The 99%’s Deficit Proposal

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How to create jobs, reduce the wealth divide and control spending

Prepared by Occupy Washington DC
Freedom Plaza, November 2011

The disconnect between Congress and the people is vast.  For decades, Congress has been passing laws that benefit the 1%, their campaign donors and big business interests, rather than creating a fair economy that serves all U.S. citizens. With this report Occupy Washington, DC shows that Congress is out of touch with evidence-based solutions, supported by the majority of Americans that can revive the economy, reduce the deficit and wealth divide while create millions of jobs.

OccupyWashingtonDC.org seeks a major transformation to a participatory democracy in the economy as well as in government. For forty years, concentrated corporate interests have acted with intent to take over government and other institutions. We seek an end to the rule of concentrated wealth and corporate power by shifting control, wealth and ownership to the people.

This report puts forward evidence-based solutions that will re-start the economy and avoid placing financial burdens on future generations.  For the most part these ideas are not new.  They are well accepted by economists and are consistent with the views of super majorities of Americans on key issues.  Further, more than three-quarters of U.S. citizens say the country’s economic structure is out of balance and “favors a very small proportion of the rich over the rest of the country.” They are right. The solutions to our economic crisis are evident but they are blocked by those who profit from the status quo and control elected officials through the corrupt U.S. political system and its money-based elections.

The elites in Washington, DC seek to erase deficits that were caused by increases in war and military spending, tax breaks for the wealthy and corporations, the increased cost of health care, as well as bank bailouts, and increased costs and lost revenue from the economic collapse. The bi-partisan elites seek to cut $1.2 trillion in deficits even though there is no outcry for such cuts or evidence in the economy that they are urgently needed.  They are proposing cuts in services to seniors, students, the poor and middle-working class households who did not cause the crash but already suffer from its consequences. This report shows that we can get the economy moving, reduce the wealth divide and control government spending while helping the 99%.

This report should not be considered the demand of the Occupy Movement. It was prepared[1] by one Occupation, Freedom Plaza in Washington, DC and it does not reflect even that Occupation’s full demands.  Most of this report provides solutions to the deficit questions the Congressional Super Committee is attempting to address while also re-starting the economy.  The difference between the Occupied Super Committee report and the Congressional Super Committee report will be stark and further demonstrate the corruption and dysfunction of government.  While this report’s recommendations would benefit the 99%, the report that will come out of the congressional Super Committee will benefit the 1%.

Creating a Fair Tax System That Shrinks the Wealth Divide

The United States does not have a lack of financial resources; it has an intentionally unfair distribution of resources. The federal income tax has become less progressive and the rate paid by the wealthiest has been cut dramatically in recent decades.  From 1944 through 1951, the highest marginal tax rate for individuals was 91%, increasing to 92% for 1952 and 1953, and reverting to 91% for tax years 1954 through 1963. In 1964, the top marginal tax rate for individuals was 77%. From 1965 through 1981 the top rate was 70%. The top marginal tax rate was lowered to 50% for tax years 1982 through 1986 and today it is just 35%.

The tax on investment income, capital gains, has also been dramatically reduced.  The maximum statutory rate on long-term capital gains was 28% in 1991, 20% in 1997 and has been merely 15% since 2003.

The wealth divide has become extreme over the past three decades and tax policies have exacerbated this trend; much of the tax code exemplifies policies for the 1% at the expense of the 99%.  The wealth divide is one of the foundational reasons why the economy no longer works and is in steady decline for most people in the United States. The tax code inadequately funds government, but that is the result of unfair tax cuts, not because America is broke (it isn’t). As Andrew Fieldhouse of the Economic Policy Institute testified “Income per capita has jumped 66% over the past 30 years, and is projected to grow another 60% over the next 30 years.” The country needs to put in place policies that reduce the wealth divide and share wealth fairly so that when the economy grows it benefits all citizens, not just the 1%.

The recommendations below begin to correct the unfair policies of the last three decades, but these are only first steps to the transformational changes that are needed.

  • Tax the highest income households: From 1960 to 2004, the top 0.1 percent of U.S. taxpayers — the wealthiest one in one thousand — have seen the share of their income paid in total federal taxes drop from 60% to 24.3%. America’s highest income-earners — the top 400 people who have wealth equal to 154 million Americans — have seen their federal income tax drop from 51.2% in 1955 to 18.1% in 2008. If the top 400 paid as much of their incomes in personal income tax as the top 400 of 1955, the federal treasury would have collected $50 billion more in revenue from just those 400 taxpayers. If the top 0.1% of taxpayers — Americans with incomes that averaged $4.4 million — had paid total federal taxes at the same rate as the top 0.1% paid these taxes in 1960, the federal treasury would have collected an additional $250 billion in revenue.
  • Merely not extending the Bush tax cuts would add nearly $500 billion each year in tax revenue.  Thus in just over two years the goal of the deficit committee would be met. This would be insufficient to correct the wealth divide and does not go as far as Occupy Washington, DC advocates.
  • A tax of a half of a percent or less on Wall Street speculation could raise over $800 billion in a decade. The Speculation Tax on the purchase of stocks, bonds and derivatives would be a tiny tax with a big impact.  People in the U.S. pay much higher taxes on purchases of food and clothing; it is only fair that the wealthy pay taxes on purchasing wealth instruments.
  • A fair tax on capital gains, treating it as ordinary income would raise $1 trillion over a decade. Wealth-based income and work-based income should be treated equally under the law as it used to be. Warren Buffet has received a great deal of attention for pointing out that he pays a lower tax rate than his secretary or anyone who works for him. The reason for this is that investment income is taxed at a much lower rate than income from labor.  The United States needs to tax wealth more and work less.
  • Congress should enact a “pure worldwide” tax system, in which all profits of U.S. corporations, whether they are generated in the U.S. or abroad, would be taxed by the U.S. This would end “deferral,” i.e. where taxes are deferred until money is brought back into the United States. U.S. corporations would continue to receive a credit against any taxes they pay to a foreign government (the foreign tax credit) so that profits are not double-taxed. Under a pure worldwide tax system, corporations would have little or no tax incentive to move jobs offshore because the U.S. would tax profits of corporations no matter where they are generated. The Treasury estimates that deferral of U.S. taxes on offshore corporate profits costs close to $50 billion each year, and many experts think this estimate is substantially understated.
  • Ending deferral does not even address the hundreds of billions lost through tax havens. Tax havens should be shut down through the passage of the Stop Tax Haven Abuse Act.  In fact, the U.S. Treasury estimates this costs $100 billion each year. In 2006 the U.S. Senate Permanent Subcommittee on Investigations reported that Americans now have more than $1 trillion in assets offshore and illegally evade between $40 and $70 billion in U.S. taxes each year through the use of offshore tax schemes.
  • Closing corporate tax loopholes would return the fair share of taxes paid by corporations to the funding of government. Declining corporate taxation is another prime factor in increasing deficits. Corporate income taxes have fallen from roughly 4.8% of GDP in the 1950s to only 1.8% of GDP over the past decade. Ending just two large breaks, deferral of overseas revenue and accelerated depreciation would raise about $114 billion over a decade. The Treasury Department lists $365 billion in corporate tax breaks being gifted annually — that’s $3.65 trillion over the next 10 years. Due to tax loopholes, corporations pay record low tax rates — they actually pay 21% on average. Indeed, a recent report by Citizens for Tax Justice found that Wells Fargo received $18 billion in tax breaks, while both Verizon and General Electric paid negative taxes.  Earlier Citizens for Tax Justice reported that 12 major companies which together made $171 billion in profits from 2008-2010 paid a negative $2.5 billion in taxes, thanks to $62 billion in tax subsidies.

The taxes described above would generate at least $600 billion annually.  The goal of the Joint Deficit Committee of $1.2 trillion over ten years could be met in two years. The United States has more than enough wealth to meet the needs of its people.

