Jared Polis, the Democratic Party and Bowles-Simpson
In my previous post I criticized my Democratic congressman from liberal Boulder, Colorado, Jared Polis, for supporting the Bowles Simpson agenda. Mr. Polis replied as follows in the comment section of the post:
“The Simpson Bowles budget helps ensure the integrity of social security and medicare for the next 50 years. It includes the revenue from the expiration on the Bush tax cuts for the wealthy and eliminates tax loopholes for corporations. While I would be happy to support a bill to eliminate tax loopholes for corporations on its own, I am thrilled with the opportunity to prevent the privatization of social security and Medicare and ensure their continuation for the next generation.”
I don’t mean to be rude here, but this is an incredible piece of misdirection. Bowles Simpson slashes social security, Medicare, Medicaid, and other vital programs while cutting taxes substantially below where they would be if the Clinton era tax rates were simply continued. It imposes a maximum spending level as a percent of GDP at historically low levels and is designed almost like a constitutional amendment in that it will require a 60% super majority in the senate to overturn. While it may close some corporate tax loopholes, it eliminates taxes on foreign operations, a gigantic giveaway given how easily corporate flows can be manipulated in the global economy. And finally, Mr. Polis, there’s no risk of privatizing social security if the Democrats were to actually represent the majority.
Cutting social security and Medicare in order to save it is one of the standard lines of the Democrats and Polis is sadly just one cog in a party-wide betrayal of the American standard of living. Both of my Colorado senators, Mark Udall and Michael Bennet, also support Bowles Simpson as now does Nancy Pelosi and Barack Obama who we know has offered a plan even to the right of Bowles Simpson. Bowles Simpson in fact should actually be seen as the left pole of the mainstream Democratic Party agenda.
The only thing that’s protected the interests of the average American over the past few years has been the refusal of the Republicans to move one inch on taxes. Being that deficits don’t matter, the best outcome in November would be the election of a sufficient number of Republicans to stymie the Democratic agenda.
The whole stinking process is not just corrupt, it’s utterly false in that the whole notion budget deficits are a critical problem is simply absurd. How can it be, Mr. Polis, when we have massive unemployment and unused resources we need to reduce activity even further? I think all credible observers would agree additional spending from current levels wouldn’t be inflationary. The response of course is that the problem isn’t inflation, it’s debt. But the US has a monopoly on the dollar and can spend at will without incurring debt. There’s absolutely no basis for cutting our living standards to meet an artificial construct called “sound finance”.
To demonstrate the magnitude of the betrayal being concocted by the Democrats, I think it’s useful to go through the Bowles Simpson report and extract some of the ideas and values incorporated within it. I think it’s critical to do so since it’s now so clearly the bed rock value statement of the Democratic Party.
The report, dated December, 2010, is entitled “The Moment of Truth”. Quite a humorous Orwellian morsel, based as it is on the complete falsity of its entire foundation. Its central premise is that a nation with its own currency is constricted just like a household. It proclaims “America cannot be great if we go broke”, a notion as absurd as positing a household could go broke by borrowing from itself. And this: “Ever since the economic downturn, families across the country have huddled around kitchen tables, making tough choices about what they hold most dear and what they can learn to live without. They expect and deserve their leaders to do the same.” Ridiculous. “The problem is real.” “There is no easy way out.” Both statements are lies: The “problem” isn’t real and there is an easy way out. It’s a combination of higher taxes to counter extreme inequalities of income and printing money to the extent it’s needed.
Here’s some of the lowlights of this truly disgusting political agenda.
The report calls for equal spending cuts between security and non security “discretionary” spending, this despite the fact that military spending today is far above the highest levels seen during the Cold War, adjusted for inflation. The Cold War saw a supposed dire threat from the Soviet Union, today we’re fighting …………… what exactly? A few thousand terrorists? Despite being surrounded by Canada, Mexico, and two oceans, we spend more on “security” than the rest of the world combined. Surely, Mr. Polis, the “security” budget should be slashed before we start thinking of cutting the living standards of the majority.
