President Obama sent his budget proposal for 2012 to Congress yesterday, and before the ink was even dry, Republicans were swarming like piranha. According to Rep. Paul Ryan (R-WI), “It would be better doing nothing than if we were to actually pass this budget.” Sen. Jeff Sessions (R-AL) said that the budget was based on “gimmicks,” and claimed that passing it would “be a national tragedy.”

White House estimates put the savings of the proposed budget at $1.1 trillion over 10 years, with two-thirds of the savings coming from spending cuts. Republicans have unanimously rejected that total, with Sen. Richard Shelby (R-AL) labeling it a “timid response to a grave challenge.” Shelby added that the proposal “ignores the will of the American people,” which is more than a little odd coming from somebody who supported the extension of the Bush tax cuts for the rich and openly shared his lunatic idea to fix Social Security by increasing the retirement “age every several years” — both positions being opposed by the majority of Americans.

But it’s easy to understand why Republicans are so vehemently opposed to the President’s budget proposal. While it does make substantial cuts, actually eliminating or reducing the funding for 200 federal programs, the spending reductions total only $33 billion for 2012, which is far less than the Republican’s draconian proposal to cut $60 billion in 2011. But more importantly, the White House budget also ends the Bush tax cuts for the rich, increases taxation on multinational corporations, eliminates $46 billion in subsidies for oil, gas and coal interests, and cuts $78 billion from the right’s most sacrosanct bucket — the Pentagon.

There is a choice to be made regarding the future of our nation, and the American people need to wake up and pay attention. Our national debt is currently over $14 trillion. The interest alone on that debt amounts to around $250 billion per year. The simple truth is that it doesn’t matter if we cut the deficit by $30 billion or $60 billion, or even the $100 billion promised by Republicans, or more — we will still be diving deeper into debt.

Take your pick, the President’s budget or whatever counter is offered by the Republicans — it doesn’t really matter, the spending cuts you’ll find will be largely symbolic. Arguing the merit of either proposal based on the depth of cuts is pure political theater. Either option will be kicking the can down the road. The substantive difference, the criteria upon which the proposals should be judged, lies in their differing methodologies.

Republicans contend that our economic problems are all the result of excessive spending, and their budget proposals reflect that belief. Democrats counter that the issue is more complex and propose a solution that addresses both revenue and expenditure. The result is that, while both parties talk about the sacrifice that will be needed going forward, only the Democratic position strives to ensure that it’s shared.

The fact of the matter is that adherence to the Republican method for addressing the debt will place ALL of the sacrifice on those who can least afford it. Their solitary focus on spending cuts combined with their unwillingness to address a bloated defense budget leaves no alternative. Those fortunate enough to remain wealthy in post-Recession America will not suffer from the proposed federal spending cuts. They only share in the sacrifice by paying higher taxes. And with military spending off the table, cuts to the remainder of the discretionary budget will only harm the poor, impede upward mobility and further weaken the middle class.

President Obama’s budget proposal may not go far enough, but at least it presents a method for shared sacrifice that can be expanded. It combines cuts to social programs with a slight trimming of defense and adds a bit of revenue through modest tax increases. The Republican alternative is more an effort best represented by an M.C. Escher impossible reality. The bottom line being that the budget simply cannot be balanced solely within the proposed Republican framework.

The situation may be complicated, but the math really isn’t. With a $14 trillion hole, only about $440 billion in discretionary spending outside of defense, and annual interest payments of $250 billion, the Republican plan set forth by Rep. Ryan doesn’t balance the budget until the 2060s and piles on $62 trillion in debt during the process. Republican fiscal responsibility is a fairy tale, sort of a contemporary version of the Goose that Laid the Golden Eggs.

But as insane as this GOP plan may appear, like an iceberg, there’s more to it than what we see on the surface. As House Majority Leader Eric Cantor (R-VA) promised, the Republican budget will be “a serious document that will reflect the type of path we feel we should be taking to address the fiscal situation, including addressing entitlement reforms.” In GOP parlance, that means more pain for everyone but the wealthy, pain that will include a full frontal assault on our nation’s social safety nets.

