Reduce the deficit, not the middle class

Mr. President, members of Congress,

We, the undersigned, understand the need to reduce the federal budget deficit. We disagree, however, with the means that are being proposed in order to achieve this. Since the beginning of the Great Recession, working class and middle class Americans have languished under pay cuts, furloughs, layoffs, reductions in retirement income, and subsistence upon meager unemployment checks. Now, these same Americans, who have shouldered the entirety of the Great Recession upon already overburdened shoulders, and of whom 25 million are still looking for work, are being asked to share the pain amongst themselves yet again, in the form of benefit cuts in Medicare, Medicaid, Social Security, cuts to Education and our infrastructure. We believe that there is a better way, one which would not inflict more pain on an already beleaguered middle class. This plan would strengthen Social Security, reduce defense spending to 2001 levels, impose a carbon tax on big polluters, reduce the cost of health care, allow the Bush tax cuts for the wealthy to expire, convert the mortgage interest deduction to a 15% tax credit, and have the Federal Reserve buy and hold $2 trillion in debt. It would reduce the deficit by $9.1 trillion over 10 years (compared with the Gang of Six’s $3.7 trillion deficit reduction plan), and reduce the public debt to 44% of GDP, from its current level of 70%.

Social Security:
In 1983, the Greenspan Commission called for an increase in the Social Security payroll tax to 12.4%, the gradual raising of the retirement age from 65 to 67, and the raising of the cap on wages that were subject to the Social Security tax to the 90th percentile of income. The first two changes were carried out. Over the last three decades, however, there has been a large redistribution of income upwards, and as such, only wages up to the 82nd percentile of income are currently subject to the Social Security tax. Those making more than $106,800 per year in wages pay no Social Security tax. We call for:

*Raising the cap to the 90th percentile of income, which is equal to $180,000 a year.
*The minimum benefit for low earners to be raised by up to 40%.

This would increase Social Security’s revenues by $656 billion over a 10-year period.

Defense:
In 2001, the United States spent only 3.6% of GDP on Defense. The wars in Iraq and Afghanistan and the broader war on terror, however, have now driven that level of spending up to 6% of GDP. We call for:

*A reduction in our combined troop strength in Iraq and Afghanistan to 30,000 troops by 2013.
*A reduction in our strategic nuclear force to 1,000 deployed weapons, and the restriction of missile defense development to those efforts most likely to succeed.
*The withdrawal of one third of our troops stationed in Europe and Asia, a reduction in the total size of the Army, Marine Corps and Navy battle fleet by 18%, and a reduction in Air Force fighter wings from 16 to 14.
*The cancellation or delay of various weapons systems currently in development which have faced cost overruns, and the substitution of cheaper weapons systems which are currently in existence and have similar capabilities.
*A reduction of 6% in Research and Development.
*Improving the efficiency of US Military bases.

These changes would reduce the deficit by $2 trillion over 10 years.

Environmental:
We call for a Carbon tax of $23 per ton to be imposed, with the tax rising at the rate of 6% a year until 2050. Consumers would receive a partial rebate. This would reduce the deficit by $620 billion over 10 years.

Health care:
There are incredible cost inefficiencies in our health care system. If we had Canada’s universal health care system, we would have only a very minor budget deficit, leading to large yearly budget surpluses in the decades ahead. If we had Spain’s universal health care system, we would almost immediately have yearly budget surpluses. Both of these systems have resulted in life expectancies of 80 years for Canadians and Spaniards, nearly 3 years longer than average American life expectancies. To reduce the cost of health care and reduce the deficit, we call for:

*The establishment of a Medicare-type public health insurance option in the health care exchanges, of the sort called for by the House of Representatives in 2009.
*The negotiation of Medicare drug prices.
*The globalization of Medicare and Medicaid, so that American expatriates would be able to buy into the universal health care systems of the foreign countries that they reside in using vouchers issued by Medicare and Medicaid, with the savings being split between that individual and the US federal government.

These changes would reduce the deficit by $1.1 trillion over 10 years.

Taxes:
The tax burden of the wealthy has fallen significantly over the last three decades, even as their income has risen significantly faster than the incomes of middle-class Americans. In 1980, the top 1% riches...