I noted the Republican Leader last week describe the Democratic budget as a "leftist manifesto."
We've done $1.8 trillion in spending cuts already; we raised $600 billion in revenue by restoring the Clinton era tax rates for families over $450,000 a year in income; and now we propose to close the remaining gap with 50% spending cuts and 50% revenue -- and that's a "leftist manifesto."
The Republican budget changes Medicare into a voucher program.
The Republican budget cuts non-defense discretionary spending to levels lower than anything we've seen since OMB started keeping track.
The Republican budget would set annual domestic spending at levels lower than 1962, when there were no Pell Grants at all, when 30% of seniors lived in poverty.
But a Democratic budget that is 50/50 spending cuts and revenues is a "leftist manifesto." The Democratic budget has $975 billion in new spending cuts and $975 billion in new revenue, to close the budget gap 50/50.
[balanced approach bar chart]
That means, including the deficit reduction already done, we will be at $4.3 trillion in deficit reduction, with about $2.8 trillion coming in spending cuts, and over a trillion dollars less, $1.6 trillion, coming in new revenues. Some "leftist manifesto." A trillion dollars more in spending cuts than revenue. At a time when billionaires in America are paying lower tax rates than brickmasons, if that's a leftist manifesto, the leftists ought to fire their manifesto writers.
Leftist manifesto. That's some pretty high rhetoric. We know where the word "manifesto" comes from. It comes from the Cold War, and the Communists. 50% spending cuts, 50% revenue, and the hint is that we Democrats are a bunch of Commies.
That is high rhetoric indeed. And this isn't some fringe Senator from their rank and file. This is the Minority Leader: "leftist manifesto."
Why might the rhetoric be getting so high? What might the Republicans be getting so touchy about?
Well let's look at where we get the rest of our revenue for our 50/50 budget. Where do we get our $975 billion in new revenue?
We go to the Republican treasure trove. We go to Ali Baba's cave for corporations and the rich. We go to the tax earmarks and special deals that special interests have year after year squirreled away in the tax code.
How big can that treasure trove be? What is in Ali Baba's cave? Well stand back. I will show you.
[Annual revenue raised v. revenue lost chart]
For every dollar of revenues the United States collects in actual revenues from individual taxpayers every year, another 94 cents goes back out through loopholes and special rates and deductions -- a grand total every year of more than a trillion dollars. And since we budget for ten year periods, it's ten trillion dollars in this budget period.
On the corporate side, for every dollar of revenues the United States collects in actual revenues from corporations every year, another 87 cents goes back out through loopholes and special rates and deductions -- a grand total every year of over 150 billion dollars.
And since we budget for ten years, that's more than $1.5 trillion. Add the two together and it's more than 11.5 trillion dollars. Accounting for modest growth we get $14 trillion over the next decade, of which we use for deficit reduction $975 billion, or just 7%. Ali Baba's cave of tax spending is very very big.
And that doesn't even count the billions of dollars corporations and wealthy tax avoiders hide offshore, that never even gets into this tax equation because they successfully hid their money in offshore tax havens. There's one little building in the Cayman Islands where over 18,000 companies claim to be doing business.
So the spending that gets done through the tax code is a very big treasure trove -- counting offshoring, well over 14 trillion dollars in a ten year budget period -- for those clever and connected enough to get special deals -- tax earmarks -- into the tax code.
But the Republicans don't want us to look in their treasure trove. Ali Baba's cave of tax tricks is where the juicy earmarks are for special interests. Want to know why Mitt Romney had to fiddle his taxes to get up above a 14% tax rate, a lower tax rate than a solitary hospital orderly pays, pushing a cart down the halls at night of Rhode Island Hospital? How do Romney and the hedge fund billionaires do that? Look in Ali Baba's cave, for the carried interest exception.
Want to know where Exxon Mobil, the richest and most profitable corporation in the history of the world, gets it hands into the American taxpayers' pockets? Look at the Big Oil subsidies in Ali Baba's cave.
Want to know how corporate jets get special favored tax treatment compared to the commercial jets ordinary mortals fly? Look at the accelerated depreciation schedules in Ali Baba's cave.
If using the phrase "leftist manifesto" seems a little strident, a little exaggerated, about a budget proposal for 50% spending cuts and 50% revenues, look no farther than the Republican treasure trove of corporate and special interest earmarks heaped up in Ali Baba's cave.
We are knocking at that door. We are knocking on the door of Ali Baba's cave. We're saying Americans paid in deficit reduction spending cuts of $1.8 trillion, and they'll pay in another $975 billion in cuts under our Democratic proposal. We're saying folks over $450,000 a year income saw their tax rates go up to Clinton-era levels; they're paying in another $600 billion in deficit reduction.
Now we want to go into Ali Baba's cave of tax earmarks, and out of at least $14 trillion take less than one trillion out over ten years to help reduce our budget deficit.
So the Republicans are getting very anxious. The alarms are ringing in the special interests, and the Republicans are rushing to the trenches to defend their special interests and their cherished tax earmarks. And the best defense is a good offense, and that is how a balanced deficit reduction plan, that in sum has a trillion dollars more in spending cuts than in revenues, suddenly becomes a "leftist manifesto."
[budgets comparison pie chart]
If you listened in the Budget Committee, the Republicans said it plainly. Not a penny of tax loopholes can go for deficit reduction. They say they're willing to move the treasure around in Ali Baba's cave, so long as it all gets used for corporations and the wealthy. That's not a guess, that's in the Republican budget. None of the goodies in Ali Baba's cave for deficit reduction, all of it to lower tax rates for corporations and the rich. They're willing to spread the wealth around, as long as it stays in the hands of corporations and the rich.
We are at the gates of Ali Baba's cave, the treasure trove of tax-code special deals and earmarks for the rich and the well-connected; we are at the place where the lobbyists wheel the sweet corporate tax deals. We are knocking on the door of the $14 trillion tax spending area that has been left completely untouched in deficit reduction so far, and the Republicans are getting a little twitchy. Come on fellas, out of nearly $14 trillion in tax spending and earmarks, can't we put just a little bit toward the deficit? 7%?
I thought the deficit was so important, but maybe not when compared with Republicans protecting the interests of the corporations and the rich.