The writing is on the wall. Because the Republicans refuse the responsible path of both increasing revenue and putting ALL spending on the table, they must attack the entitlements. This is possibly the GOP’s most egregious tactic and without doubt one of their favorite arenas for yarn spinning (a euphemism for telling bald-faced lies). Republicans would have everyone believe that Social Security is seriously broken, and that it’s partially to blame for the deficit — sadly, it doesn’t matter to them that both assertions have no basis in reality.

Republican spin on Social Security is nothing but more fable peddling. As evidenced in economist Dean Baker’s letter to Sen. Richard Shelby, sent after the Senator told a nice whopper about the program, even “if nothing is ever done, then Social Security would pay full benefits through the year 2037.” It would also be able to pay around 80% of benefits well into the second half of the century. With small tweaks, the program will remain vibrant for its entire 75-year horizon and beyond. But this narrative doesn’t fit the GOP model for fueling Wall St. profits through privatization, so the truth must be set aside and a tale must be spun.

Part of that Republican tale is the myth of a broken system, but even more disingenuous is their contention that we must fix Social Security in order to address the deficit. This is pure, unadulterated hogwash — grade-A falsehood — a freaking lie! The fact of the matter is that Social Security is not included in the deficit. It is both funded and expensed outside of the budget; it is an off-budget program, and it has a surplus balance of some $2.5 trillion. The truth of the matter is that Social Security hasn’t negatively impacted the deficit — it’s actually helped to mask its true magnitude.

Medicare is another story. Being included “on-budget,” shortfalls in Medicare funding do impact the budget, and program solvency will require much more than tweaking. But even in the case of Medicare, the Republican position is fraught with dishonesty. The problem with both Medicare and Medicaid is not inherent in the government programs but rather a function of the rising cost of healthcare. With Medicare the problem is exacerbated by the increasing number of elderly Americans, but unless we’re okay with just denying them medical services, we still need to seek a real solution.

Of course, a real solution for skyrocketing healthcare costs runs headlong into the Republican priority of maximizing corporate profits. So, never mind that nationally our spending on healthcare is approaching one-fifth of our GDP; forget about the fact that we spend more than double the OECD average yet achieve far worse health outcomes — and whatever you do, please ignore the man behind the curtain — the one atop any of the 10 largest medical insurers who saw their profits leap by 250% during the past decade. This is all SOP for the GOP. Their response to this upside-down scenario is not to reduce costs but to limit access with Medicare vouchers. Hurray for the red, white and blue!

Americans need to pull their heads out of the sand, open their eyes and come to grips with the fact that we’re being plundered by our nation’s economic elite. The Democrats are definitely complicit, but the Republicans are the soothsaying demons of the illicit extraction. Regardless the issue, they have but one position: protect the monied interests. Healthcare costs are soaring, so limit access. The defense budget expands 250%, from $333 billion under Clinton to $847 billion in 2010, and it’s off the table. Federal revenues drop from 21% of GDP in 2000 to 15% in 2010, and the answer is to cut taxes.

The Republican position is always simple because it is single-minded. It doesn’t have to consider the complexities of the economy, the nuances of trade policy, the impact of spending cuts, the most effective means to stimulate job growth, or the ethical implications of any of the above. No, the Republican Party’s laser-like focus on fending for the wealthy makes all decisions easy.

If they were truly concerned about cutting spending, they’d put their knife to defense: the largest and most wasteful of discretionary programs. If they really cared about healthcare costs, they strive to create competition with solutions like a public option. If they were truly concerned about jobs, they’d drop the nonsense about job-killing taxes and admit that tax cuts don’t create jobs. If they gave a flying flip about the average American, they’d drop the charade about having “a spending problem” and tell the truth about taxation.

That truth would include sharing the fact that in spite of a record $1.66 trillion in profits for 2010, revenue from corporate taxes was a meager $191 billion — a rate of around 11%. In full honesty, the GOP would also have to fess up about how overtaxed we aren’t. They’d have to admit that federal taxes are at historic lows. In fact, as a share of our nation’s economy, they’re at their lowest level since 1950. And if they really sought to inform instead of manipulate, they’d make sure that everyone understood that we have the third lowest total tax burden of all OECD nations, higher than only Mexico and Chile.

