Fiscal Showdown Cuts Have Consequences for Southern Indiana

I was part of a labor delegation that visited Representative Todd Young on September 18 in Bloomington. Our goal was to get him to join the 88 Congressional co-sponsors of the “Bring Jobs Home Act” (HR 5542), which would end tax loopholes that reward companies that ship jobs overseas. We didn't succeed.

But more to the point: at meeting’s end, we shared a new report by the nonpartisan Congressional Research Service. Based on data for the past 65 years, CRS found that “the reduction in the top tax rates have had little association with saving, investment, or productivity growth. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.” (See: http://tpmdc.talkingpointsmemo.com/PDF/0915taxesandeconomy.pdf).

What this means is that raising revenue by making the wealthy pay more taxes can help reduce the deficit, while (modestly) shrinking the income gap—and without negatively affecting economic growth.

Representative Young was impressed, voicing respect for the integrity of the CRS. In the weeks that followed, though, Young’s Republican colleagues in the Senate successfully pressured the CRS to withdraw its report. They felt inconvenienced by its rebuttal of a central (fallacious) tenet of conservative economic theory.

Now the “2012 budget showdown” is upon us. South-Central Indiana Jobs with Justice urges Representative Young, Senators Coats and Lugar, and Senator-elect Donnelly to end the Bush tax cuts for the richest 2% and to make sure Wall Street corporations are paying their fair share. Otherwise, we won’t be able to protect education, Medicare, and Medicaid from another round of deep cuts.

A misguided “austerity agenda” has dire consequences for working families across the country, including:
•    Cuts and changes in Medicare and Medicaid that will force families to assume a higher share of health care costs;
•    An increase in the retirement age and other structural changes in Social Security that will reduce benefits for future retirees;
•    Radical cuts in federal support for education, transportation, clean energy, and other long-term investments in the nation’s common assets; 
•    A contraction in public spending that would snuff out our flickering economic recovery and raise unemployment.

A clear message from our recent election is that Americans want their fiscal house put in order. But the budget must not be balanced on the backs of working families and the working poor. Nor should it be balanced in ways that benefit the financial interests largely responsible for our current predicament. A just and sensible approach that makes corporate America clean up its own mess is what a majority of Americans demand from their representatives in Congress.
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John Clower
Facilitator, South-Central Indiana Jobs with Justice

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