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Sen. Carl Levin: We can reduce the deficit and protect the middle class

Published 11:43pm Wednesday, October 5, 2011

Over the next several months, Congress faces a complex and difficult duty. We must agree to legislation that will reduce the deficit by at least $1.2 trillion over the next decade. Under the budget agreement we passed in July, if we fail to hit that goal, huge automatic budget cuts in vital national programs will take effect, cuts I believe are unacceptable. Ever member of Congress and I must do our best to avoid that outcome, beginning with the 12 members of the Joint Select Committee on Deficit Reduction who have been assigned the job of crafting a plan.
Despite the difficulty, this task is achievable. We can reduce the deficit, avoid devastating cuts to important programs, and avoid greater harm to middle-class families that have seen their incomes stagnate or even fall over the last decade. In hopes of moving that process forward, I have sent the Joint Select Committee a letter outlining a seven-point plan for deficit reduction that will require sacrifice not just from middle-class families, but from all Americans.
Central to my proposals is a belief that we cannot achieve real deficit reduction with spending cuts alone. We must restore revenue as well. A little historical perspective might be helpful. Federal revenues today are the lowest share of gross domestic product in generations:  just 14.9 percent. And past efforts to reduce high deficits have made new revenue a significant part of the equation. President Reagan, for example, presided over three deficit reduction plans that achieved more than three-quarters of their deficit reduction through revenue increases.
Apart from history, the simple mathematical reality is that we must generate additional revenues. Don’t just take my word for it. Listen to the nonpartisan Concord Coalition, a budget reform group, which recently said: “For a ‘grand bargain’ on deficit reduction, finding a way to bring in some revenue is a crucial piece of the puzzle.”
So revenue needs to be part of the Joint Select Committee’s agenda. My letter identifies seven possible steps to eliminate wasteful tax loopholes and special breaks so as to share the burden of deficit reduction more broadly.
The first two proposals would close two kinds of unjustified loopholes that benefit corporations and wealthy individuals at the expense of working families: offshore tax shelter abuses that cost American taxpayers billions of dollars a year, and a loophole that forces American taxpayers to subsidize the stock options that corporations grant to their executives.
The third and fourth proposals would close two Wall Street tax loopholes: the “carried interest” loophole that leaves American taxpayers subsidizing the paychecks of hedge fund managers, and a tax loophole for financial derivatives that promotes speculation over long-term investments that boost economic growth.
The fifth and six proposals would promote tax fairness and ensure shared sacrifice in reducing the deficit by restoring upper-bracket income tax rates to pre-Bush levels and capital gains tax rates to rates closer to those in place under President Reagan.
The seventh would eliminate the use of paper tax liens and create an electronic database of those liens.
Combined, these commonsense changes could reduce our deficits by $1 trillion over the next 10 years – a sum that would make the committee’s difficult goal, one the Congress and the entire government share, much more achievable.
To those who would automatically reject revenue increases for deficit reduction, I would say that the spending cuts that will be necessary for significant deficit reduction will be difficult as well. They will have a real impact on important programs, and probably I won’t like many of them. But just as I will have to compromise on some spending cuts, others will have to compromise and accept the reality that revenue must be part of the equation.
The ideas I have proposed outline a path toward such a compromise. It is a fair path. If Congress is willing to embrace compromise, we can reduce our deficit while helping to protect middle-class families from further economic harm. If some are not willing to compromise, the automatic cuts that would take effect as a consequence of our failure to agree will make our country less safe and the livelihoods of our families less secure. I hope my proposals will help us work together to avoid that unacceptable outcome.

Carl Levin is the senior U.S. senator from Michigan.

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  • Username75

    Can we protect the middle Class….NO!
    This class Warfare started Years ago,
    when We went to war against the Poorest among us.
    they lost out, as they had no power, as they
    couldn’t afford anyone to lobby for them.
    This insanity started, When We pointed at the Poorest,
    and blamed them for their plight of being needy.
    We Even Convinced the Blue Collar Workers, to hate the poor.
    Then when they were cut out of our Economy, we went after
    the blue Collar Workers, and their unions, to
    Get rid of their Power.
    with the Backing of the middle Class.
    Soon the War is the Middle Class, get rid of them,
    and all You have left is the powerless poor.
    they have already been defeated , many times before,
    By the True Believers in the Insane trickle
    down theories.
    It’s never worked before in our History, and they
    Hope maybe this time they will get it right.
    It only worked once in History, to enrich, and empower
    the Hapsburgs, and their empire, of which only De Beers
    remains today.
    the simple truth is You reap what you sow,
    and pay backs are a mother.
    The Rich get rich, and the poor get poorer,
    by dividing the poor, against the poorest.
    this is how we got racial hatered as the history
    of the South.
    maybe they Miss their slaves, and want them Back
    who knows, but polatics is bought and sold by the rich,
    and to heck with anyone else.
    Tell a lie to the masses long enough they will believe it.
    For they care not to see around them What is really happening, it gets in the way of monday night football.

  • Username75

    Why should the Poor, stand up to
    protect the middle Class, when, the Middle class
    Sided with the Rich, against the poor.
    now they too are at the Edge of poverty, they think
    others should protect them?
    why, because all they stood for was themselves?
    Maybe Wage slavery, and a Caste System will do us good.
    we will then have a permenate “Untouchable” class to Curse at, and blame for all our Woes.
    We certainly wouldn’t want to look into the
    human Heart, and see the Evil of greed.

  • Username75

    We should not look at greed, as we are built upon it.
    In our society. We do not think of a government to
    Protect us from all enemies, Foreign and Domestic
    Our government is the Tool of Wall street, it is not
    for people, but for Corporations listed on
    the Marketplace of Wall street.
    It should not Regulate, for the Protection of People,
    but to protect profits.
    not to protect it’s People,and People are but tools,
    as long as they are cost effective.
    A well regulated economy would, protect it’s Jobs,
    and produce it’s own needs with it’s own products,
    and Natural resources.
    those are all for sale to the Highest Bidder, in
    this Unbridled capitalistic society, that we shall
    tinkle Down to our poor.
    some win, Some lose, and in the End WE ALL LOSE.
    Will the winners turn out the lights when they leave.
    Sam Taylor

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