But honesty is far from being the GOP’s strong suit, and the wellbeing of average Americans is low on their list of priorities. So, we can all expect more distortion of facts, more narrowly focused policies, and more pain for the American people. But cheer up, there is a bright side: so long as you’re in the top 1 or 2 percent of Americans, you can rest assured that the GOP has your back. Of course, if you belong to the other 98%, watch out — because your back makes a real nice target for their budget knife.

---

Article first published as Economic War Declared on the American Middle Class on Technorati.

If you’re a middle or working class American, whether or not you accept it, we’re all in the same boat, and we just had a shot fired across our bow. The co-chairs of President Obama’s deficit reduction commission released their initial proposal late last week and made one thing perfectly clear — they believe our nation’s fiscal problems must be corrected on the backs of working Americans.

The National Commission on Fiscal Responsibility and Reform was created by executive order this past February. The commission’s primary mission was to identify “policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run,” and also to “propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015.”

It’s difficult to fault either the notion to form the commission or the assigned mission. The group was even structured in a bipartisan manner, requiring that no more than 10 of its 18 members be of a single political party. But if the co-chair proposal is any indication of the content of the final report that’s due for commission vote by December 1, then it’s now evident that class warfare has been waged in America, and the two major political parties have allied against the interests of the majority of citizens.

Fortunately, there may still be hope that this isn’t the case, that the co-chair’s full frontal assault on working Americans will not receive the 14 votes needed to move forward. The proposal, as released, is the work of former Republican Senator, Alan Simpson, and Erskine Bowles, who served as advisor to President Clinton.

Simpson’s politics are certainly no mystery, as evidenced by the abusive e-mail he recently sent to the executive director of the National Older Women’s League where he described Social Security as being “like a milk cow with 310 million tits.” And while Mr. Bowles is purported to be a Democrat, his views put him squarely in the DINO (Democrat in name only) camp. He is an investment banker, formally employed by Morgan Stanley, on whose board he still serves, and the co-creator of his own investment firm.

Whether the severe anti-middle-class slant to the present proposal is upheld by the larger commission or not, there is no escaping the elitist agenda of the co-chairs. Their 10 “Guiding Principles” starts with the solemn acknowledgement that we must “come together on a plan” to “get this crushing debt burden off our back.”  And the second principle is like the first, stating that “A sensible real plan requires shared sacrifice.” But sadly, the Simpson/Bowles idea of who exactly needs to participate in said sharing is limited to middle and working class Americans.

The Simpson/Bowles plan does contain a significant number of spending cuts, with illustrative examples that total over $200 billion in 2015 that are interestingly split between domestic and defense expenditures. And while one might wonder why we can trim only $100 billion from a defense budget that’s over $1 trillion — more than that of all other countries combined — or how adding to unemployment by cutting 440,000 federal jobs is going to help the economy, it’s really the proposal’s tax reform recommendations that expose the co-chair’s corrupt idea of shared sacrifice and total disregard for working Americans.

In order to gain clarity regarding the co-chair’s glaringly regressive economic philosophy, one really need look no further than the “goals” they set forth for tax reform: the first of 7 goals is to “Lower Rates” and at the end, in seventh position is “Reduce the Deficit.” A more upside-down prioritization for a “deficit reduction” commission is hard to imagine, but even worse is the fact the detailed recommendations are heavily skewed toward benefitting the wealthy, with a few bones for the poor and a tab that’s picked up by everyone in the middle.

With working America still struggling in the wake of an economic calamity that stripped away as much as a third of the overall wealth of the middle-class and fed the proceeds to rich Wall Street bankers, Simpson and Bowles actually have the temerity to recommend that the few tax advantages held by the vast middle of American wage earners be ended. This would be bad enough if proposed as the mainstay of deficit reduction, but this is not the case. The dynamic duo would use most of the increased revenue, not to reduce the deficit, but to provide steep cuts to the top marginal and corporate tax rates.

The co-chairs propose to slash taxes for the rich by dropping the top marginal rate from 35% to 23% and the corporate rate from 35% to 26%, the combination of which will ADD tens of billions to the deficit. Their proposal also includes restrictions that will prevent Congress from collecting taxes on businesses, like Exxon which had $42.5 billion in 2009 profits and paid ZERO in U.S. income tax.