Cutting Spending for Economic Security

  • Military spending, found in the Department of Defense and other departments, has increased dramatically during each year that George W. Bush and Barack Obama have been president, roughly doubling during the past decade both as measured in real dollars and as a percentage share of discretionary spending.  Military and related “security” spending is now at over $1 trillion per year and comprises well over half of federal discretionary spending.  It is also very nearly equal to the military spending of all other nations on earth combined. Ending our two most costly wars in Iraq and Afghanistan before the 2013 fiscal year budget would save $1.8 trillion, as compared with ending those wars on the currently planned schedule, with savings of $108 billion per year.
  • The Sustainable Defense Task Force recommended modest cuts of $1 trillion over the next decade, not counting savings from ending the current wars. U.S. military spending could be cut by 80% and still be comfortably well ahead of any other nation’s military spending. See Creating Jobs and Restarting the Economy below on how these funds could be used to create jobs, restart the economy and provide much-needed services and infrastructure to the country.
  • Corporate tax subsidies through tax breaks and giveaways are a form of spending that needs to be cut.[2] The U.S. needs to end corporate tax subsidies and repatriate overseas funds. According to Citizens for Tax Justice, the 280 most profitable U.S. corporations received tax subsidies amounting to $222.7 billion from 2008-2010. These companies sheltered half their profit from taxes. The result: 30 companies paid less than 0 taxes despite $160 billion in pre-tax profits; 78 of the 280 companies enjoyed at least one year in which their federal income tax was zero or less; weapons maker’s paid a mere 10.6 percent rate in 2010; financial services received the largest share (16.8 percent) of all federal tax subsidies over the last three years.
  • Negotiating better prices with Big Pharma would save more than $200 billion over ten years in pharmaceutical costs. Reforms of Medicare could offer much larger savings. Expanding to an improved Medicare for all system would control the cost of health care spending while covering all in the United States reducing significant financial burdens often resulting in bankruptcy and foreclosure.

Creating Jobs and Restarting the Economy

One in six people who would like a full-time job are unable to find one.  The unemployment rate of 9% greatly underestimates unemployment.  If the pre-1994 measures were used, e.g. including discouraged workers who want jobs, as well as part-time workers who want full time jobs the underemployment and unemployment rate would be 23%.  The measures listed below would effectively create jobs and restart the economy. Job loss means less tax revenue and more expenditure by the government. A critical ingredient to reducing the deficit is job creation.

  • One million jobs could be created annually by writing down all underwater mortgages to market value.  Correcting housing mortgages to the real value of homes would inject $71 billion per year into the economy and save families $6,500 per year on mortgage payments. This would also fix the housing crisis which is an anchor holding back any recovery, according to a new report by The New Bottom Line.  One in five mortgage holders owe more on their mortgage than their home is actually worth. Banks should not continue to be able to profit from housing bubble prices – a bubble they created with their poor and unethical lending practices. Adjusting mortgages to the real value of homes is a fair way to fix the housing market.
  • Failure to stop the foreclosure crisis will ensure a stalled economy.  It is an essential step to economic repair. This could be done without Congress as Fannie and Freddie together hold $1.5 trillion in housing loans or mortgage-backed securities which could be directed to fix the mortgages.  The Federal Reserve has just under a trillion and could unilaterally correct loans to reflect real value. And, the banks could be pressured. Last year, the nation’s top six banks paid out more than twice the cost of re-writing mortgages to make them fair ($71billion per year) in bonuses and compensation alone ($146 billion in 2010). The nation’s banks are sitting on a historically high level of cash reserves of $1.64 trillion.
  • A fundamental reason for job stagnation is relying on the private sector to create jobs and refusing to engage in direct government job creation in the public sector. According to Business Week, “Since the end of the recession, government employment–including federal, state, and local jobs–has fallen by roughly 600,000. State and local governments have particularly felt the pain, according to a report released this week by the Census Bureau, which shows that there were over 200,000 fewer state and local government jobs in 2010 than in 2009.” The most recent jobs report shows a continued downward trend in government jobs. State deficits and federal inaction ensure these job losses will continue.
  • In addition to our need to rebuild the nation’s physical infrastructure, there is an even more urgent need to rebuild its human infrastructure.  The drastic rise in inequality and joblessness has torn apart the social fabric, destroying countless individual lives, families, urban neighborhoods, and rural communities across our country. For more than a generation, the major “growth industry” in impoverished communities has been the illegal drug industry. Persistent, trans-generational poverty is directly responsible for the fact that the U.S. now leads the world in imprisoning its own people: 2.5 million, by the latest count, with more than 5 million more under some form of court supervision. (China, with its 2.5 billion people, runs a poor second.) Although most of the prison population is white, people of color are disproportionately represented, leading many analysts to declare that the mass incarceration of African-Americans and Latinos has created a new caste of unemployable “untouchables.” Only a massive public works, community development, and job training program can end the destruction of American communities and stop the shameful criminalization of poverty.
  • As public sector jobs are created, the country must also strengthen the public sector in ways that will require new democratic reforms to put publicly owned or financed enterprises under popular control. A long-term goal should be to democratize the economy so the people of the United States share in wealth and ownership as well as influence over the economy. See below Democratizing the Economy, Shifting Economic Power, Wealth and Ownership to all in the United States. There is a desperate need for a mass public works program, not only to create jobs, but also to meet the urgent needs of the country.
  • The American Society of Civil Engineers estimated that failure to fix the nation’s infrastructure has created serious damage so extensive that $2.2 trillion will be required by 2014 just to meet current demands. The ASCE gave the nation’s infrastructure an overall grade of “D.” Its report cited cracking levees, a quarter of the nation’s existing bridges sagging, leaking pipes losing billions of gallons of drinking water per day, aging sewers releasing human waste into rivers and lakes, horrendous traffic congestion and air and water pollution. This is not “make work” but urgently needed work. A public works program modeled after the depression era Works Progress Administration would create 15 million jobs and build the infrastructure needed to create a sustainable economy.
  • Spending on the military is a drag on the economy, not just because it makes up 55% of federal discretionary spending, but because more jobs would be created by spending on education, infrastructure, green energy, or even on tax cuts for non-billionaires.  Converting a fraction of current military spending to other industries and tax cuts could produce 29 million new jobs, one for every unemployed or underemployed person in the United States, even after finding new employment for everyone displaced during the conversion.
  • Putting in place improved Medicare for all would provide a major stimulus for the U.S. economy not only by controlling the cost of health care and reducing deficits but by creating 2.6 million new jobs, and infusing $317 billion in new business and public revenues, with another $100 billion in wages into the U.S. economy.
  • Erasing student loan debt would have an immediate stimulating effect on the economy. As Mychal Smith writes: “[C]onsider the potential impact on the economy if all of a sudden 35 million people were able to add to their monthly budget anywhere between $400 and $1000 that they no longer needed to satisfy exorbitant student loan repayments. . . . Debt free degree holders would allow for more risk taking and innovation.” As Robert Applebaum, an advocate of forgiving student loans writes: “the ‘educated poor’ are not buying homes, not starting businesses or families, not inventing, investing or innovating and otherwise engaging in economically productive activities.”  And, as Cryn Johannsen of All Education Matters points out, this would be a long term stimulus because college debts are multi-decade in length. Johannsen describes a “crisis that is affecting millions of educated Americans. We are indebted for life. Most of us will never be able to pay off our loans for college.” Education is a critical building block for the economy and going forward the United States must develop a system of higher education that does not require students to go into debt just to receive an education. Rather than a loan-based system the U.S. needs a system based on grants, scholarships and public funding.

These recommendations would create millions of jobs and get the economy moving again.  As the economy develops and expands, programs need to be put in place so that new wealth is shared more fairly; workers have greater control over their work through employee ownership and protections for collective bargaining; and so some of the profits created by public investment (i.e. by tax dollars) are shared among all U.S. taxpayers.  See below Democratizing the Economy, Shifting Economic Power, Wealth and Ownership to all U.S. Citizens.

Protecting and Improving Social Security

Saving Social Security is not a traditional left-right battle. Polls consistently show that people across the political spectrumoverwhelmingly supportSocial Security and do not want to see it cut. Even the vast majority of Tea Party Republicans support these programs. Cutting Social Security is a Wall Street agenda of the 1% that opposes the interests of the rest of us. As Dean Baker writes “There is a bipartisan consensus among the elites that these programs should be cut. The guiding philosophy of this drive is that public money that goes to programs for middle income and poor people is money that could be in the pockets of the wealthy.”

Social Security does not contribute to the deficit.  Social Security is financed by a designated Social Security tax and there is more than $2.5 trillion in the Social Security trust fund.  The efforts to cut Social Security to fix the deficit are a fraud designed to enrich Wall Street financiers by forcing people into the private retirement market.

The temporary payroll tax cut will create some jobs, but not enough to get the economy moving and is not the most effective tax cut stimulus. Further, it unnecessarily puts Social Security in jeopardy by reducing taxes designated for Social Security. The Congressional Budget Office estimates the cut will reduce federal revenues by $112 billion over the next two years. The government will have to borrow to fill that hole in the Social Security trust fund, giving opponents of Social Security another argument against the program.

Social Security faces no immediate threat of insolvency. The Congressional Budget Office just released new projections showing that the Social Security trust fund is fully solvent through the year 2038. Even after that date, the program would have enough money to pay 81% of scheduled benefits for the rest of the century. Below are recommendations that would strengthen social security.

