Today, liberals in the House of Representatives will roll out a new plan to avert the sequester. It calls for more investment in job creation as a way to generate new revenues to bring down the deficit. It calls for a mix of new revenue increases and spending cuts — all focused on defense — that would bring the overall balance between revenues and cuts in the deficit reduction of the past two years into a one-to-one ratio.
Needless to say, this plan — the creation of the Congressional Progressive Caucus — has no chance whatsoever of passing Congress. Which is exactly the point: No plan that prioritizes job creation as the best means of reducing the deficit; no plan that cuts defense while determinedly avoiding any cuts that would hurt the poor and elderly; no plan that includes equivalent concessions by both sides — could ever have a prayer in today’s Washington. It’s yet another indication of how out of whack Washington’s priorities are.
You can read the plan right here. In a nutshell, it outlines three stages of deficit reduction, two of which have already happened. The first: $1.7 trillion in spending cuts Dems agreed to as part of the 2011 debt ceiling deal that ultimately led to the sequester. The second: $737 billion in new revenues that Republicans agreed to as part of the fiscal cliff deal earlier this year.
The third stage is the key to the plan. It proposes to replace the $948 billion sequester with roughly the same amount in new revenues achieved by closing loopholes and deductions enjoyed by corporations and the wealthy. That makes a total of $3.3 trillion in deficit reduction when all three stages are taken together, evenly balanced between cuts and new revenues.
Meanwhile, the plan also invests in job creation — and pays for it by cutting defense spending. The total in defense cuts is $278 billion, which would then be plowed into infrastructure spending and other stimulus ideas in Obama’s American Jobs Act. This job creation would further reduce the deficit, while getting the economy going. The details are right here.
This plan, if it had any chance of actually passing, which it doesn’t, could actually work, says Paul Van de Water, a senior fellow at the Center on Budget and Policy Priorities. Despite Washington’s deficit mania, the CBPP has argued that the real goal should be to stabilize the deficit as a share of GDP, which makes it a less onerous task than it appears — which is the premise of this new plan, too.
“The general approach that’s laid out here does add up, with respect to what’s needed to stabilize the debt as a share of the economy,” de Water tells me. “It would leave the overall package almost evenly balanced between tax increases and spending cuts.”
It is not a partisan statement to point out, as de Water does, that this proposal is “evenly balanced,” if by “balanced,” we mean that it requires roughly equivalent concessions by both sides. It’s factual — the plan means the overall deficit reduction of the last couple years would be achieved with roughly equivalent cuts and revenues.
That such a plan has no chance of passage is only the latest sign of just how marginalized this view — that we should prioritize investing in job creation first in order to bring down the deficit — has become. You’d think the news today that CBO finds that the deficit is projected to fall to below $1 trillion in 2013 would change this a bit, but it won’t. And so, the plan’s authors are hopeful that rolling it out will at least allow the public to hear a different set of ideas and priorities from the ones emanating out of Washington daily.
“It’s time for the public to get exposed to ideas that will make the economy healthier and stronger,” Dem Rep. Keith Ellison, the co-chair of the Congressional Progressive Caucus, tells me. “The goal should be reducing unemployment and getting people back to work. Instead we get mixed up in conversations about whether we should balance the budget this year or next.”