Non-military spending cuts
The document seeks to pre-limit emergency spending and requires a 60 vote supermajority to go above it. This is truly outrageous considering the monstrous amounts spent on foreign interventions that clearly don’t remotely involve emergencies. In spite of the enormous disasters we’ve seen recently in the gulf, in New Orleans, in hurricanes and tornadoes, in forest fires and much more, the document callously has the nerve to say: “In limited situations, some emergency costs may be necessary.”
Bowles Simpson seeks to cut the Federal workforce by 200,000. Now, I have no particular love for government bureaucrats but some of these workers perform vital functions like overseeing the environment, etc. But isn’t the larger issue one of employment? Do the authors and Mr. Polis realize there’s an employment crisis going on? Where do they expect these terminated humans to go?
Other cuts include interest subsidies for student loans, rises in user fees in such places as national parks, and the closing of some post offices.
The agenda calls for greater progressivity within the social security payout formula so that middle and upper middle class workers will get paid significantly less and the lowest paid will maintain or slightly increase their benefits. How often the cost of progressivism is placed on middle income workers and how easily it’s avoided at the highest altitudes. On what moral basis, Mr. Polis, should the cost of maintaining the weakest among us be borne by the middle class rather than the upper?
The agenda increases the retirement age and worsens the cost of living adjustment formula. According to the report, by 2070 the bottom quintile will still receive about the same benefits while all others will see drastic reductions. The top quintile will see annual social security incomes crater from the scheduled $34,092 to $24,624.
Mr. Polis has stated it’s fair to increase the retirement age given our longer life span. Perhaps the same logic holds for the work week as well. If we’re healthier, why not increase it. A 40 hour week seems so archaic and non-21st century, does it not?
Medicare and Health Expenditures
The report seeks the drastic cutback or repeal of the CLASS Act, the long term care insurance program. It seeks to increase Medicare deductibles and co-pays and forces seniors to pay up to $7,500 per year in costs, an astronomical sum for most, representing over 50% of an entire year’s worth of average social security income. It even callously seeks to eliminate the ability of seniors to self insure under Medigap in the theory that seniors are abusing the privilege of visiting the doctor.
So after squeezing the living standards of the vast majority, let’s look at the revenue side. We have the lowest tax rates since the Great Depression by far yet the report tells us that one of its “six major components” is to:
Sharply reduce rates, broaden the base, simplify the tax code, and reduce the deficit by reducing the many “tax expenditures”—another name for spending through the tax code. Reform corporate taxes to make America more competitive, and cap revenue to avoid excessive taxation.
Later it proclaims that “Tax reform must reduce the size and number of …tax expenditures and lower marginal tax rates for individuals and corporations”. This is supposedly a deficit reduction program yet tax rates are actually being reduced. Regarding corporate taxes, the report argues we should eliminate taxation on the foreign operations of US corporations because other countries aren’t doing it. In an age when companies so routinely avoid taxes by establishing false foreign offices and manipulating intra-company flows, this is an outlandish idea. If the worry is one of “leveling the playing field”, why not pressure other countries to raise their taxes on corporations? Why is it that competitiveness always without exception involves some combination of hitting the average person and helping the most powerful? Always, without exception.
The top individual tax rate is to be reduced from 39.6%, which is theoretically where it is once the Bush tax cuts expire, to between 23 to 29%. The report specifically demands that the “top rate must not exceed 29%”, a rate it’s never seen since the Great Depression and just 1/3 its level in the prosperous 1960’s.
The report contains a distributional analysis of the tax changes which seems to indicate it has a progressive bias (not counting of course the drastic spending cuts). But this is extremely misleading since, although not pointed out in the report, the baseline assumes the Bush tax cuts are continued. So perhaps the tax proposal is more progressive than the Bush tax rates; but how about a test against the pre-Bush rates? We know they were far more progressive then and not only that, the deficit “problem” would no longer exist at those levels and we’d have no basis for the draconian spending cuts or the institutionalization of a low tax / low spending society.
Finally, the agenda seeks to add a regressive 15 cent per gallon gasoline tax.
So that’s the quasi official, even left wing, side of the Democratic Party agenda. Is the Republican Party agenda the same or even worse? Yes, of course. But Democrats need to answer for their own agenda, not that of their opponent. And the Bowles Simpson agenda is truly horrendous. I for one could never bring myself to vote for any Democrat who would support this obscenity. They’re traitors to their constituents and traitors to the very fabric of American society.