  • The funding of Social Security is easy to fix. Currently, the tax on wages subject to the tax is capped at $107,000. The upward redistribution of income over the last three decades has caused a large share of wage income to escape taxation. If all wage income were subject to the tax, then it would leave Social Security fully solvent for its 75-year planning period.
  • The Social Security tax has not kept up with the wealth divide. In 1983, the Social Security tax ceiling was set so the tax would hit 90% of all wages covered by Social Security. That 90% figure was built into the 1983 Greenspan Commission’s fix of Social Security. Requiring the ceiling to rise with inflation was expected to result in the Social Security tax continuing to hit 90% of total income. But, in 1983 no one predicted the extreme wealth divide that exists today. The richest 1% of Americans got 11.6% of total income in 1983. Today the top 1% takes in more than 20% of total income and as a result the Social Security payroll tax hits only about 83% of their total income. The tax should go back to covering 90% of income. That would mean the ceiling on income subject to the Social Security tax would need to be raised to $180,000.
  • Social Security should be strengthened in ways that increase the retirement security of people in middle-and working-class. Particular attention should be paid to improving the living standards in retirement of workers in poorly compensated jobs, who typically have little or no retirement savings outside of Social Security.  The average Social Security benefit of $14,000 is only about 30% above the poverty line. Indeed, 21% of Social Security beneficiaries receive Social Security benefits that fall below the poverty line. In 2011, the Commission to Modernize Social Security proposed increasing benefits for all retirees by a uniform amount equal to 5% of the average benefit, about a $700 annual increase for beneficiaries today; that workers who have worked at least 30 years should receive benefits equal to 125% of the poverty threshold when they retire at the full retirement; providing at least five years of dependent care credits through Social Security as women (and some men) spend part of their working years caring for children and elderly parents; reinstating the post-secondary student benefit that existed until 1983 and allowed students who were receiving Social Security due to a parent’s death, disability, or retirement to continue until they were 22 years old if they were in college; and increasing the survivor’s benefit for widowed spouses to ensure that they receive at least 75% of the benefit amount they received when their spouse was still alive.

Improving Medicare and Expanding it to Provide Health Care to All in the United States

  • Former Labor Secretary Robert Reich writes “Medicare isn’t the nation’s budgetary problems. It’s the solution. The real problem is the soaring costs of health care that lie beneath Medicare. They’re costs all of us are bearing in the form of soaring premiums, co-payments, and deductibles. Medicare offers a means of reducing these costs.”
  • Medicare bears the burdens of existing within an insurance-based health care that fails to control costs and creates tremendous bureaucracy.  While there are short-term fixes to Medicare, what is needed is an end to the current insurance-based approach. The United States spends the most per capita per year on health care yet a third of the population is either uninsured or underinsured so that they face financial ruin if a serious accident or illness occurs. Health care spending in the U.S. is rising 2.5% faster than GDP.
  • Expanding and improving Medicare so it covers all in the United States is a key component to controlling health care costs and government spending; as well as ending the deficit problem of state and federal budgets. Estimates of how much would be saved on administrative costs alone by extending Medicare to cover the entire population range up to $400 billion a year. This savings plus the inherent cost-controls of a single payer health system would offset the cost of providing everyone in the United States with access to lifelong, comprehensive, quality health care. Controlling health care costs would sharply reduce the long-term budget crisis, as well as foreclosures and bankruptcy.
  • Even without improving and expanding Medicare to cover all, the program is not in crisis. The Medicare Trustees say that the program faces a modest shortfall over its 75-year planning horizon. The projected shortfall is around 0.3% of GDP or less than one-fifth of the amount that annual military spending was increased since September 11th, 2000.
  • Economist Jack Rasmus points out that all it takes to cover the Medicare shortfall is a mere 0.25% increase in the Medicare share of the payroll tax for the next ten years and another 0.25% starting in the eleventh year. The Medicare tax rate is currently 2.9% for the employee and the employer.  These tiny tax increases would make Medicare secure.
  • In fact, the Congressional Budget Office (CBO) calculates that the Medicare system in its current form is far more efficient than the privatized system advocated by a bi-partisan consensus of political elites. CBO’s projections show that switching from Medicare to a privatized system would add $34 trillion to the cost of buying Medicare equivalent policies over the program’s 75-year planning period.
  • Medicare provides efficiency. Reich reports: “Medicare’s administrative costs are in the range of 3%. That’s well below the 5% to 10% costs borne by large companies that self-insure. It’s even further below the administrative costs of companies in the small-group market (amounting to 25% to 27% of premiums). And it’s way, way lower than the administrative costs of individual insurance (40%). It’s even far below the 11% costs of private plans under Medicare Advantage, the current private-insurance option under Medicare.”

Democratizing the Economy, Shifting Economic Power, Wealth and Ownership to all Citizens in the United States

Big finance corporate capitalism is failing. It is concentrating ownership and wealth as well as domination of the economy in the wealthiest Americans. New approaches are needed to share wealth, ownership and economic power more fairly. The grass roots protests, whether from the Occupy Movement or the anger from the conservative Tea Party, are based on the same realities: economic insecurity and economic unfairness. A full discussion of these issues is beyond the scope of this report but it is time for the people of the United States to be asking critical questions:

  • What is the next evolution of the economy?
  • What can be done to reduce economic insecurity and economic unfairness?
  • How can it be reshaped so that people gain greater control of their lives and greater influence over the economy?
  • What new forms of ownership can be developed to shift economic power to the people?

The answers to these questions lie in the conflict of our era – participatory democracy vs. concentrated wealth. There is growing evidence and experience that shows a democratized economy is the fairest, most sustainable and effective approach which results in a shared prosperity.

Democratizing the economy would move the United States away from concentrated corporate capitalism and create an economy in which wealth is more equitably shared.  This change is already happening under the radar of U.S. media coverage. A democratized economy already has a foothold in the United States. There is a lot of experimentation going on regarding worker ownership, democracy in the work place and sharing in the profits of corporations; with communities working together to control development through non-profit land trusts; with public banking, democratizing money and community banks; with public utilities and democratizing energy; and with participatory budgeting. These are a few examples of the democratization of the economy that is building a new economic model of more widespread ownership of assets and participation and wealth.  As one of the witnesses of the Occupied Super Committee, Gar Alperovitz writes:

“Over the last three decades, for instance, more workers have become owners of their own companies than are members of unions in the private sector; indeed, 5 million more. Simultaneously, there has been increasing experimentation with unions within such firms, and with new ways to increase participation and control. There are also more than 4,500 nonprofit community development corporations that operate affordable housing and other neighborhood programs. Approximately 130 million Americans are members of co-ops.  In Cleveland, an innovative group of linked cooperatives has set new standards for community-building economic change. ‘Social enterprises’ are developing in communities throughout the nation that transform the ownership of capital into businesses, the sole purpose of which is to provide community services.

One form of new ownership is cooperatives. There are 130 million Americans who are members of some types of co-ops, most commonly credit unions.  Another widely shared experience is joint-ownership is Employee Stock Ownership Plans (ESOPs) which give employees ownership of companies through stocks, while these do not usually include management by employees they do provide a share of the profit.  There are more than 13 million people who are part of ESOPs – meaning there are more employee stock owners than there are members of private unions.  Worker-owned co-ops go further and give workers a say in the management of the company. Worker owned co-ops are at the cutting edge of democratizing the economy and provide some of what we need to transform the economy.”

At a national level, despite comments of some in the corporate media and some elected officials who speak for big business interests, the truth is that national programs like Social Security and Medicare have worked well.  As described in previous sections of this report, these programs can be improved and expanded but they are also models on which to create programs that respond to national needs.  Further, the bail out of the automobile industry, which included some public ownership, has succeeded in saving that industry and returning it to profit.  However, more could have been done to serve the public good by continuing public representation on the boards of automobile companies, requiring taxpayers share in the profit as investors and directing those industries to build mass transit and create jobs.

The Occupy Movement seeks a radical transformation to a new economy and political system.  A close examination of what is happening in the United States shows that this transformation is already underway.

The Lessons of the Super Committee: Corruption Rules Dysfunctional Government

The proposals in this report show that it would not be difficult for the so-called “Super Committee” to achieve the requirement of at least $1.2 trillion in savings over the next decade. And, that it can be done in a way that corrects wealth disparity and re-starts the economy. But, in many ways, the super committee is “occupied” by corporate interests and cannot act for the people.  The make-up of the committee and the tens of millions of dollars members have received from entrenched corporate interests ensure that the committee will exemplify the corruption in Congress – which is why people are occupying public spaces across the country.

The Occupation of Washington, DC at Freedom Plaza expects the commission’s recommendations, if they are able to make recommendations, to reflect the interests of their donors.  We urge the public and the media to review their recommendations with these political donations in mind.

