{"id":1177,"date":"2013-03-14T12:00:16","date_gmt":"2013-03-14T18:00:16","guid":{"rendered":"http:\/\/peaceeconomyproject.org\/wordpress\/?p=1177"},"modified":"2013-03-15T12:30:29","modified_gmt":"2013-03-15T18:30:29","slug":"house-progressives-have-the-best-answer-to-paul-ryan","status":"publish","type":"post","link":"https:\/\/peaceeconomyproject.org\/wordpress\/house-progressives-have-the-best-answer-to-paul-ryan\/","title":{"rendered":"House Progressives have the best answer to Paul Ryan"},"content":{"rendered":"

by Ezra Klein, Washington Post
\nclick here for original article<\/a><\/p>\n

The correct counterpart to the unbridled ambition of the Ryan budget isn\u2019t the cautious plan released by the Senate Democrats. It\u2019s the \u201cBack to Work<\/a>\u201d budget released by the House Progressives.<\/p>\n

The \u201cBack to Work\u201d budget is about exactly what the name implies: Putting Americans back to work. The first sentence lays it out clearly: \u201cWe\u2019re in a jobs crisis that isn\u2019t going away.\u201d So that\u2019s the budget\u2019s top priority: fixing the jobs crisis.<\/p>\n

It begins with a stimulus program that makes the American Recovery and Reinvestment Act look tepid: $2.1 trillion in stimulus and investment from 2013-2015, including a $425 billion infrastructure program, a $340 billion middle-class tax cut, a $450 billion public-works initiative, and $179 billion in state and local aid.<\/p>\n

That\u2019s\u2026a lot of stimulus. More than Congress passed in 2009, in fact. The liberal Economic Policy Institute\u00a0estimates<\/a>\u00a0that would be sufficient to \u201cboost gross domestic product (GDP) by 5.7 percent and employment by 6.9 million jobs at its peak level of effectiveness (within one year of implementation).<\/p>\n

That estimate is based, in part, off multipliers from Moody\u2019s economist Mark Zandi. But over e-mail, Zandi told me he\u2019s not comfortable with these results. \u201cThe April 2011 multipliers used in this analysis will overstate the economic benefit of a stimulus proposal, particularly of this size,\u201d he wrote. \u201cThe size of the multipliers depend on the size of the output gap. The smaller the gap, the smaller the multipliers. The output gap has narrowed over the past 2 years.\u201d<\/p>\n

Zandi also questioned whether so much stimulus is still needed. \u201cI\u2019m uncomfortable with such a massive stimulus plan at this time. The private economy is kicking into a higher gear, and it\u2019s time to let it do its thing.\u201d<\/p>\n

Whether the system could absorb that much stimulus is also a difficult question. In the December 2008 memo Larry Summers sent President-elect Barack Obama on the stimulus, he\u00a0wrote<\/a>, \u201cit is important to recognize that we can only generate about $225\u00a0billion of actual spending on priority investments over next two years, and this is after making\u00a0what some might argue are optimistic assumptions about the scale of investments in areas like\u00a0Health IT that are feasible over this period.\u201d<\/p>\n

That was, again, back in 2008. Since then, many of the most obvious projects have been completed. So the House Progressives are proposing a much greater amount of infrastructure investment at a moment when there are likely fewer plausible projects.\u00a0Many jobs will be created. But it\u2019s also possible that many dollars will be wasted on poor projects.<\/p>\n

Investment on this scale will add trillions to the deficit. But the House Progressives have an answer for that: Higher taxes. About $4.2 trillion in higher taxes over the next decade, to be exact. The revenues come from raising marginal tax rates on high-income individuals and corporations, but also from closing a raft of deductions as well as adding a financial transactions tax and a carbon tax. They also set up a slew of super-high tax rates for the very rich, including a top rate of 49 percent on incomes over $1 billion.<\/p>\n

But to the House Progressives, these taxes aren\u2019t just about reducing the deficit \u2014 though they do set debt-to-GDP on a declining path. They\u2019re also about reducing inequality and cutting carbon emissions and slowing down the financial sector. They\u2019re not just raising revenues, but trying to solve other problems. But they might create other problems, too. Adding this many taxes to the economy all at once is likely to slow economic growth.<\/p>\n

