1 Jeffrey Sachs: The People's Budget
2 Seven Things a Government Shutdown Would Cost Us

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The People's Budget

By Jeffrey Sachs 
Economist and Director of the Earth Institute, 
Columbia University 
Huffington Post 
April 8, 2011
http://www.huffingtonpost.com/jeffrey-sachs/the-peoples-budget_b_846573.html

Just when it seemed that all of Washington had lost its
values and its connection with the American people, a
bolt of hope has arrived. It is the People's Budget put
forward by the co-chairs of the 80-member Congressional

Progressive Caucus. Their plan is humane, responsible,
and most of all sensible, reflecting the true values of
the American people and the real needs of the
floundering economy. Unlike Paul Ryan's almost absurdly
vicious attack on the poor and working class, the
People's Budget would close the deficit by raising
taxes on the rich, taming health care costs (including
a public option), and ending the military spending on
wars and wasteful weapons systems.

There are now four budget positions on the table. Far
to the right is Paul Ryan's plan, an artless war on the
poor that would take a meat-cleaver to Medicaid (health
care for the poor), food stamps, support for child
care, the environment, and the rest of government other
than the military, Social Security, and Medicare (that
is, until 2022, when the slashing would begin on
Medicare coverage as well). Ryan would keep taxes below
20 percent of GDP (specifically, 19.9 percent of GDP in
2021), at the cost of destroying entitlements programs
and other civilian spending.

Then there is President Obama's budget, which is really
a muddled proposal in the center-right of the political
spectrum. It would keep most of the Reagan-era and
Bush-era tax cuts in place. Like the Ryan proposal,
Obama's tax proposals would keep total taxes at around
20 percent of GDP. The result is a major long-term
squeeze on vital programs such as community
development, infrastructure, and job training. Also,
Obama's plan never closes the budget deficit, which
remains as high as 3.1% of GDP in 2021.

In the progressive middle is the People's Budget. Like
Ryan's plan, the People's Budget would cut the budget
deficit to zero by 2021, but would do so in an
efficient and fair way. It would close the budget
deficit by raising tax rates on the rich and giant
corporations, while also curbing military spending and
wrestling health care costs under control, partly by
introducing a public option. By raising tax revenues to
22.3 percent of GDP by 2021, the People's Budget closes
the budget deficit while protecting the poor and
promoting needed investments in education, health care,
roads, power, energy, and the environment in order to
raise America's long-term competitiveness. The People's
Budget thereby achieves what Ryan and Obama do not: the
combination of fairness, efficiency, and budget
balance.

The fourth position is the public's position. The
Republicans often say that they want Congress to
respect the voice of the people. The voice of the
people is crystal clear. In one opinion survey after
the next, the public says that the rich and the
corporations should pay more taxes. The public says
that we should tamp down runaway health care costs
through a public option, one that would introduce
competition to drive down bloated private health
insurance costs. The public says that we should get out
of Iraq and Afghanistan and reduce Pentagon spending.

(Just yesterday, Defense Secretary Gates let loose the
predictable Pentagon canard that we should stay in Iraq
if the Iraqi government asks for it. Better yet, we
should respond to what the American people are asking
for: to bring our troops home).

The fact is that the People's Budget is the public's
position. That's why it is truly a centrist initiative,
at the broad center of the U.S. political spectrum.

Ryan reflects the wishes of the rich and the far right.
Obama's position reflects the muddle of a White House
that wavers between its true values and the demands of
the wealthy campaign contributors and lobbyists that
Obama courts for his re-election. Many Democrats in
Congress have also gone along with the falsehood that
deficit cutting means slashing spending on the poor and
on civilian discretionary programs, rather than raising
taxes on the rich, cutting military spending, and
taking on the over-priced private health insurance
industry. Only the People's Budget speaks to the broad
needs and values of the American people.

The current budget negotiations have been a dialogue
among the wealthy. The big debate has focused on which
programs for the poor should be axed first. There has
been no discussion of raising taxes on the rich, and
quite the contrary, the White House and the Republican
leadership agreed to further tax cuts last December.
Obama has repeatedly expressed regret at slashing
community development, energy support for the poor, and
other programs, but he is not fighting the trend, only
regretting it.