The twelve Members of the Joint Committee on Deficit Reduction have received $41 million from the financial sector during their time in Congress, according to a report by Public Campaign and National People’s Action, “Wall Street and the Supercommittee: The $41 Million Question.” At least 27 current or former aides for the “super committee” members have lobbied on behalf of financial firms.

  • The 12 members of the super committee have received at least $41 million from the finance, insurance, and real estate (FIRE) sector during their time in Congress.
  • They have received nearly $900,000 from three of the top U.S. banks—JPMorgan Chase, Bank of America, and Wells Fargo
  • Since 2000, the industry has spent over $4 billion lobbying elected officials.
  • Nearly 30 former aides to the 12 members work as lobbyists for financial industry interests.

The ten biggest contributors to the super committee members include:

Club for Growth $990,066
Microsoft Corp. $810,100
University of California $629,495
Goldman Sachs $592,684
EMILY’s List $586,835
Citigroup Inc. $561,081
JPMorgan Chase & Co. $494,316
Bank of America $349,566
Skadden, Arps, et al. $347,356
General Electric $340,935

The largest donor, the Club for Growth, opposes any new taxes on the wealthiest in the United States.  As a result, despite the abhorrent wealth divide, the committee is unlikely to recommend the obvious, fair taxes on the wealthiest people who fund their campaigns.

The members of the committee received more than $3 million total during the past five years in donations from political committees with ties to weapons contractors, health care providers and labor unions. They received more than $1 million overall in contributions from the health care industry and at least $700,000 from weapons companies. This presents a problem for the super committee because if they fail to find $1.2 trillion in savings over the next decade it will result to mandatory cuts that will impact health care and weapons makers.  This means the committee is likely to make a bad deal for the United States, in order to avoid cuts to their major donors.

Throughout the time when the committee has been meeting they have been holding fundraisers across the country.  This open money-taking while making decisions that affect those who are giving money is the kind of open corruption that has led to a loss of faith in government.

It is not only donations that will impact the committee, but a major lobbying onslaught by 400 groups who report lobbying the Super Committee.  About 30% of these organizations — 118 groups in total – were from the health sector. The finance insurance and real estate sector ranked third, with 40 companies within that sector reporting lobbying activity during the third quarter that targeted the super committee. And 39 groups in the energy sector reported lobbying the super committee. Both the communications and electronics sector and the general business sector saw 26 companies and organizations explicitly mention the super committee in their third-quarter lobbying reports. These are many of the same concentrated corporate interests that have funded the campaigns of super committee members.

Conclusion: Revolt against Economics for the 1%

Once again, the people of the United States will see corruption reign supreme.  Despite evident solutions to the deficit and the economic collapse, the Congress will show its corruption and dysfunction and be unable to put forward real solutions.

We issue this report to alert everyone – the political system is broken.  It is corrupted by the power of concentrated wealth, campaign donations and corporate power.  The job of the occupations across the country is to build an independent nonviolent movement that replaces this corrupt system with one in which the people rule.  The battle between concentrated wealth and participatory democracy will be heightened by the evident corruption of the Super Committee which will not challenge the unfair policies of the 1% while requiring austerity for the 99%.

The economic and political elite should expect protests to grow. We are at the beginning of what will be seen as a historic revolt against status quo elites that will transform this economy as well as how the United States is governed.



[1] The evidence-based solutions in this report come from people who are experts in the fields addressed as well as the views of people affected by the policies.  We relied on a range of sources and have provided links to those sources in the on-line version of this report.  In addition, Occupy Washington, DC held a public hearing on Wednesday, November 9th.  You can see the public hearing at: CSPAN Coverage of Occupied Super Committee Hearings.  Participants included: Kevin Zeese an organizer of Occupy Washington, DC and co-director of It’s Our Economy and co-chair of Come Home America; Andrew Fieldhouse of the Economic Policy Institute; Carl Conetta of the Project on Defense Alternatives; Kenneth Peres is an economist with the Communications Workers of America; Dean Baker of the Center for Economic and Policy Research; Margaret Flowers an organizer of Occupy Washington DC and congressional fellow for Physicians for National Health Program; Gar Alperovitz is a founding principal of the Democracy Collaborative and with the National Center for Economic and Security Alternatives.

[2] This is commonly known as corporate welfare.  All corporate welfare should be stopped until the Congress passes laws transforming corporate welfare into taxpayer investment.  There are reasons for government to invest in building the economy, for example there is a need to invest in a new energy economy, but the profits from these investments should not only go to the 1% who own energy companies, they should be treated as taxpayer investment and all taxpayers should share in the profit from the investment.  Such a system could be modeled after the Alaska Permanent Trust which has existed for oil exploration on state lands in Alaska since 1980.  Such a system could develop into a guaranteed national income that would lift people out of poverty and provide a safety net to all.  This is a critical part of a democratized economy.  See: Agenda for a Democratized Economy, http://itsoureconomy.us/issues/.

 

  • Kim Cooper

    Never say never. The technology is coming to improve solar so drastically that almost every single family home will have solar power. Remember, we still haven’t mined all of Nikola Tesla’s ideas, and that was a hundred years ago.

  • Atheo

    … Sweden is buzz cutting its forests for biofuels and relies heavily on nuclear power while Denmark has doubled the world’s highest concentration of wind turbines over the past decade and not reduced its coal use one bit, all while its population has barely increased. These are failed models.

    With roof top solar you avoid the transmission costs and losses but the solar potential is far reduced also. These technologies are obsolete. They certainly are not appropriate for Keynesian growth strategies. They will never be anything more than gaudy symbols of elite consumption.

  • Kim Cooper

    You say that business has done nothing wrong, but that is clearly untrue. Business has cheated, lied, and stolen from us. They have done a lot of things that are not only immoral, but illegal too.
    Religion’s role in politics should be to keep everyone honest, but they seem to be failing at that pretty badly.

  • Abram Wolfe Mamet

    I am simply trying to provide a seperate opinion. I apologize for forcing you to read my dangerous, heated, seditious libel.

  • Faye Bernstein

    I would like to know the purpose of the comment section. At your home page, you ask people to sign a petition in support of your proposal and then you have this comment section. To me, asking people to sign the petition infers that the process for developing your document is complete.

  • Kim Cooper

    You are too short-sighted. There are lots of inventors working on developing the technology that will allow that “new energy economy” to happen. Not just better solar panels, but better batteries for storage, and improvements in solar electricity that allow more electricity from fewer panels and power that continues after dark. It’s out there. Too bad the government doesn’t want to help very small companies and people have to do the developing in their garages and living rooms….

  • Atheo

    There is no “new energy economy”.

    There are only uneconomic, agenda driven scams.

    The concept behind Keynesian stimulus is to invest in projects that result in future returns (by making the economy more productive or efficient for example). To waste resources on useless pseudo energy frauds would be catastrophic, both economically as well as ecologically.

    Study the issue closely. Intermittent sources require on demand back up facilities. They also require a doubling of transmission lines to connect the far flung sources with the users and the exorbitant cost that that entails (both in dollars and in habitat loss).

    This would be no better than indulging in grotesque military Keynesianism. You would get a brief stimulus as long as the new money flows in. Then we would be stuck with unaffordable electric infrastructure. More debt with nothing to show for it.

  • jamescarpenter

    The 99% Deficit Proposal is a great work. However, I feel it could be improved in 2 areas.

    First, I believe a just society must guarantee the right to a job, at least a minimum wage job. Although the WPA and public jobs are mentioned, there is no explicit mention of a job guarantee for anyone who wants to work.

    Secondly, there is no discussion of the fact that many scientists believe we are on collision course between dwindling natural resources and an economy that seeks to grow without limit. We need to move to a steady state economy where global population has stabilized and the consumer culture has ended as people choose to live more simply. We must reject the notion of endless economic growth.

    I urge you to visit the website http://www.steadystate.org for a full discussion.

  • Kim Cooper

    Yes, there are delays. I’ve been hearing “in a couple of more months” for two or three years. But it’s nearly done now: the design is finished; now it’s just fabrication. Once the prototype is finished, it will be tested. Then it’s money, then production. In a year or two it will be available in California, or wherever the factory ends up.
    have faith.

  • Atheo

    We don’t have the luxury of beating that dead horse.

    For a jobs program it would make more sense to build a new generation of phone booths.

