Liberals offer alternative deficit-reduction plan

McClatchy NewspapersNovember 16, 2010 

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Rep. Janice D. Schakowsky of Illinois.

HANDOUT — MCT

WASHINGTON — Liberals made clear Tuesday what they want from the bipartisan deficit commission — more help for the poor and middle class, and bigger corporate tax increases.

Rep. Jan Schakowsky, D-Ill., one of 18 members of the National Commission on Fiscal Responsibility and Reform that is to report its recommendations on Dec. 1, offered a detailed plan aimed at cutting $427.7 billion from the federal budget deficit by 2015.

Schakowsky's blueprint amounts to a liberal's manifesto. It frames one path that President Barack Obama must weigh as he decides how to tackle deficits.

Will he team with the panel's centrists and perhaps some Republicans on steps outlined last week by the panel's two co-chairmen — a strategy that would alienate his party's liberal base — or will he side instead with liberals such as Schakowsky, and forfeit any chance at a bipartisan deal with the new Congress?

Schakowsky, who's close to House Speaker Nancy Pelosi, D-Calif., was clear in her mission: "Lower and middle class Americans did not cause the deficit," she said. "The middle class did not benefit from the Republican economic policies that led to the current deficit. They were the victims — and should not be called upon to pick up the tab."

Moderate and conservative commission members, who comprise the bulk of the panel, have been more circumspect. After co-chairmen Erskine Bowles and Alan Simpson offered their proposals last week — focused 2-to-1 on spending cuts over tax increases — the commission's three Republican members from the House of Representatives issued a joint statement tentatively welcoming their approach.

"This is a provocative proposal, and while we have concerns with some of their specifics, we commend the co-chairs for advancing the debate," they said.

White House Spokesman Bill Burton called the Bowles-Simpson plan "a step in the process towards coming up with a set of recommendations," and Senate Budget Committee Chairman Kent Conrad, D-N.D., a moderate, called it a "serious proposal."

But liberals were outraged. They tend to favor activist government, help for the needy and higher taxes on wealth to pay for it. Moderates and conservatives are more inclined to reduce government services of every stripe in the crusade to cut government debt, and are less willing to raise taxes.

Under the Bowles-Simpson proposals, discretionary spending — generally popular programs involving education, law enforcement, human services, some defense and other items — would be rolled back to last year's levels for fiscal 2012.

Their plan also would reduce individual income and corporate tax rates while ending or limiting tax loopholes — including the popular one for mortgage interest deductions, which they would limit for second residences and homes valued at more than $500,000.

Wealthy Social Security retirees would see lower benefits. A special minimum benefit would be created for low-wage workers who had full careers but face poverty in retirement. The Social Security retirement age would be indexed to measures of longevity, so that if the national life expectancy rate rises, so would the age of retirement to receive benefits.

Liberals were appalled.

"Democrats should fight loudly and clearly — because the public overwhelmingly wants Democrats to fight that fight," said Adam Green, co-founder of the Progressive Change Campaign Committee.

Schakowsky Tuesday laid out alternatives favored by the left, including:

  • $200 billion of new spending on economic stimulus to help create jobs over the next two years.
  • $110.7 billion in defense cuts. She'd cut certain weapons system and scale back the Army and Marine Corps to pre-Iraq/Afghanistan war sizes.
  • $17.2 billion in health care savings. She'd create a "robust public option," or government-run health care plan, to get an estimated savings of $10 billion.
  • $144.6 billion in tax increases. She'd tax capital gains and qualified dividends as ordinary income. She'd also enact cap and trade legislation where emission allowances would be allocated through auctions.

Many of these ideas went nowhere in the last Congress — notably the public option and cap and trade — even though Democrats had sizable majorities in both the House and Senate. Schakowsky argued that commission deliberations will involve tradeoffs, and everyone must accept something they find distasteful for the greater good.

ON THE WEB:

Simpson-Bowles plan

Schakowsky proposal

MORE FROM MCCLATCHY:

With Social Security proposal, deficit panel touches third rail

John Boehner will face a sea of challenges as House speaker

Pelosi seeks House leadership deal for Hoyer, Clyburn

For more McClatchy politics coverage visit Planet Washington

McClatchy Newspapers 2010

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