -- a ban on banks trading for their own benefit with federally insured dollars -- added at the behest of Sen. Scott Brown (R-MA), and a weakening of Sen. Blanche Lincoln's (D-AR) provision requiring banks to spin-off their derivatives trading desks. However, the final bill retained Lincoln's language requiring exchanges and clearinghouses for derivatives, as well as a provision that compels banks to hold more capital against losses. Unfortunately, Republicans decided they were not yet done making changes. Yesterday, negotiators had to briefly reopen conference proceedings "after Senate Republicans who had supported an earlier version of the measure threatened to block final approval unless Democrats removed a proposed tax on big banks and hedge funds." Maine GOP Sens. Susan Collins and Olympia Snowe had announced that they would be joining Brown -- whose campaign received heavy support from Wall Street -- in voting against the reform bill because it imposes a $19 billion fee on the biggest financial firms to cover the cost of the law's implementation. But as Mother Jones' Kevin Drum noted, the bank fee is "not there to punish banks or to create a slush fund for new spending. It's there solely to make the bill deficit neutral." Rep. Barney Frank (D-MA) challenged the Republican hold-outs to find some other way to pay for the bill. "Do they want to add to the deficit?" he asked, calling these peacocks out on their deficit hypocrisy. "Is there another way? What's their other way?" To appease these Republicans, the conference committee yesterday agreed to eliminate the bank tax and "bring an early end to the Troubled Asset Relief Program," which would free up about $11 billion to pay for the bill. Every single Republican on the committee voted against this measure, instead opting to add to the deficit and put taxpayers on the hook for the legislation.