  • Kim Cooper

    You lack vision. Natural gas will run out eventually. Something must be in place to replace it, or civilization will end.
    I am talking about affordable alternative power: it doesn’t have to be affordable for everyone at the beginning, as there are plenty of well-off people around to get it started. I know lots of people who have PV energy right now even though it costs $30k to $40k. When it costs $10k there will be many more people who will adopt it. And, like everything else that hasn’t had the prices artificially raised (like medical care and insurance), the price will drop.
    Yes, there is a compelling reason for the government to aid in the development of alternative energy, in fact there are several. I’m not going to go into that now, it’s too long and you don’t sound like you are open-minded about it anyway. Let me just give you the one you haven’t heard before: if we wait til we have run out of oil before we find an alternate, we will have no plastics either. Think about the world without plastics.
    I, personally, know about two different new inventions that will come on the market probably in the next year that will improve the state of alternative energy. The one I know more about isn’t just an improvement in storage, it’s an actual new invention that will change the face of solar energy. Next year: watch for it.

  • Atheo

    … but it must also be affordable.

    Even with a storage breakthrough we have the moving target of natural gas prices which have fallen by almost 2/3.

    Hiking energy costs by dictat is elitist.

    There is no compelling reason to socialize the cost of “alternative” energy. The agenda is driven by “energy independence” which is short hand for boycott Ayrabs.

    Let the haters finance their hate program themselves, the public purse must be used only for ends that benefit the people.

  • Kim Cooper

    the manifesto does mention democratically run, worker-owned cooperatives. They are suitable for a steady-state, non-growing economy, sustainable and fair. They do not need to make an increasing percentage of profit, as is required in a stock based Cutthroat Capitalism economy, they just require some profit or breaking even.
    As to the population question: the proscription on birth control for the masses is the 1%’s way of keeping the 99% poor.
    How would you guarantee jobs?

  • Faye Bernstein

    I agree with a large part of your proposal, but some of your suggestions do not seem feasible. For example, I believe, writing down of underwater mortgages is a flawed for the following reasons.

    I’m not sure your assumption, that banks will take the losses in write-downs, is correct. Fannie Mae and Freddie Mac hold more than 50% of home mortgages. These two companies are government sponsored entities and implicitly guaranteed by the taxpayer. In addition, if the banks were forced to write-down loans as suggested, the burden most certainly would be shifted back to the taxpayer.

    There are a variety of causes for people losing their homes. Some are unavoidable hardships, such as loss of employment or illness. Therefore, writing down the mortgage may not solve this situation. Another example, are the individuals unwilling to meet their obligations. In this case, why should the taxpayer assume their liabilities?

    Another circumstance has not been considered and that is the changing value of the house. Today, the property may have a mortgage much higher than it’s market value. But the market is unstable. What happens in the future when the property value increases or decreases? If the property has lost value, is the mortgage reduced again? Or if it returns to it’s previous value, who benefits?

  • Mike Hall

    PLEASE do not put forward your economics proposals as they are.

    You DO NOT NEED (for any ‘financing’ reasons) to reduce the government debt, at all, EVER. Your gov. is an +issuer+ of currency, not a +user+.

    Please talk to Prof Randall Wray at University of Missouri Kansas City, before you decide on your proposals.

    This is hugely important.

    Please contact Wray directly or here:

    http://neweconomicperspectives.blogspot.com/

    In solidarity,
    Mike

  • Dan Wayment

    Dollar draught needs to stop. Buy locally, bank locally. This will invest money locally, not cause the evaporation of income from communities like Walmart and Big Banks cause.

    We have lost, since 1979, over 9.5 Million jobs. Trade agreements are not our friends and trade policy, along with Tariff inequity, is killing us. We need to stop. Corporations make money here. They only ship jobs for greed.
    Talk to Naomi Klein and Robert Reich.

  • Beca Fulcher

    Dan, hello! Yes, your idea of buying local, and banking locally are both very good, and many of us are doing just that! 🙂
    However, perhaps it might be a good idea to read the proposal above–I know it’s long, but it makes a lot of sense, and deals with the issues you spoke of–about jobs, about the inequality in our tax system, etc. In fact, it incorporates sound economic suggestions made by Robert Reich!

    I think it would be a good idea to print it out and read it, then if you agree, send a copy to your Congressional Representatives and tell them to pass this proposal instead of the horrible one the Deficit Commission is about to unveil! Seriously!
    Peace!

  • Beca Fulcher

    Hello Mike, not sure if you had a chance to read this, but you’d be surprised! I know it’s long, but well worth the time to read. It’s WAY better than what the Deficit Commission is about to unveil and make Congress pass! Congress has to pass something before the end of this month–what the Deficit Commission is set to propose will be disaster for most Americans–so if Congress has to pass some deficit cutting bill, it might as well be something that we approve of and that doesn’t hurt the majority of Americans! This alternative proposal does just that!

  • Beca Fulcher

    Perhaps we now need to come up with some easy to read bullet point presentations that cover all the key areas discussed here. I think not many people will read it or will go beyond the title–which is a problem, if this is to be presented as an alternative to what the Deficit Commission is set to ‘unveil’ to Congress.

    I think it is critically important that as many people as possible offer their support for this alternative proposal, so then we can present it to Congress with the backing of “the people”, don’t you think?
    I hope this is not just something posted here, and may the wind carry it where it may! It’s a good proposal, it should be seriously considered!
    Thank you for all the work and research it took to draft this!

  • Eleanor Smith

    *the $41 million question; Wall St & Supercommittee*

    *Just say – No Lobbyists*

    *Return Power to the People*

    *Stop Corporate Welfare*

  • Tara Athan

    I read your proposal (twice) and while I agree with a number of the items listed, I am somewhat uncomfortable with others.

    In particular, I would like to address this comment to the proposal to erase student loan debt. Firstly, you didn’t say whether you are talking about public or private student loan debt. I don’t think the government has the authority to “erase” private student loan debt.

    Second, simply wiping out debt doesn’t feel fair to me. What about all the students and their families who avoided or minimized their student loan debt by paying from their own wages and savings towards college? Should they get a refund of the tuition, fees and expenses that they paid? This is not realistic, of course, but reflects what will be going through the minds of many people when they read your proposal.

    I would instead favor a program that would provide credit against student loan debt (public or private) in exchange for national service (part-time, weekend type stuff for the employed, potentially full-time for unemployed). In this way, graduates would not have to postpone their careers, if they are able to get a job, but will still be giving something back to society in exchange for the education they received. With a program like this, those who paid for their education without going into debt may not feel that they have been unfairly penalized.

  • Abram Wolfe Mamet

    Ok look.
    1) This says that we can’t cut spending for social programs that benefit the homeless and students etc., but it is very quick to point out that we can replace military services via private contracts. Why can’t we privatize the social sector, too?
    2) This report brings up an amazing point, that it is really the governments fault and NOT the 1%’s. I fail to see the importance of “99%” protests while turning a blind eye to the corruption and business-like tactics of the federal government. Although I agree this whole mess is due to the whims of special interest groups, nothing will be fixed by punishing private businesses for doing nothing wrong. We must look to the root of the problem, which is clearly the government’s total abuse of power. There stands my biggest issue with the occupy protests.
    3) I see why some of the issues presented in the report must be addressed. But I don’t believe these causes must be gotten away with completely. For instance, when one looks at unfair tax breaks, they assume tax breaks are bad. Tax breaks are some of the best things to happen to America, incentivizing certain things like private donations and charitable actions. There stand my biggest issue with this certain proposal.
    4) I think that this report just goes about fixing things the wrong way, with a bandage instead of stitches. It will cover up the wound temporarily but it doesn’t look ten years down the road at the potential issues these quick fixes would have.
    5) I don’t believe in communism, it is never fun.
    6) This argues that with more privatization comes more corruption. I disagree completely. I believe that the more power you give to the government the more corruption you would have. It is completely contradictory to say that on one hand, this mess is caused by the big business takeover of Washington, and then to turn around and say that Medicare needs to be publicized and we must turn to a single payer system. You just proved that Washington is beyond corruptible. You either go full capitalist or full communist, but you are not allowed to half-ass either, which is what is happening today and what this plan proposes.
    7) Is this saying give out education for free? what….
    8) I don’t even want to get started with social security. America’s mad addiction with this government controlled ponzi scheme must end sooner or later, and I for one would love to see social security privatized.

    9) Lastly, our government does not have the authority to implement many facets of this proposal and, constitutionally, this proposal would never work. It is simply not realistic on a national level. On a state level… now that is another thing. i would love to see this happen on a state level as a certain experiment, finally realizing the founders’ dreams that states would someday become well-run laboratories of democracy put in place to try new democratic ideas that would help improve the federal government.

  • Carole Beverly

    Actually, I think I’ve seen many of these bullet points on signs at the Occupy movements across the country. But, yes, a one-pager of bullet points will be useful for a great many people.

    In the meantime, this is a first-rate piece of work that needs to be published widely, including on the editorial pages of all of the mainstream newspapers.

  • Carole Beverly

    As the article says: this proposal is evidence-based and supported by the vast majority of the American people – tea-baggers included. Until you can do the same with your positions, don’t waste our time.

