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This Budget Deal Smells

April 11, 2013

Normally, in American politics, Democratic and Republican politicians come to compromises where each party gives its constituents something they want.

In the Republicans’ case, that usually means lower taxes (especially lower corporate taxes) and less regulation on businesses.  It can also mean higher spending on the military.

In the Democrats’ case, that usually means increased spending on public goods, such as healthcare and education.  It can also mean tax cuts specifically targeted at people who don’t make a ton of money.

But in this case…

a Democratic politician (Obama)

is trying to cut a deal wherein he will reduce federal benefits for retired and disabled people that have remained untouched for decades (Social Security)

in return for higher taxes on the wealthy, which is one of the better ways to reduce the deficit, yes, but can anyone put it in their pocket?  No.

Actually, he really wants to reduce benefits for retired and disabled people AND implement a highly regressive tax hike on middle class and low-income working people – according to the budget overview released by the White House, they’re “using a chained measure of inflation for cost-of-living adjustments throughout the Budget,” (emphasis mine) “with protections for the most vulnerable” – no word on what exactly those protections are.

Now mind you, Obama’s budget proposal doesn’t entirely suck.  There’s a long-overdue increase in the minimum wage, to $9/hour.  There’s increased investment in highway and bridge repair, and in scientific research.  There’s also another proposal I’m kind of iffy about, namely a universal preschool program funded by a tax on tobacco.  It’s the kind of thing I would have been wholeheartedly behind when I was a teenager – I mean obviously this country is way overdue to have universal preschool, and I don’t smoke, in fact just being around people smoking makes me physically sick – but having experienced life as a member of the working poor, I’m now not so sure it’s a great idea, because tobacco taxes are deeply regressive.  They’re a sales tax – regressive in itself because it’s not tied to income – and also, from what I can see anecdotally, the number of smokers seems to go up the lower you go on the socioeconomic scale.  Which I can understand on a personal level too, as someone who’s struggled on and off with binge eating.  We all have addictive behaviors we turn to under stress, and if you’re lower-income you’re going to have more stress, and it’s not like you can relieve it by taking a vacation or going to a spa or doing “retail therapy” the way the women’s magazines all seem to assume you should do.

But really…cutting Social Security?  I smell a rat here.  This is political suicide for the Democrats if the Republicans actually take the deal.  It’s classic austerity: raise taxes on everybody, cut spending on everybody.  Which of course is supposedly going to reduce the debt, but actually ends up killing the economy.  I advise readers to follow very closely which politicians get behind this stinking cow pie of a budget “deal”, and see how much they’re getting in campaign donations from the finance sector.  I think the results will be very revealing.


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