Most of Washington has stopped listening to the people.
Campaigns are now so expensive that most politicians do
anything to court the favor of the rich. Yet ultimately
the public will prevail. Twice before in American
history -- during the Gilded Age of the 1880s and in
the 1920s, just before the Great Depression -- big
corporate money effectively owned Washington. But in
both eras great progressive leaders (including the two
Roosevelts, Theodore and Franklin) came along to
restore the true meaning of American democracy: a
government truly of the people, by the people, and for
the people. With public protests against government by
the rich now spreading in Wisconsin, Ohio and beyond,
and with the launch of the People's Budget by the
Congressional Progressive Caucus, a great national
movement to restore American democracy has begun.

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Seven Things Americans Will Lose If the Government Shuts
Down

Closure Would Be Costly, Wasteful, and Harmful

    The government shutdowns forced in 1995 and 1996
    were costly, wasteful, and harmful to the American
    people. But it's likely that the consequences will
    be far worse if a shutdown occurs in 2011 because
    more Americans are unemployed, below the poverty
    line, and reliant on government assistance to make
    ends meet.

Center for American Progress

April 8, 2011

http://www.americanprogress.org/issues/2011/04/seven_things.html

The threat of a government shutdown still looms. The House
and Senate are unable to agree on a federal budget for this
fiscal year, and if the two sides cannot come to terms by
midnight we will face a shutdown on a scale not seen since
Republicans last forced one in 1995 and 1996.

A government shutdown would be disastrous. It would disrupt
the lives of millions of Americans while slamming the brakes
on our recovery from the recession. Here are seven ways a
government shutdown will hurt the American people, based on
the consequences of the 1995 and 1996 shutdowns:

1. Social Security: Because Social Security checks are
deemed essential they should continue to be mailed in the
event of a shutdown. New Social Security applications will
likely go unprocessed, however, as was the case in the
previous shutdown. Depending on the length of the shutdown
this could be seriously problematic for our nation's
seniors.

2. Veteran's services: Republicans claim to support our
troops, but forcing a government shutdown would be bad news
for nation's veterans, many of whom may lose access to vital
veteran's services. Health, welfare, finance, and travel
services were all curtailed in 1996.

3. Health services: Forcing a government shutdown would put
a pause on a number of important health services. In 1996
the National Institute of Health stopped taking new patients
for clinical trials, the Center for Disease Control stopped
disease surveillance, disease hotlines weren't answered, and
cleanup work stopped at 609 toxic waste sites.

4. Taxpayer dollars: Shutdowns are a huge waste of taxpayer
money: Estimates put the minimum loss in 1996 at somewhere
between $700 million and $800 million dollars in backed
salaries paid to furloughed employees. Given that the
economy was much more robust in 1996 than it is now, it is
likely that a shutdown in 2011 would have an even worse
economic impact - not something we need in the recovery
phase of a recession.

5. National parks: National parks would be among the first
places to close if the government shuts down. Three hundred
and sixty-eight national parks closed in the 1995 and 1996
shutdown. They lost 7 million visitors and $14.2 million per
day in tourist revenues.

6. Museums: National museums would likewise be closed in the
event of a government shutdown. They were closed in the 1995
and 1996 shutdowns and lost an estimated 2 million visitors.

7. Passports: Over 200,000 passport applications went
unprocessed during the fiscal year 1996 shutdown. The same
applies for foreigners wishing to travel to the United
States: An additional 20,000 to 30,000 daily visa
applications also went unprocessed.

In short, the shutdowns forced in 1995 and 1996 were costly,
wasteful, and harmful to the American people. But it's
likely that the consequences will be far worse if a shutdown
occurs in 2011. The economy was comparatively stronger in
the mid `90s and therefore more resilient against the
effects of a government shutdown. Today, as a consequence of
the Great Recession, more Americans are unemployed, below
the poverty line, and reliant on government assistance to
make ends meet. With that in mind, forcing the closure of
many government programs and agencies would be a reckless
display of political bravado.

We need a responsible budget that balances fiscal discipline
with the need to invest in America's human and physical
capital. President Barack Obama's budget works toward that
end. We hope that Republicans and Democrats are able to find
common ground around a budget that intelligently and
efficiently allocates government money in a manner most
conducive to economic recovery.

For more on this topic see:

11 Ways The Tea Party-Inspired Shutdown Will Hurt The
Economy by Pat Garofalo (CAP Action Wonk Room)
http://wonkroom.thinkprogress.org/2011/04/07/ways-shutdown-hurts-economy/ 

How a Shutdown Would Affect Our Military by Lawrence J.
Korb, Rudy deLeon, Laura Conley
http://www.americanprogress.org/issues/2011/04/shutdown_military.html

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