I referred briefly in a post the other day to a budget proposal released by the House Progressive Caucus called The People's Budget (pdf). In light of President Obama's speech today I though it was worth a bit more discussion.
For starters its worth stacking it up against the competition. The republican Ryan plan is full of gimmicks and very funny math that even some conservative economists don't buy it.
Obama, though there are not a lot of details of his plan, seems to have some gimmicks too. The one that jumped out on me is the perennial favorite of "triggers" which require automatic spending cuts if Congress does not cut the budget to some specified amount by some specified date. Of course the Congress down the road can just undo this so its fairly bogus.
The People's Budget on the other hand seems legit in this sense. The Economic Policy Institute has done an analysis that is worth a read. Moreover, as Jeffrey Sachs points out in the Huffington Post, if you look at public opinion polls, the People's budget reflects what the American public actually wants.
So what does the People's Budget do? There is actually quite a bit of detail so I would encourage to take a look, but here are some of the highlights from the Progressive Caucus website
The CPC proposal:How they do it is the more interesting part, and again I'd suggest reading the whole thing but here is my view of the key bits.
• Eliminates the deficits and creates a surplus by 2021
• Puts America back to work with a “Make it in America” jobs program
• Protects the social safety net
• Ends the wars in Afghanistan and Iraq
• Is FAIR (Fixing America’s Inequality Responsibly)
What the proposal accomplishes:
• Primary budget balance by 2014.
• Budget surplus by 2021.
• Reduces public debt as a share of GDP to 64.1% by 2021, down 16.5 percentage points from
a baseline fully adjusted for both the doc fix and the AMT patch.
• Reduces deficits by $5.6 trillion over 2012-21, relative to this adjusted baseline.
• Outlays equal to 22.2% of GDP and revenue equal 22.3% of GDP by 2021.
- Taxes - eliminate the Bush tax cuts; implement Congresswoman Jan Schakowsk's millionaire's tax (which I have also mentioned before; implement a variety of measures to make taxes fairer; make corporations actually pay taxes
- Health Care - Do what Obama said he would do - a public option and let medicare negotiate with drug companies.
- Social Security - raise the tax cap to 90% of income
- Defense - End the wars. Do it responsibly, but really do it (half of which is another Obama campaign promise)