To pay for vital programs, Congress must make tough choices

March 26, 2009

- Deborah Weinstein is the executive director of the Coalition on Human Needs. The opinions expressed are her own -

As the House and Senate Budget Committees begin work this week on their versions of the Congressional Budget Resolution, the usual suspects are lining up to oppose proposals that would pay for health care reform, reduce global warming, create more jobs and improve our education system. Beyond the expected Republican opposition, however, some key Democrats are also calling for changes that would seriously weaken Presidents Obama’s groundbreaking budget.

Although the chairs of the House and Senate Budget Committees are expected to craft resolutions that remain faithful to the President’s priorities, many of the revenue sources proposed by Obama are being called into question.  Further, the skittish-on-spending Blue Dog Democrats in the House and similarly inclined Senate Democrats are urging reductions in domestic appropriations, which pay for education, job training, housing, child care and child welfare services, public health, and other family and community services.

Last week’s significantly increased deficit projections from the Congressional Budget Office have provided further ammunition for those waving the banner for reduced domestic spending. In large part because the economy worsened dramatically since the Obama Administration prepared its budget, CBO projected a deficit of $1.4 trillion for fiscal year 2010 compared with the Obama budget estimate a $1.17 trillion.

As serious as the deficit is, cutting domestic appropriations is not the answer. These programs contribute minimally to the deficit, and are crucial to pulling our country out of the deepest recession in decades and creating long-term economic stability for all Americans. And while cutting waste in such areas as Medicare, military contracts and farm subsidy programs are important sources of potential savings, they won’t provide enough to fund the desperately needed shift in priorities called for under President Obama’s budget.

Instead, those who criticize the President’s proposals must come up with fair and responsible alternatives for increasing revenues and reducing the deficit over time.

The President’s budget provides a blueprint for doing just that. To pay for health care reform, for example, Obama proposes funding his $634 billion expansion of health care, which would take a giant step towards quality care for most Americans, in part by lowering the value of income tax deductions for the wealthiest households (those making more than $250,000 a year) from 35 cents on the dollar to 28 cents.  This change, which brings the rate back to what it was during the later part of the Reagan Administration, would produce $318 billion in savings over the next 10 years. When combined with the Obama budget’s $316 billion in projected savings from reduced payments to expensive private plans, it would cover much of the cost of the health care reform plan.

Although 98.8 percent of tax payers would be unaffected by the change, opposition in Congress has been swift, much of it claiming that reducing the itemized deduction for a very small segment of wealthy households would lead to a reduction in charitable giving. However, the Center on Budget and Policy Priorities found that there would be little impact, with charitable giving dropping by an estimated 1.3 percent. It also found the lower deduction rate would have a minimal effect on home-buying and home construction.

Many of the same Congressional leaders who have expressed opposition to reducing the deduction rate are also supporters of health care reform. Yet few have suggested a better way to pay for it.

Similarly, critics of the President’s proposal to reduce global warming by auctioning off permits to businesses that pollute have yet to explain how they would come up with the needed revenue. In addition to limiting greenhouse gas emissions, the plan would raise $65 billion in revenue to pay for permanent expansion of tax credits that reach the lowest-income families. These credits would reimburse families for the increasing costs of energy that will accompany efforts to reduce greenhouse gases and provide an important financial boost for the poorest families.

It is no longer acceptable for our political leaders to avoid making the tough choices when it comes to supporting government programs that make a difference to millions of people in need. Short term political gain may come to some of those who rail against increased domestic spending.  But the price will be a bleaker economic future for all Americans.

Click here to read a related opinion column, “Trillion-Dollar Deficits Are Not the Answer” by Diana Furchtgott-Roth, a senior fellow at the Hudson Institute.

22 comments

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Apparently, the author of this opinion and the last two posters have lost sight of what happened to our country as a result of tax cuts, not government spending, since 1982. Our economy, under the philosophy of giving the money back to those who earned it, has created approximately 35-36 million jobs (net of the 1.4 million we lost in the last 6 months)!! That’s why the geniuses (the Founders, not Pres Obama) that set up this capitalistic economy wanted a small gov’t. and a free, self-reliant citizenry, not a Marxist/socialist concept, which the writer of this article either ideologically or ignorantly fails to realize. The policies she is championing will lead us in the Marxist/Socialist direction! She should do some research on comparisons of other countries with socialized health-care programs to ours (see 3/26/09 Investor Business Daily article presenting “factual” comparisons). Also try and review the body of scientists, not from the UN, who disagree with the “global warming treatise”. The university of Wisconsin (hardly a bastion of “conservative” thought) just published a study indicating the earth will cool for the next 20-30 years and then global warming will accelerate! The climate scientists we rely on for “global warming” scenarios couldn’t tell us how high the Red River would rise in 2-3 days, much less that Manhattan will be under water in 50 years!! Why tax our US industry at this time(and pass on the estimated cost of $3100/annually to all energy consumers-yes, even those who don’t pay “taxes”)when it is struggling mightily as a result of ORGANIZED BIG GOVERNMENT regulation and the greed of a few?
The policies espoused in this article will render our great American society bankrupt in 10 years, which will have a devastating effect on us all.

Posted by tom914 | Report as abusive

The Republican argument about reduction in charitable giving is preposterous. Nobody should depend on charity. The fact that there is charity, and that some people have come to depend on it, is a symptom of how polarized the society is, of the wide inequality created by the “free market”. Yeah, don’t reform the system so we can keep fleecing the sick; this way when they end up bankrupt because of their medical problems, they can come to us for charity, and we’ll give them, if we feel like it”.

Posted by Andy | Report as abusive