As for the spending side, there\u2019s more than $900 billion in defense cuts, as well as a public option that can bargain down prices alongside Medicare. But this budget isn\u2019t about cutting spending. Indeed, the House Progressives add far more spending than they cut.<\/p>\n

\"murrayryanprog4-800x530<\/a><\/p>\n

Is the House Progressives\u2019 budget likely? Of course not. One involved staffer described it to me as a \u201cwish list.\u201d But that makes it the perfect analogue to Ryan\u2019s budget.<\/p>\n

Consider what Ryan\u2019s budget asks President Obama to sign into law: the repeal of Obamacare, his signature law. A voucherization of Medicare. A plan that would cut deep into both food stamps and Medicaid and then convert those programs, perhaps the two most important components of the safety net, into block grants managed by the states. A revenue-neutral tax reform that would leave only two brackets \u2014 one at 10 percent, the other at 25 percent.<\/p>\n

It\u2019s a fantasy budget, completely untethered from real-world concerns about what could pass, or what will be acceptable to the party that got more votes in the last election and currently controls both the White House and the Senate. When Chris Wallace, the host of \u201cFox News Sunday,\u201d pointed this out, Ryan replied, \u201cWell, we believe it should [happen]. That\u2019s the point. This is what\u00a0budgeting\u00a0is all about, Chris. It\u2019s about making tough choices to fix our country\u2019s problems.\u201d It\u2019s a vision, in other words, not a plan.<\/p>\n

Ryan\u2019s budget is a conservative wish list for solving the problems that animate today\u2019s conservatives: The growth of the federal government\u2019s domestic programs, the rising debt, the increasingly complex tax code, and the sluggish economy. The House Progressive Caucus\u2019s \u201cBack to Work\u201d budget is the precise mirror image. It\u2019s a liberal wish list for solving the problems that animate today\u2019s liberals: High unemployment, entrenched economic inequality, and global warming. And just as Ryan\u2019s budget not only eschews tax revenues, but also lowers tax rates, the House Progressives don\u2019t just eschew net spending cuts, they actually increase spending.<\/p>\n

That makes both budgets different than the efforts of\u00a0Senate Democrats<\/a>\u00a0and\u00a0the White House<\/a>, who have proposed plans \u2014 though the White House\u2019s full budget hasn\u2019t yet been released \u2014 that attempt to build in a substantial amount of compromise. Both have proposed a mix of tax increases they like and spending cuts they don\u2019t like. Both plans reflect the basic pitfalls of compromise in a polarized age: They sand off the most important insights of both parties, and make incremental progress on problems that need more radical solutions.<\/p>\n

Comparatively, both Ryan and the House Progressives are offering much sharper, more bracing, and more ambitious efforts. They have identified what they consider the country\u2019s core problems and laid out an uncompromising vision for how they would like to see them fixed. And that\u2019s fine for the House Progressives. The House Progressives don\u2019t need to govern. The House Republicans do.<\/p>\n

While the House Progressives\u2019 fantasyland, no-compromise effort is the illustrative position of a group of minority progressives, Ryan\u2019s fantasyland, no-compromise effort is the official position of most every Republican. For there to be a deal, the House Progressives don\u2019t need to learn how to compromise, though their voting record over the last couple of years shows they\u2019re willing to do it anyway. But the House Republicans do need to learn to compromise, and there\u2019s not much evidence they\u2019re there yet.<\/p>\n","protected":false},"excerpt":{"rendered":"

by Ezra Klein, Washington Post click here for original article The correct counterpart to the unbridled ambition of the Ryan budget isn\u2019t the cautious plan released by the Senate Democrats. It\u2019s the \u201cBack to Work\u201d budget released by the House Progressives. The \u201cBack to Work\u201d budget is about exactly what the name implies: Putting Americans […]<\/p>\n","protected":false},"author":1,"featured_media":1178,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"nf_dc_page":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[8],"tags":[],"class_list":["post-1177","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"aioseo_notices":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/peaceeconomyproject.org\/wordpress\/wp-content\/uploads\/2013\/03\/infrastructure-budget.jpg?fit=606%2C404&ssl=1","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/posts\/1177","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/comments?post=1177"}],"version-history":[{"count":3,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/posts\/1177\/revisions"}],"predecessor-version":[{"id":1183,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/posts\/1177\/revisions\/1183"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/media\/1178"}],"wp:attachment":[{"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/media?parent=1177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/categories?post=1177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/tags?post=1177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}