  • Carole Beverly

    This proposal is intended to pre-empt the Super Committee’s upcoming recommendations only. It is not intended to be the sum total of the Occupy Movement’s demands or the answer to every conceivable problem.

    I agree with you that the environment crisis is foundational and needs to be addressed on multiple fronts. I expect a future proposal to be published on this issue, and I’m sure the Occupy movement would welcome your participation in shaping that proposal.

  • Faye Bernstein

    The problem is more in the way that business controls the agenda, rather than the problem with green energy. I agree, the way it is planned – solar panels covering the whole desert, etc – is an ecological disaster. Not only covering the desert, but the new transmission lines and, of course, loss of energy having a distant source. However, having a solar hot water system on your roof is efficient. US gives subsides to develop Green Energy to big oil and other who have no interest in green energy.

    You should look at what has been done in Denmark and Sweden.

  • SaveEarth SaveLives

    so it has been written, and so it must be done . . .

  • Ed Madden

    Well thought out, well written. You might also find ideas in “It’s the Jobs, Stupid” a non-fiction book available from Amazon. What’s next is the creation of a third political party to fill the huge void existing in the middle of our political spectrum. To see what it might look like,check into Bernie Sanders an independent from Vermont (I think). As long as there are only two major political parties, gridlock will prevail. Think Supreme Court with its nine justices. Five-four decisions are common but they are decisive and allow action to go forward.

  • Rob Burns

    This analysis and the accompanying proposal look good for the near term. I would like to suggest we all consider some more fundamental reforms for the long term. Path to Prosperity for US All (p2p4USA) includes a constitutional amendment that, among other things, repays all personal debt in the United States and all privately held federal debt essentially overnight. We can imagine the stimulus and liberating affects of such a fundamental shift in our political economy. In addition, p2p4USA also permanently eliminates the inappropriate property assets contrived by government that compelled the creation of such debilitating debt in the first place (natural resource ownership and ownership of government chartered corporations).

    There are many other benefits to p2p4USA. It creates the conditions for us all to live a prosperous life. We should not only enact p2p4USA for ourselves, but we should also do so for our posterity. They will thank us for doing so.

  • Joseph M. Firestone

    The super committee has failed. The automatic triggers are in place; but they will not go into effect until 2013, so Congress has plenty of time o back off before then. I completely agree with Mike Hall and add the following:

    I was very sorry to see Occupy Washington buying into the deficit/debt reduction problem, rather than taking a strong position denying that there is any such problem, or any need at all for deficit reduction. I understand that the take of Occupy Washington of deficit reduction is entirely different, from Pete Peterson’s and the Catfood Commission’s take on this, and also the different takes of the members of the supercommittee; but all share the assumption that there is a problem, and that assumption is a progressive loser in both the short and long-runs. I’ve written so may blog posts related to this issue that I’m getting tired. It’s very hard to see great people like yourself and Margaret accepting this “there is a deficit/debt problem” nonsense. Here are some links which make the case that this is nonsense with plenty of references to the economists of the MMT school like Randy Wray:

    http://bit.ly/tEx0Gz

    http://bit.ly/usjbeS

    http://bit.ly/piKijG

    http://bit.ly/n7i710

    http://bit.ly/mYHtuu

    http://bit.ly/l8sgZH

    http://bit.ly/fIgywy

    I could go on and on. But that’s not the point. Please stop talking nonsense, and oppose any spending cuts for reasons of “economy” or “austerity” or ‘fiscal sustainability.” Those reasons are fantasies.

    Defense spending has to be cut, sure. But not because it’s counter-productive; because the kind of spending they’re doing is counter-productive, corrupt, and has terrible real world consequences. There’s a lot of other federal spending that should be cut because it produces no good results. But, also, there a huge amount of spending on real problems that could be done, because there is no deficit problem. So let’s Mint the $60 T coin and end the austerity war, now! See:

    http://bit.ly/tJUF24

    Now, on to the specifics of the proposal.

    Creating a Fair Tax System That Shrinks the Wealth Divide. I agree with these proposals, not to raise money, which the Government never needs, but in order to reduce economic inequality, which is a threat to democracy, in the US.

    Cutting Spending for Economic Security. No spending should be cut for this purpose. Some spending should be cut in Defense areas and in subsidies to various industries such as Oil. Also, spending should be cut through adopting Medicare for All, but that’s for improving the economic security of indivduals, not for making the Government’s fiscal position more sustainable.

    Creating Jobs and Restarting the Economy. I agree with all of this, but I would also add a Federal Jobs Guarantee program at a much higher minimum wage today, full fringe benefits, including Medicare, and also regional cost adjustments for the minimum wage, and gradual annual adjustments upward until the miniwage is at inflation-adjusted 1968 levels, plus an extra increment passing on productivity gains in the economy to miniwage workers. The end result over five years in 2011 dollars would be a minimum wage of $18.00 per hour. Such a program would protect against the kind of collapse in aggregate demand we’ve just experienced.

    I agree with a lot of this analysis; but I am more radical. preferring a doubling of SS benefits immediately. People’s balance sheets have been ruined by the crash of 2008 and the retirement nest eggs and pensions of millions have been trashed. SS needs to compensate by handling more of the bureden of retirement funding. To those who worry about how this can be funded, see: http://bit.ly/vxG7aQ and the links therein.

    Improving Medicare and Expanding it to Provide Health Care to All in the United States. Yes! HR 676! Pass it, immediately!

    Democratizing the Economy, Shifting Economic Power, Wealth and Ownership to all Citizens in the United States. I couldn’t agree more with this! This is what I think OWS is all about at its core.

    Finally, I do want to comment on the general program for the 99%. It’s being presented as a deficit/debt reduction, but in some way I believe this is not honest and straightforward; it’s a political framing. This program is really a program for social and economic justice and it should be framed and pushed as such while the deficit/debt problem is characterized as what it is, namely a fantasy — an invention of the neo-liberal economists and 1% elites who gave us the greatest failure in economic systems we’ve had since 1929. What they say should carry no credibility at all. On the other hand, agreeing that there is a real deficit problem and then offering a social and economic justice program to solve it is just boggling my mind. I know that Dean Baker plays this game; but nevertheless it is the kind of “loser liberalism” that he has so effectively named. Please don’t play this “clever,” but ultimately counter-productive game anymore!

    Please just call for justice, point out that the deficit/debt problem is a myth, and get on with bringing the corrupt neo-liberal order down forever!

  • Bill Michtom

    The easiest–in terms of what will generate the most money, not what will necessarily get through Congress–but then what will?–is single payer health care. Here are some of the numbers:

    Health Care Costs for 2008: $2.3 trillion — U.S. Kaiser Family Foundation http://bit.ly/uXAh7q

    The U.S. spends twice per capita what other major industrialized countries spend on health care — The Commonwealth Fund
    http://bit.ly/rYH135

    Hence, going to single payer should save about $1.15 trillion PER YEAR! So, one year and the “necessary” savings are reached.

    There is absolutely no reason the SS tax shouldn’t cover 100% of all wages.

    The poverty level is really an extreme poverty level and it is not geared to regional cost of living differences, except for Alaska and Hawaii, each of which is slightly higher than the other 48 states and DC. So there are three poverty levels, that for the 48 contiguous states and DC and one each for Alaska and Hawaii.

    The numbers are here: 2011 Poverty Guidelines, Federal Register Notice http://1.usa.gov/uUCGPF

  • Joseph M. Firestone

    Some of the points I made here: http://october2011.org/blogs/kevin-zeese/99-s-deficit-proposal-how-create-jobs-reduce-wealth-divide-and-control-spending#comment-3955 , can be illustrated by a commentary on Bill Michtom’s comment on the ‘deficit proposal”

    “The easiest–in terms of what will generate the most money, not what will necessarily get through Congress–but then what will?–is single payer health care. Here are some of the numbers:

    Health Care Costs for 2008: $2.3 trillion — U.S. Kaiser Family Foundation http://bit.ly/uXAh7q

    The U.S. spends twice per capita what other major industrialized countries spend on health care — The Commonwealth Fund
    http://bit.ly/rYH135

    Hence, going to single payer should save about $1.15 trillion PER YEAR! So, one year and the “necessary” savings are reached.”

    This conflates “savings” of different kinds and health care payment systems of different kinds. Yes, on the average the US spends twice as much per capita on health care as other comparable nations do. But that doesn’t mean that going to single payer would save half the total costs in the US.

    The right comparison is probably to Canada which spends about 2/3 of what we spend in total Medical expenditures. They have a system very much like Medicare, and cultural values similar to our own. So, we can probably expect about a third of the savings, once the transition is made; but probably not immediately.

