An Intelligent (and Humane) Approach to Deficit Reduction

Everyone should take a close look at The People’s Budget, published on the website of the Congressional Progressive Caucus. It is very readable and it offers a reasonable and humane alternative to both the Ryan and the Obama plans for deficit reduction. The People’s Budget would significantly reduce defense spending, and would repeal most of the Bush Tax Cuts and other tax preferences that primarily benefit the rich, so it actually would balance the federal budget by 2021—something neither the Ryan plan nor the Obama plan achieves. And it does this without ripping apart our social safety net. 

Economist Paul Krugman introduced this plan to the public in his New York Times column on April 24 and in a longer blog the same day. Krugman points out that this would mean higher taxes, mostly on wealthier taxpayers who have seen their taxes decline as their share of incomes have increased, but also on the upper middle class, although to a much lesser extent. However, tax rates, including state and local taxes, would still be far less than the rates in European countries.

The People’s Budget is focused on eliminating the deficit by 2021, so it doesn’t address so much the long-term increase in the cost of health care, which we will have to tackle after that date. But it does permit the government to bargain with drug companies for lower costs, adds a public plan to better compete with private health plans, and of course would not repeal all the health care cost containment provisions of the Affordable Care Act.

In short, the People’s Budget is the solid, easy-to-follow alternative to the draconian Ryan plan and the painful, if more sensible, Obama plan.  Please take a look and, if you agree, spread the word!

Nick Estes is a Deputy Policy Director at NM Voices for Children