The March 2005 Edition of Street Spirit

A publication of the American Friends Service Committee

 
 

National AFSC AFSC Economic Justice BOSS Website

 

 

In this issue:

Truth About Care Not Cash

Resistance to Brown's Curfew

No Millionaire Left Behind

Bush Policies Punish the Poor

Bush Rigs U.S. Society for Rich

SOS! Save Our Services

Faith Reflection on Bush Budget

Plan to End Homelessness in Ten Years

Counted Out in San Francisco

Artist Portrays Act of Giving

Berkeley Protest Demands Shelter from the Storm

Transformation of Dignity Village

George Wynn's Homeless Fiction

Poor Leonard's Almanack

Poetry of the Streets


ARCHIVES

May 2005

February 2005

 

 

 

 


 

Street Spirit is published by American Friends Service Committee.

All works are copyrighted by the authors.

The views expressed in Street Spirit are those of the individual authors alone, and not necessarily that of the American Friends Service Committee.

 

No Millionaire Left Behind

Bush's tax cuts for the rich cause huge deficits and devastating cuts in public services

by Rick Wilson

"Safety Net," by Art Hazelwood. A homeless woman huddles under the flag, the only remaining vestige of the Safety Net, in this striking image.

Like police captain Renault, played by Claude Rains in the classic movie "Casablanca," the Bush administration has been "shocked, shocked" by its recent discovery of a federal deficit problem. In just four years, the Bush administration managed to turn a projected $5 trillion surplus to a $3.8 trillion deficit for the coming decade, an $8.8 trillion swing for the worse.


The means by which this remarkable feat was accomplished were a strange combination of enacting wave after wave of tax cuts primarily for the rich, while at the same time increasing spending for war -- a fiscal policy analogous to taking gasoline out of your car while driving a long and dangerous race. Of these two factors, the tax breaks for wealthy people and corporations played the largest role.


Now, in its proposed federal budget, introduced February 7, the administration proposes drastic cuts in domestic discretionary and mandatory spending, even though these had practically nothing to do with creating the current problem.


Using Congressional Budget Office data, the Center on Budget and Policy Priorities calculates that, of the cost in 2005 of legislation enacted since 2001 that impacts the deficit, only 7 percent is due to domestic discretionary spending other than homeland security, and 8 percent is due to entitlements or mandatory spending. Increases in military spending, homeland security and international programs accounted for 37 percent. But the lion's share of 48 percent was caused by tax cuts.


When all the tax giveaways enacted in the last four years are fully in effect, the middle 20 percent of the U.S. population may gain a few hundred dollars a year but lose much more in public investments that affect the quality of life for all Americans. Meanwhile, millionaires will come out over $136,000 ahead each. Thanks to the breaks to the wealthy, federal tax revenues as a share of the national economy are at their lowest level since 1959.


To get an idea of how big the tax cuts are, here are the kinds of budget reductions that would have to be made in order to balance the budget by 2014 if they are left intact:
1. Cut Social Security by 57 percent; or
2. Cut defense spending by 72 percent; or
3. Cut Medicare by 81 percent; or
4. Cut every other U.S. program except Social Security, Medicare, defense and homeland security by 38 percent.


The tax breaks for the wealthy are so big that without them we could have met current spending levels and paid for the war in Iraq without having a serious deficit problem. In fact, they are so big that the costs of paying for them in the president's proposed budget will mean painful losses for states, local governments, education, health care, housing public services, low and moderate-income families, veterans, etc.


No American left unharmed


I'm trying to decide whether the best name for the budget would be No Millionaire Left Behind or No American Left Unharmed.


The proposed budget would cut Medicaid by $45 billion over the next 10 years, a move that would affect state budgets as well as children, very poor adults, people with disabilities and older Americans. It would reduce grants in aid to state and local governments for programs other than Medicaid by $10.7 billion from fiscal year 2005 to 2006, adjusting for inflation.

No wonder the National Council of State Legislatures has referred to the budget as "exporting the deficit."


Funding for the FIRE Act, a federal program that assists local fire departments, would be cut by 30 percent. The COPS program, which helps communities hire extra police officers, would be virtually eliminated. Water quality protection and land preservation and restoration programs would be cut. Veterans would have to pay significantly more for health care.


The community development block grant (CDBG) program would be eliminated and combined with 17 smaller grant programs at a much lower level of funding. Cities across the nation depend on the CDBG program to fund local economic development in low-income neighborhoods, homeless services, community centers, small business incubation efforts, and even fire engines and fire stations. The last time I checked, even rich folks usually want fire protection.


Over the next few years, 300,000 people, primarily the working poor, would lose food stamps. The same number of child-care slots for working adults would be lost between 2004 and 2009. Housing programs would face similar cuts. Under the Bush plan, hundreds of thousands of low-income people will lose their housing assistance. About one third of the programs the president wants to eliminate are educational. And so on.


The budget also proposes drastic changes in the federal funding process that would make cuts deeper in years to come. These include caps on discretionary spending, pay-as-you-go rules for mandatory programs that would protect the tax cuts, and a proposal to confine congressional budget legislation to non-election years.


To make matters worse, the Bush administration's budget includes some Enron-style accounting, such as not including additional costs of the war in Iraq or the trillions that the president proposes to give as welfare payments to Wall Street if he succeeds in privatizing Social Security.


Don't get me wrong. I like millionaires as much as the next person and wish them the best of luck in making it through the eye of the needle that Jesus talked about. But I don't think it's a good idea to hurt the whole country to give them even more of what they already don't need and, for the most part, haven't even asked for.


For that matter, a lot of millionaires recognize that they too have an interest in the common good and feel the same way. Some of them have even created an organization called Responsible Wealth, which is concerned about deepening inequality and works on issues of tax fairness, corporate responsibility, and living wages. Their website is www.responsiblewealth.org.


The group recently published a report titled "I Didn't Do It Alone: Society's Contribution to Individual Wealth and Success." In it, a number of wealthy people recognize that their success was made possible by public investments in education, transportation, research, a legal system, law enforcement and public safety programs, and public health -- the very things targeted in the president's budget.


The basic problem with Bush's approach to the deficit is that it's unbalanced. A responsible approach to deficit reduction would look at raising revenues as well as cutting spending. It would ensure that cuts in public spending would not fall disproportionately on children and low-income people or on state and local governments that have already been hit hard in the last four years. In the 1990s, this balanced approach to deficit reduction was adopted by both Republican President George H.W. Bush in 1990 and by Democrat Bill Clinton in 1993.


The good news is that it is still possible to prevent the worst from happening. The president's budget is only the first step. Congress is now taking up the issue. This gives an opportunity for concerned individuals and organizations as well as elected officials and public bodies to speak out for a rational and responsible budget for the good of the whole country.


Budgets aren't just about money. They are about values and people. As Jim Wallis, author of God's Politics, wrote, "budgets are moral documents, revealing our true priorities, and must be judged morally, not just economically."

Rick Wilson directs the American Friends Service Committee's economic justice program in West Virginia.


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