    Also, it’s important to note that the “savings” you are talking about are total health care costs for all payers public and private, not Federal Government health care costs. Last time I looked Medicare, Medicaid, and VA and Tricare costs were in the neighborhood of $800 – $900 B per year. So, with Medicare for All we’d be increasing those.

    I think the $2.3 T estimate for health care costs is low for 2008. I’ve seen higher estimates for 2007 from other sources like OECD. And, of course, we are now in 2011, so costs have probably gone up an average of 8% per year or more and we are probably looking at $2.7 or $2.8 T now. Saving 1/3 of that would give us total costs of about $2 T estimating a further increase during any transition period, and most of that total cost would be on the Federal Government, roughly doubling what it spends now.

    Now, for me that’s no problem, since, in my comment below, I pointed out that the Government can’t ever become insolvent and can also create money without taxing or borrowing, to pay for any domestic services it wants to command. So, I think it’s fine for it to be doubling what it spends now on Medicare by passing the more comprehensive version of Medicare for All in HR 676. If that’s in the form of deficit spending, it’s even better because Government deficit spending adds net financial assets to our very depressed private sector balance sheets and will help to create jobs.

    But for people who think that the Government has debts and deficit problems like 99% or more of Congress, and many, many, so-called progressives, the idea that we lower total Health Care nominal costs by 1/3, and also shift $1.1 Trillion of such nominal costs from the 99% to the Federal Government, is a trade-off they will have a problem with, because they think the Government can become insolvent and that more deficit spending right now will cause hyper-inflation. These views are wrong, of course. But they are political realities that one has to get past, and if one offers “deficit reduction proposals,” it is very hard to make the case that we should pass HR 676 at an additional annual cost of $1.1 T.

    On the other hand, if one argues that our debt problems are non-existent, and that deficits are no problem until we reach our full productive capacity, then spending that additional $1.1 T is also not a problem even if we don’t increase taxes one penny.

    “There is absolutely no reason the SS tax shouldn’t cover 100% of all wages.

    The poverty level is really an extreme poverty level and it is not geared to regional cost of living differences, except for Alaska and Hawaii, each of which is slightly higher than the other 48 states and DC. So there are three poverty levels, that for the 48 contiguous states and DC and one each for Alaska and Hawaii.”

    I agree with both these comments. I think there ought to be regional cost of living differences all across the US in the poverty level and that help for the poor should be geared to these. I also think that SS payments should take account of such differences. Why should old people have to leave their families and move to Florida because they can no longer afford to live where they lived their whole lives?

    On there being absolutely no reason why SS taxes shouldn’t cover all of one’s salaries, I certainly agree. However, I don’t think taxes should be viewed in the abstract. They have to be seen in context because they destroy net financial assets in the private sector (debt instruments if the Government deficit spends and also issues debt, and reserves if the Government deficit spends with no debt issuance), while deficit spending adds net financial assets to the private sector.

    In our present economic situation, there should probably be a full payroll tax holiday, because we want to add enough net financial assets to create the aggregate demand needed for full employment. As the economy gets better, however, payroll taxes should be incrementally adjusted to whatever level is necessary to continue recovery, while containing inflation until, as we approach full employment, payroll taxes might reach present levels. But no one’s salary or portion of salary should be exempt from such taxes. There should be no payroll tax salary cap, and everyone should be equal in this respect.

    I said above that payroll taxes should be used as an automatic stabilizing device for containing inflation as we approach full employment. But nowhere have I mentioned that the Government needs extra payroll taxes from the wealthy to fund SS. The truth is that it doesn’t need that. A Government like ours with a non-convertible fiat currency, a floating exchange rate, and no debts denominated in anyone else’s currency, doesn’t need taxes to fund spending. It needs taxes for three other reasons, however.

    First, there has to be some taxation to require people to use the fiat currency. So, the fact of taxation and the ability of the Government to collect taxes on pain of imprisonment, makes the currency valuable for domestic purposes.

    Second, taxes are needed to contain demand-pull inflation once the economy is operating at its full potential, and to prevent bubbles.

    Third, taxes are important in lowering economic and social inequality. We need higher taxes on the wealthy and also very high inheritance taxes. Not because we need the funding; but because the wealth inequality gap is a threat to our political democracy.

  • Screaming Head

    I run occupyxmas.net. We stand in solidarity with OWS and believe legislation and reform is the second step in the Occupy movement. I have a proposed REFORM…NOW is the time to weigh in! Please click the link below, read the proposition and PLEASE share your ideas!

    http://www.occupyxmas.net/2011/11/occupy-xmas-offers-asolution.html

  • Donata Compa-Waltz

    Kim Cooper-You need to look into why oil can be made into plastic-heterocyclics. Simplistically, they are small parts of oil-when rearranged, omitting some parts and adding more or less of other parts-you get plastic. All things are made of these small parts-some have just a few-some have many-oil has many, so is used to synthesize many things, such as plastic, fuel, and even medicine. It is a ‘cheap’ source of energy only because our gov’t subsidizes it, does not count environmental damage and human health consequences as part of the costs, and makes law that makes any competition, expensive. Unfortunately it is a poison to the world once taken out of the depths of the soil.

    Plastic has been made from other plant sources.

    Cannabis/hemp has as many heterocyclics as petrol and is earth friendly. It has been and can be used to make many of the same things petrol is used for and it is not a poison. Yes, it is labor intensive-but that just equates to more jobs-a more robust, cleaner economy. Unfortunately, our gov’t has outlawed it to the detriment of the many and for the short-term benefit of a few.

  • Donata Compa-Waltz
  • JohnsonK

    If we are going to open our eyes widely, we can see a lot of stressful situations especially in economic sector. Financial crisis is everywhere. Everyone is trying his own strategy on how to spend his money wisely. A skill in decision making is very much needed. JP Morgan Chase, one of the nation’s largest lending institutions, has issued a report indicating that consumer spending might increase. He claims that American businesses should get ready for and work at increasing customer spending confidence in spite of the unemployment problems, housing crisis and inflation. Source of article: New JPMorgan report predicts consumer spending will rise

  • Bruce Hartford

    The first bullet point under “Protecting and Improving Social Security” calls for subjecting ALL wage income to social security tax with NO cap. But the second bullet point calls for a cap of $180,000 on “income.” This seems contradictory.

    Are you saying that ALL wage income should be subject to the SS tax, AND that other forms of income (capital gains, dividends, rents, interest, etc) should ALSO be subject to SS tax up to a total income of $180,000? What if someone has salary of $200,000 plus other forms of income? Confusing.

    I understand Reich’s 90% argument, but it’s difficult and confusing to explain. I think the focus should be on the fact that the wealthy get much (most?) of their income from non-wage sources that pay no SS tax at all.

  • changeit

    this is all well and good. How do you get the word out, debate and educate when these ideas will get little to no exposure, especially in any in deep way to get doubters to see their merits. this is complicated stuff . it looks like a bunch of giveaway programs until further thought and study are given. convincing people that these programs create a better economy than what we have now is the key. the blow back will be huge and this is going to be called socialism . that may be true. The best capitalism is socialist.to outright name it socialism will not work . it can be socialism but it needs another name to get converts. do not be brazen enough to call it socialism.

  • changeit

    how do you get the word out when the mass media will not cover this?

  • Leland LeCuyer

    In the Rayburn House Office Building, there sits an elevator with a sign posted over the door: “Members Only.” American citizens are permitted to petition their government for redress of grievances, but they are not permitted to step upon this elevator. Nor are they allowed to speak upon the floor of the “people’s house” their own words.

    Representative democracy in the United States is a sham, a theater-piece to confer the illusion that we have some participation in governance. We do not. Elected representatives do, in fact, represent someone: those who financed their electoral campaigns.

    When people denied a voice gather at one of the Occupy settlements and are permitted to speak and actually have their voices heard, even amplified, the effect is immediate. Suddenly once disenfranchised citizens realize that real power in democracy derives only from them.

    Horizontal democracy is the defining characteristic of Occupy Wall Street. Occupy is not a protest, for in a protest you ask someone else to do something or to stop doing something. Instead Occupy Wall Street is a movement, a reassertion of the power that we always have had but didn’t realize that we had it. We are making real the power we have always possessed.

    Thus I find it troubling that we would go to Washington, hat in hand, and ask congress to act. Not that these requests (demands?) are unreasonable. Not that congress shouldn’t enact legislation like this. But it it not up to congress to defend our liberty, it is up to ourselves. It is the people who must keep vigil to safeguard their freedom.

    Congress will do whatever congress will do. We have no control over that. We, however, do have control over what we do. We will continue to form and expand General Assemblies where those who participate rule. And we will continue to amplify each other’s voices so we can speak as one. And soon enough congress will do what congress must do: accede to the rule of the people.

    Do not abdicate the power of the people by petitioning congress! Let congress petition us!

