Earlier this week, the Congressional Progressive Caucus released its budget for fiscal year 2013, titled the Budget for All, which offers a stark contrast and credible alternative to the misguided budget proposed by House Budget Committee Chairman Paul Ryan (R-Wis.).
Every budget reflects national priorities, not just a bottom line. The Budget for All would meet our most pressing challenges by increasing near-term job creation and public investments, strengthening economic security programs, realigning spending by the Department of Defense to domestic priorities, and financing government responsibly over the long run with progressive revenue sources that place our nation on a sustainable fiscal trajectory. The Budget for All demonstrates that it is possible to be “fiscally responsible” and provide sound economic stewardship, protect the middle class and provide upward mobility.
The most pressing challenge facing the United States is the ongoing jobs crisis, which the Budget for All admirably acknowledges with $2.9 trillion in front-loaded job creation measures and sustained public investments. The budget would allocate $227 billion for a direct jobs program that puts Americans back to work through public service, as was done during the Great Depression. Transportation infrastructure investment would be increased by $241 billion (50 percent) over the next decade to boost employment and lay the foundations for economic growth. Nondefense discretionary (NDD) spending in areas including education, scientific research, and health would be increased by $1.6 trillion relative to current law. By the end of the budget window in 2022, NDD spending would be the same as in 2007 (as a share of GDP) and be 65 percent higher than under the Ryan budget and 50 percent greater than under the Obama budget.
The Budget for All would protect and strengthen vital social insurance programs such as Social Security, Medicare, Medicaid and the Affordable Care Act, maintaining commitments to provide economic security in retirement and health care to seniors, children, and the disabled. The budget would protect and build on health care reform by offering a public insurance option and negotiating lower Medicare pharmaceutical prices. And the Budget for All would essentially close the 75-year shortfall in the Social Security trust fund without cutting benefits by eliminating the cap on taxable earnings that has allowed the highest earners to pay an ever-shrinking share of wages to Social Security in recent decades.
This progressive budget would realign defense priorities towards domestic ones. The war in Afghanistan would be responsibly ended and spending by the Department of Defense would be gradually cut, with the savings allocated to domestic investments.
Lastly, the Budget for All would adequately fund all of these priorities with progressive tax reforms, largely by asking more from the highest-income households that have seen both sizable income growth and large reductions in taxes over the past decade. Higher tax rates would be added for millionaires and billionaires, and the preferential treatment of capital income over earned income would be eliminated. The 2001 and 2003 income tax rate cuts for high-income households would be gradually phased out over a decade, while lower tax rates and tax credits for working families would be preserved. Taxes on financial speculation, carbon emissions, and accumulated wealth would address societal challenges while raising large sums of revenue.
The EPI Policy Center provided technical assistance in developing, scoring, and modeling the Budget for All. The technical documentation of the details of the budget plan and the scoring of its measures are available for all to see. We unequivocally conclude that the Congressional Progressive Caucus budget achieves fiscal sustainability, but more importantly, it does so while spurring economic recovery, strengthening Social Security, Medicare, Medicaid and the Affordable Care Act, and investing in human and public capital. The Budget for All, in short, sets a path that strengthens job growth, improves competitiveness, enhances economic security, lessens inequality and provides avenues for upward social mobility. This budget proves that there is a credible and sensible alternative to Rep. Ryan’s attempt to dismantle government and rebate the tax bill to the already well-off.
Note: The headline of this statement was edited on April 2, 2012 at 11:58 a.m. to more accurately reflect the source of the report