Okay, my liberal friends. On Friday I explained why the proposals of the Simpson-Bowles commission should be welcomed, and put on the bargaining table by conservatives. Today I will argue, despite what Paul Krugman says, that there’s good stuff for liberals too.
Remember, first and foremost, that this is a starting point. You don’t have to buy into everything to keep the conversation going. And beware misinformation.
Take, for example, the proposal to eliminate the mortgage interest deduction in return for lower tax rates. Several of my Democratic friends have objected to this, loudly.
But read closely and you will see that two of the four suggested plans that Simpson and Bowles offer to reform the tax system actually maintain the mortgage interest deduction. The chairmen offer a menu of options to get to flatter rates, not an imperial order.
As I noted last week, I have serious reservations about making folks work to 69 to claim full Social Security benefits. It’s a literally painful demand to make of someone who has a desk job, much less an aging laborer. Yes, age expectancy is growing--because we are keeping old folks with debilitating illnesses alive longer, not because we have found some elixir that frees 69-year-olds from cancer, arthritis, or heart disease.
But, again, read the fine print, not the media shorthand. Bowles and Simpson suggest that we gradually raise the age to 69--in the year 2075! Who knows what the quality of life for today’s children will be then? Or our economic situation. And the proposal includes a hardship exemption for workers who can’t keep fixing cars and refrigerators, moving pianos, or building houses past the age of 62. There’s lots of ways for liberals to toy with this.
So, here are my reasons why the left should not declare the report dead on arrival.
- It builds upon Obamacare, and would lock the hard-won healthcare reform plan in place. And 40 million, mostly working class Americans, will indeed get coverage. [Read more about healthcare reform.]
- It saves Social Security. No wacky private accounts, with billions in fees heading to Wall Street. And a new minimum benefit to keep low-income workers above the poverty threshold.
- It protects Medicare. Or at least as much as any legislative deal can. The proposal would cap federal healthcare costs at the growth of GDP plus 1 percent.
- It does away with the tax code’s preferential treatment of capital gains and dividends, and the awful Alternative Minimum Tax, and offers fairer and flatter rates for the overwhelming number of working-class Americans who take the standard deduction.
- It treats the Pentagon budget with the same cold eye it casts on domestic spending, suggesting that we pare $100 billion from the military budget.
- It does away with $3 billion in farm subsidies every year, and ends tax breaks for the oil and gas industry.
- It doubles the federal gasoline tax and applies much of the revenue to mass transit, nudging America toward energy conservation and away from reliance on foreign oil. [Read more about U.S. energy policy.]
- It stops and then reduces the cost of interest payments on the federal debt, which are a silent, mortal threat to all liberal dreams and programs.
All this has to be negotiated, and the devil is in the details. We can do it now, or we can wait and do it in a crisis. Either way, it’s going to get done.
The Simpson-Bowles proposal has not arrived with the usual distributional analysis of who wins and who loses, and the left--and all of us--should fight like wolverines to kill a deal that furthers the already dangerous levels of economic inequality in the United States.
That said, the final, and perhaps overriding reason for the left to buy into Simpson-Bowles is political.
Barack Obama and Democratic House and Senate candidates are going to have to win a lot of votes in 2012 from moderate and independent voters who have not joined the Tea Party, but remain alarmed about the long-term effects of the federal debt. These voters want an economy that creates jobs, and safety net programs that rest upon a reliable fiscal foundation. They are furious at the kind of partisan bickering and political selfishness they see in Washington.
The right sort of budget deal could make Obama look like the post-partisan statesman he promised to be, and help him in states he won last time--like Virginia, North Carolina, and Indiana--that look far from promising today. And if it is the Republicans who back away, then Obama has exposed their pandering and hypocrisy.
Or maybe progressives think there is a more liberal politician out there who can beat Obama in the Democratic primaries and, running on a hard left platform, capture the White House in 2012.
Howard Dean? Russ Feingold? Paul Krugman?
I think not.