CHART: As Services For Main Street Are Gutted, Richest Pay Lowest Taxes In A Generation

Last night President Obama and congressional negotiators cut a deal to keep the government running, cutting “$38.5 billion under current funding levels, per Republican demands,” and $78 billion below what Obama called for in his initial 2011 budget.

Yet as Republicans and Democrats continue to battle over the deficit within a political framing that includes taking aim at Pell Grants for low-income students — which Obama preemptively proposed to cut, calling summer grants “too expensive,” while Republicans want far deeper cuts than that — Head Start funding, and other programs from Main Street Americans, there is one group of Americans that seems to be getting away without having any sacrifices demanded of them: the very richest.
As this chart from from Wealth for the Common Good shows, the top 400 taxpayers — who have more wealth than half of all Americans combined — are paying lower taxes than they have in a generation, as their tax responsibilities have slowly collapsed since the New Deal era as working families have been asked to pay more and more:


There have been a handful of proposals by congressional progressives to once again put requiring more sacrifice from the luckiest among us back on the table. The Congressional Progressive Caucus recently unveiled a “People’s Budget” that would boost taxes on the wealthiest Americans, returning them to levels closer to where they were under Ronald Reagan’s first term — hardly socialism.
Yet these proposals have yet to gain steam, and the budget debate in Washington appears to revolve completely around cutting spending for Main Street Americans who’ve already been asked to pay too much during the recession. That’s why there’s a Main Street Movement demanding fair sacrifice and standing up for the great American middle class. Whether it succeeds may determine the fate of most hard-working Americans for a generation to come.

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.

Why unions are out of touch with reality (and republicans are corrupt)

The public-sector union showdowns in Wisconsin and Ohio are proceeding as if it was the 1950s. Democrats and liberals call labor oppressed, and want the unions to win; Republicans and conservatives call labor a threat, and want unions broken. That’s the wrong way to think about the entire situation.

Labor unions and collective bargaining are important tools. There are good reasons to form unions. But unions must be reasonable. If the customer is not happy with a union’s performance, or if the cost of doing business becomes too high — whether the customer is the state of Wisconsin or otherwise — then unions must make reasonable compromises.

Collective bargaining is, after all, about negotiation.

The federal spending controversy

With another federal spending controversy brewing on Capitol Hill, recall that in his 2010 State of the Union Address, President Barack Obama said, “We’ve already identified $20 billion in savings for next year.” Now it’s next year — so what happened to the $20 billion in savings? Let’s follow the bouncing budget cut.

The “$20 billion” promise was not the sort of empty verbiage that dominates the federal spending debate. How many times have you heard a politician thunder about cutting spending but not cite even one specific reduction he or she supports? A year ago, the Office of Management and Budget laid out Obama’s proposed cuts in specific detail.

Republicans: listening to the people, cutting spending (except when polls show otherwise)

Republican Lawmakers Call for Deeper Spending Cuts

A prominent Republican congressional group is urging party leaders to impose far greater non-military spending cuts than already proposed. On Thursday, the far-right Republican Study Committee called for an immediate cut of $100 billion from non-military programs. According to theWashington Post, meeting the demand would entail reducing funding for most federal agencies by one-third over the next seven months. The Study Committee also says the government should make even deeper non-military cuts of $2.5 trillion over the next decade. According to the Center on Budget and Policy Priorities, that would mean cutting funding for most government agencies by 40 percent. With 165 members, the Study Committee represents over two-thirds of House Republicans.

Poll: Majority Support Cutting Military Spending over Medicare, Social Security

The House spending cut proposal comes as a new poll shows a large majority of Americans favor cutting the military budget over cutting Medicare or Social Security. The New York Times-CBS News survey also found that nearly two-thirds of Americans would prefer higher payroll taxes instead of reduced benefits in either of the two programs.

Deficits: Real Issue, Phony Debates

Deficits have now risen, yet again, to headline status. Conservatives inside and to the right of the Republican Party frame the national debates by attacking deficits. They want to reduce them by cutting government spending. Liberals respond, as usual, by insisting that overcoming the crisis requires big government spending (“stimulus”) and hence big deficits. Most Americans watch the politicians' conflicts with mixtures of confusion, disinterest, and disdain. Yet deficits pose a real issue for everyone, one that the debates among politicians and their economist advisors miss, ignore, or hide.

When the federal government raises less in taxes and other revenues than it spends, it must borrow the difference. Such annual borrowing is each year's deficit. The U.S. Treasury borrows that money by selling bonds, federal IOUs, to the lenders. The accumulation of annual deficits comprises the national debt, the total of outstanding U.S. treasury bonds. So the first and simplest questions about deficits are (1) why does the federal government choose to borrow rather than to raise taxes? and (2) why does it borrow rather than cut its expenditures? The twin answers are profoundly political. Elected officials are afraid to raise taxes on business and the rich because their profits and great personal wealth can then finance the defeat of officials who do that. Cutting government spending that benefits business and the rich is avoided for the same reason. As the tax burden shifted increasingly onto middle- and lower-income people in recent decades, elected officials have faced rising tax revolts coupled with demands for more government services and supports.

Is The New GOP ‘Pledge’ A Way To Bring Ryan’s Radical Budget Plans In Through The Backdoor?

Today, House Republicans released their “Pledge to America,” a document styled after 1994’s Contract with America that the GOP claims is “an outline of the party’s targetsin the final weeks of the legislative session.” We’ve already explained how the Pledge promises to repeal and replace the Affordable Care Act with portions of the Affordable Care Act and how it represents a blood oath to Big Oil, so let’s turn to another aspect: its effect on the deficit.

Of course, the Pledge includes a promise to extend all of the Bush tax cuts — including those for the richest two percent of Americans — for a total price tag of $4 trillion over the next decade, while laying out spending cuts that, even if the numbers are taken at face value, don’t come close to covering that cost. ABC’s George Stephanopoulos asked Rep. Paul Ryan (R-WI) — the ranking member of the House Budget Committee — to explain how the GOP can square its desire for huge, regressive tax cuts with its supposed commitment to deficit reduction: