Yesterday, I wrote about the monumentally crazy letter co-signed by 60 House DEMOCRATS, who, by adding their names to the letter, in my view, were embracing austerity, cuts in Medicare and a de-funding of basic government services. One of the signers of the letter, Rep. Peter DeFazio (D-OR), responded to my post. So, in fairness, I want to give his position a complete, full airing. The bottom line is: we still have a troubling picture of Democrats engaging in a phony debate about the mythical debt and deficit "crisis"--a debate which is endangering the lives of tens of millions of people and the country we know.
Rep. DeFazio's press secretary sent this message. I am printing it in full:
Hi Mr. Tasini-
Rep. DeFazio read your column about the “Stupendously Stupid Sixty”. Wanted you to have the following statement. Thanks.
“I believe we can reach that $4 trillion goal with a mixture of smart spending cuts and revenue increases. However, I do not support getting there by cutting benefits for Americans who receive Social Security or Medicare. Privatizing either of these programs is not an acceptable solution either. Social Security did not cause one penny of the deficit. The Social Security Actuaries estimate that Social Security trust fund will be able to pay full benefits until 2037. After 2037, it will still be able to pay out 73-75% of benefits. We can guarantee Social Security’s long-term solvency simply by asking all Americans to pay the same percent of their income into Social Security. Currently Americans pay no Social Security taxes on income over $106,800. In February I introduced H.R. 797 which would close a tax loophole for those earning $250,000 a year and ensure Social Security’s stability for 75 years. If we want to fix Medicare, we must start by reversing the Big Pharma bailout in Medicare Part D which has cost taxpayers over a half a trillion dollars. We need to return to the Clinton-era tax rates, end big corporate tax loopholes and subsidies, assess a .03% Wall Street speculation tax, and pull our troops from Afghanistan. These measures alone would exceed the goal set in the letter.“
I was, in fact, surprised to see DeFazio's name on the letter because he has been pretty good on many economic issues. Let me start with all the positives.
1. He is correct about Social Security not causing one penny of the deficit. NOT ONE. It would be nice if he could get all his fellow Party members to understand that and get the idiots in the traditional media to stop repeating these lies (just yesterday the always doltish Wolf Blitzer repeated this lie). But, it wouldn't be fair to leave him with this assignment--it would be a 24/7 task.
2. He deserves kudos for introducing H.R. 797. As many of you know, per the Congressman's point above, millionaires do not pay Social Security taxes on incomes above $106,800. Putting aside for a moment that many of the richest in the country derive most of their annual wealth from investment income not wages, it would be a great thing if H.R. 797 passed.
As more and more Americans voice concerns about the reckless actions of the financial sector that pushed the banking sector to the brink of collapse, Senator Tom Harkin and Representative Peter DeFazio have introduced a proposal that would impose a small tax on financial transactions. This tax would raise tens of billions of dollars a year while reining in dangerous speculative trading.
The Harkin-DeFazio proposal calls for the implementation of a modest 0.03 percent financial transactions tax (FTT) on the trading of stocks, futures, bonds, and credit default swaps. This would have a minimal effect on individual 401(k) or mutual funds, however, it would impose substantial costs on those who are engaged in short-term trading strategies that can lead to disruptions in markets, such as last spring’s flash crash. This tax would have no effect on ATM withdrawals, short term revolving loans, or other everyday financial transactions.
4. He is absolutely correct that the budget challenges--not CRISIS--that we face would easily be taken care of with a variety of steps, including cutting corporate welfare ($2 trillion just there), imposing the financial transactions tax and ending immoral foreign wars (not to mention the point that we would have trillions of dollars to spend had we not been mired in the Bush-Obama wars/occupations in Iraq and Afghanistan).
Before getting to the biggest problem with the Congressman's statement, scratch your head please by the plea to return to the Clinton-era tax rates. Respectfully, that is not a serious proposal to right the inequality in income distribution in America. The top Clinton-era rate was 39.6 percent. That is pathetically too low.
We could—and should—easily raise the two top rates higher, with the top rate for the richest 1 percent set at least at 50 percent. From 1951-1964, the post-war era, which America’s leaders and pundits like to point to as the beginning of a great boom and growth in the country, the top rate was 91% for married couples making $200,000 and up.
But, the biggest problem with the Congressman's point is his first observation:
“I believe we can reach that $4 trillion goal with a mixture of smart spending cuts and revenue increases."
No. No. No.
As I said yesterday, by engaging even in the discussion with the Catfood Commission II (for tactical or other entirely futile reasons) that there needs to be "shared sacrifice" based on entitlement cuts and taxes, or even in the way the Congressman words it ("smart spending cuts and revenue increases"), we are losing the debate because you buy into the phony argument that there is a debt and deficit "crisis".
A Democratic Party--can I say a Wellstone Democratic Party--would fight the entire framing that there is a debt or deficit "crisis". What we need is a DEMOCRATIC PARTY and DEMOCRATIC leaders taking the floor of the House or Senate, or traveling the country, arguing that the entire debt and deficit "crisis" is phony. Rather than increase the frame of this debate in the public's mind, the Congressman, and his colleagues who have the moral compass and the spine, should be on the House floor every day saying, "this is a myth" and we should drop this debate and focus on the jobs crisis.
Which would be not only morally good but make for good economics--since working people actually buy stuff and pay taxes.
I hear the voices who will say: you argue for much higher tax rates and against a bi-partisan acceptance of the debt "crisis" but that is not politically feasible.
That's what they said about the Iraq War--don't listen to those tiny voices over there...listen to the Very Serious People, and the editorial pages of the Washington Post and The New York Times. In today's version, it's listen to the president of the United States, the same editorial page writers who aided and abetted the killing of tens of thousands of people and the wasting of trillions of dollars, and billionaires like Pete Peterson (who, by the way, made his fortune on piling up DEBT and LEVERAGE) who are buying a public debate--despite FACTS TO THE CONTRARY.
"Politically feasible" lasts as long as the next election and public sentiment. Courageous politicians--or, at least, those who have a set of strong beliefs--can move the public. Once upon a time, the deficit ranked high on peoples' list--largely because of an endless drumbeat of idiotic articles and non-stop handwringing, and the creation of the first Catfood Commission by the president.
In May, though, only 17 percent of REPUBLICANS thought the deficit was a big concern--double the level for Democrats and Independents.
Oh, just to be clear--there is a huge crisis in America...and people across the political spectrum know it. What was upper most on the minds of Republican, Democrats and Independents in the above poll:
J. O. B. S.
All we need to do is to stop obsessing about a phony crisis and focus on what matters.