But never fear, this pair of elitist scoundrels will pay for their proposed tax breaks by eliminating the home mortgage interest deduction and subjecting healthcare benefits to taxation. They’ll also impose co-pays for veterans who use VA hospitals, raise fees at national parks and start charging admission to the Smithsonian museums, and force college students to make interest payment on loans while still in school. It’s time to bend over middle class, because that upper one 1% now make 23.5% of all U.S. income, and they need a tax break.

The “deficit reduction” label of this proposal is nothing more than a rhetorical smokescreen for the “starve the beast” crowd of conservative ideologues to further their goal of plutocratic rule. The gross concentration of wealth in America already has the top 1% holding more than the bottom 90% — a situation that hasn’t existed since the last time the economy collapsed in such grand fashion — the Great Depression. This proposal will only increase that disparity and hasten the American people’s race to the bottom.

---

It would be easy for Progressives — even with the best of intentions — to fumble the growing debate on the federal deficit.

Robert Creamer, Political organizer, strategist and author

I wish this article could be mandatory reading for all Americans. It is a lucid narrative describing the current economic situation in the United States and a credible means by which progressives can advance their vision.

Mr. Creamer provides 6 solid rules for how progressives should approach the deficit, starting with the notion that they must acknowledge the inadvisability of protracted long-term deficit spending. In his words, progressives “should make it completely clear that we share the view that long-term deficits must be brought under control — the real question is how.”

On the topic of how, Mr. Creamer suggests that we must select a path based upon how it will affect our success at creating widely shared economic growth. This criterion is not only about how to create the most growth, but also how the growth will be distributed. One of his more salient points is that, “Controlling the long-term budget deficit is not an end in and of itself. It is a means to an end.” Unless you have an aversion to the facts, I think you have to agree with his assertion that the failure of the economic policies of the Bush administration stemmed from a single-minded push to serve only the wealthiest of Americans.

His third rule is to push for more government spending to create jobs. I know that this is difficult for people to swallow, but I agree that it’s exactly what’s needed. Mr. Creamer makes the point that the costs associated with a major portion of our national labor resource sitting idle far outweigh those incurred with running a deficit. I could not agree more. Not only are there the issues of lost goods and services, but also the direct costs of unemployment and welfare, along with other related costs such as crime and lost opportunity.

Rule number 4 speaks to the folly of conservative solutions to bring the deficit back in line. As always, they would have us cut Social Security or education, or anything else that will support further concentration of wealth to the very top. Of course this is exactly the type of wrong-mindedness that got us into our present mess. Cutting Social Security would not only be unethical but would also inhibit senior’s ability to be self-sufficient, which would just shift the costs, not spare them. And cutting education is just plain STUPID. It’s the same sort of myopic insanity that right-wing plutocrats espouse every time they open their mouths. None of the conservative solutions uphold rule #2, which would require that growth be shared.

Mr. Creamer’s rule #5 is so important that I need to quote it straight out: “To assure we meet this test, we must eliminate the confusion between investment and consumption in our federal budget.” The notion that all government spending is equivalent is just plain nonsense. That’s not the way it works in industry, and it shouldn’t be the way it works for government. There is a difference between investment and expenditure. When the federal government invests in things like infrastructure, energy, and research and development, it’s not only providing jobs but also enabling future increases in productivity. This is good medicine for the vast majority of citizens.

The final rule is essentially a call to arms. Progressives must stay on the offensive. Mr. Creamer cites multiple Republican offences of the recent past, including an indictment of the Bush neo-cons who brought us a trillion dollar war and a greed driven bank crash. He also warns that should the Republicans gain full power, they will do everything they can to privatize Social Security, destroy Medicare, and eliminate infrastructure and education spending. His  assessment should scare the conservative right out of you!

These are serious times. We’re bloodied and bruised, but we’ve survived the Bush era. It’s time for all patriotic Americans to unite. We know what the conservative agenda has in store for us. They essentially had carte blanche for the eight years leading up to the Great Recession they caused. Must we learn the lesson yet again? The Republicans want only one thing, and that’s further concentration of wealth amongst the American royalty. Unless you’re already a member, you can either help fight against their unethical advance of plutocracy or you can be their stupefied guppy. The choice is yours.

---

Read the Article at HuffingtonPost