  • Leland LeCuyer

    In the Rayburn House Office Building, there sits an elevator with a sign posted over the door: “Members Only.” American citizens are permitted to petition their government for redress of grievances, but they are not permitted to step upon this elevator. Nor are they allowed to speak upon the floor of the “people’s house” their own words.

    Representative democracy in the United States is a sham, a theater-piece to confer the illusion that we have some participation in governance. We do not. Elected representatives do, in fact, represent someone: those who financed their electoral campaigns.

    When people denied a voice gather at one of the Occupy settlements and are permitted to speak and actually have their voices heard, even amplified, the effect is immediate. Suddenly once disenfranchised citizens realize that real power in democracy derives only from them.

    Horizontal democracy is the defining characteristic of Occupy Wall Street. Occupy is not a protest, for in a protest you ask someone else to do something or to stop doing something. Instead Occupy Wall Street is a movement, a reassertion of the power that we always have had but didn’t realize that we had it. We are making real the power we have always possessed.

    Thus I find it troubling that we would go to Washington, hat in hand, and ask congress to act. Not that these requests (demands?) are unreasonable. Not that congress shouldn’t enact legislation like this. But it it not up to congress to defend our liberty, it is up to ourselves. It is the people who must keep vigil to safeguard their freedom.

    Congress will do whatever congress will do. We have no control over that. We, however, do have control over what we do. We will continue to form and expand General Assemblies where those who participate rule. And we will continue to amplify each other’s voices so we can speak as one. And soon enough congress will do what congress must do: accede to the rule of the people.

    Do not abdicate the power of the people by petitioning congress! Let congress petition us!

  • changeit

    lots of grear ideas .just what the country needs, good luck

  • Mike Barrett

    1) No, it does not say we can save money by privatizing the military, it says we can save money by “un-privatizing” the military. Although Conservatives take it as an article of faith that privatization leads to lower prices, that is not always true, especially in cases where competition can be moved from the marketplace to the Congress. Examples of this are the relative costs of “contracted security” and U.S. service men, and the relative costs of Medicare and private insurer health care.

    2) Well, yes. It is the government’s fault to some extent. Government regulations put in place during the Great Depression to insulate “main street” from wall street were taken down during the 80’s to allow economies of scale in the banking industry. Regulatory agencies that were beefed up during the last Great Depression that made the American Stock Market the fairest in the world, have been underfunded. As new and more complex markets have been invented, regulatory over site was abdicated by government regulators. These trends allowed the financial industry to get away with outrageous behavior for a decade while giving huge amounts of money and sweetheart loans to legislators to tilt the playing field to their advantage. Government is at fault in the sense that they’ve accepted bribes, but make no mistake, the larger crimes were committed by the bribers.

    3) You are correct again, that tax loopholes are a tool the government can use to incentivize certain behavior without demanding it. However, if you believe the tax laws written in the last two decades were done with the benefit of the country as a whole in mind, well, I’ve got a bridge in Brooklyn to sell you.

    It seems to me that much of the popularity of the “Flat Tax” comes from the idea that taxes are too complicated. While I like the idea of influencing rather than mandating behavior, I don’t much care for the idea of an industry full of lawyers being supported by the complexity of the tax law. Let’s find another way to influence behavior, and simplify the tax code to the point that all tax lawyers are put out of business.

    4) The shortest term thinking I saw used the year 2038. Could you be more specific about which issues are dealt with superficially?

    5) Sure it is. Haven’t you ever heard of a Communist Party? But seriously, judging a proposition by putting it in a box with a pejorative label is cheating. Be specific with your criticism.

    6) First of all I don’t see the argument that way. Somethings the Government does well, like fight war and fund healthcare, and provide a stable foundation for a free market society. Other things it doesn’t do so well. But assuming that whoever gets power will become corrupted, why would you want to tip the balance in favor of business over government? It’s a Democracy. It’s YOUR government. Even if you own a business, you don’t own most businesses.

    7) I’m not so hot on free tuition, but it’s not without precedent. The rationale for a free elementary and secondary education can easily be extended to a bachelor’s degree these days: An educated workforce is good for the economy, and reduces crime.

    8) Privatization of Social Security? Really? Be thankful GWB didn’t get this though in his first term. The streets would be choked with homeless old folks. Talk to someone who retired in the last 5 years who has a defined contribution vs a defined benefit retirement plan. Maybe young folks have gotten used to the idea of trusting their retirement to the vagurities of the market. But it’s a new thing. The kinds of pensions you used to get from railroads are gone.

    I don’t think anybody expects Social Security to provide them with a comfortable income for the remainder of their days. Most salaried workers will wind up with a defined contribution plan from their work, and Social Security from the Gov. Having that defined benefit as a base to work from is valuable, both to the individual and to society. If you want to try and get better results, you can contribute to your IRA. In fact, I dare you to match your SSI deduction from every paycheck with an IRA contribution and try to beat the returns you get from Social Security. Most people are not as good at investing as they think they are.

    9) Could you be more specific on what you think is unconstitutional? I’m not so sure that the founder’s dreamed of “well-run laboratories of democracy”. If you’re talking about the people who wrote the Constitution, I think they were more concerned with getting a federal government with enough power to be worth the effort that could be accepted by the existing power structure. The idea of a laboratory of democracy was popularized in the 1930’s.

    Since a lot of these proposals have to do with federal programs, and interstate commerce, I don’t see how they could be enacted on a state wide basis.

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  • farukkeskin11

    what the Deficit Commission is set to propose will be disaster for most Americans–so if Congress has to pass some deficit cutting bill, it might as well be something that we approve of and that doesn’t hurt seo the majority of Americans! This alternative proposal does just that!

  • farukkeskin11

    what the Deficit Commission is set to propose will be disaster for most Americans–so if Congress has to pass some deficit cutting bill, it might as well be something that we approve of and that doesn’t hurt seo the majority of Americans! This alternative proposal does just that!

  • Emily Morgan

    OWS is a movement against allowing mega corporations buying seats in the government for their own greed and personal gain and as well they want to restrict the power of the federal reserve (a privately owned company) and allow the government to actually regulate and audit the federal reserve, which they are currently not allowed to do. There wasn’t any violence associated with the protests until cops in riot gear weilding pepper spray, billy clubs, bean bag guns, flash bangs, and tear gas showed up and started terrorizing them and taking away their constitutional right of freedom of speech. People just want some release from check loans online they used to relying on.

  • Emily Morgan

    OWS is a movement against allowing mega corporations buying seats in the government for their own greed and personal gain and as well they want to restrict the power of the federal reserve (a privately owned company) and allow the government to actually regulate and audit the federal reserve, which they are currently not allowed to do. There wasn’t any violence associated with the protests until cops in riot gear weilding pepper spray, billy clubs, bean bag guns, flash bangs, and tear gas showed up and started terrorizing them and taking away their constitutional right of freedom of speech. People just want some release from check loans online they used to relying on.

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  • duren

    It is corrupted by the power of concentrated wealth, campaign donations and corporate power. The job of the occupations across the country is to build an independent nonviolent movement that replaces this corrupt system with one in which the people rule. The battle between concentrated wealth and participatory democracy will be heightened by the evident corruption of the Super Committee which will not challenge the unfair policies of the 1% while requiring austerity for the 99%.
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  • Charley Chris

    Creating a fair tax system happens to be the most effective method of controlling spending and creating jobs, in my humble opinion. I don’t think a change like this in the US will cause many negative consequences, if any. Tho’ there are bound to be critics, this will surely help improve the economy and quality of life.
    ~Charley Chris

  • Charley Chris

    Creating a fair tax system happens to be the most effective method of controlling spending and creating jobs, in my humble opinion. I don’t think a change like this in the US will cause many negative consequences, if any. Tho’ there are bound to be critics, this will surely help improve the economy and quality of life.
    ~Charley

  • Charley Chris

    Creating a fair tax system happens to be the most effective method of controlling spending and creating jobs, in my humble opinion. I don’t think a change like this in the US will cause many negative consequences, if any. Tho’ there are bound to be critics, this will surely help improve the economy and quality of life.
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  • Charley Chris

    Creating a fair tax system happens to be the most effective method of controlling spending and creating jobs, in my humble opinion. I don’t think a change like this in the US will cause many negative consequences, if any. Tho’ there are bound to be critics, this will surely help improve the economy and quality of life.
    ~Charley

  • Charley Chris

    Creating a fair tax system happens to be the most effective method of controlling spending and creating jobs, in my humble opinion. I don’t think a change like this in the US will cause many negative consequences, if any. Tho’ there are bound to be critics, this will surely help improve the economy and quality of life.

  • Charley Chris

    Fair tax is the most important for reducing the wealth divide and creating jobs.

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