The CBO [Congressional Budget Office] earned the ire of Republicans when it estimated that the GOP’s bill to repeal and/or replace Obamacare would take health insurance away from 25 million people. So, GOP Congressmen tried to retaliate. Taking a meat cleaver to CBO’s budget, they attempted to eliminate all 89 employees at CBO’s Budget Analysis Office, using the Holman Rule.

“The [Holman Rule] is a little-known relic from the 1870s [that] lets any member of the House make significant changes to agency functions or personnel through an amendment during the appropriations process,” says Federal News Radio in a July 25, 2017 report. “It was the first time lawmakers attempted to use the rule since the House reinstated it earlier this year.”

The Holman Rule essentially lets House lawmakers make changes to a federal employee’s salary or position without input from the appropriations committee. Members can debate these amendments on the House floor for a limited time…Congress hasn’t invoked the Holman Rule since 1983.

According to the Washington Post:

A separate amendment filed by Rep. Mark Meadows (R-N.C.) would also eliminate the same division and specify that the CBO instead evaluate legislation “by facilitating and assimilating scoring data” compiled by four private think tanks — the Heritage Foundation, the American Enterprise Institute, the Brookings Institution, and the Urban Institute.

Of course, those are all private, conservative think tanks. And, essentially, Meadows’ idea is to outsource and privatize the process, calling it “a pragmatic way to use the private sector and yet let Congress depend on a score that is accurate.”

The CBO is known for its objectivity and non-partisan approach to its work. Congress established the CBO in 1974. On its own web page, CBO describes its birth this way: [Note the connection to Richard Nixon.]

Conflict between the legislative and executive branches reached a high point during the summer of 1974, when Members of Congress objected to President Richard Nixon’s threats to withhold Congressional appropriations for programs that were inconsistent with his policies (a process known as impoundment). The dispute led to the enactment of the Congressional Budget and Impoundment Control Act of 1974 in July of that year.

Democrats representing areas around Washington DC blasted the vindictive amendment, calling it “part of a strategic assault on objectivity and expertise in the civil service.”

This is exactly what we worried about when Republicans reinstated this arcane rule in January,” members said in a joint statement. “The Holman Rule empowers members of Congress to target individual federal employees. The rule is being used to punish an important advisory body for doing its job by providing forecasts which some members now find inconvenient.

The Partnership on Government Oversight [POGO], a good-government non-profit group, said this about the proposed amendment:

Getting rid of the CBO would send a chilling message to all other independent offices, such as the Congressional Research Service or the Government Accountability Office, to tell Congress what it wants to hear or risk being closed,” POGO Executive Director Danielle Brian said in a July 25 statement. “If there are legitimate concerns over the operation of the CBO, the solution is reform not decimation.”

Even the conservative National Review opposed Meadows’ idea.

“Congress shouldn’t abandon its brain,” wrote National Review:

…Meadows wants to turn the CBO into an “aggregator” of cost-and-benefit scores performed by private think tanks. In other words, Meadows wants the CBO to serve as a middleman and collect scores from nongovernmental organizations, many of which have an admitted ideological leaning, to create a “composite score” on which lawmakers would rely… If legislative cost estimates were outsourced to think tanks, Congress would give up a rare and vital source of internal, independent information.

Fortunately, this year’s Republican-sponsored CBO-retribution amendments failed after Democratic and Republican leaders of the Ways and Means Committee came out in support of the CBO:

“We rely on CBO’s analysts to provide fair, impartial and fact-based analysis,” said the committee leaders in a letter to their House colleagues.

In the end [ July 25, 2017], the budget cuts were defeated 314-107, and the staff cuts failed 309 -106, according to the House Office of the Clerk. Neither will be included in the Orwellian-titled “Make America Secure Appropriations Act” for fiscal 2018.

But they tried, and that in itself is important. While Donald Trump distracts us with outrageous tweets,  demagogic speeches, and White House staff wars, Republican apparatchiks in Congress are busily—cynically, gleefully—going about the business of undermining democracy one small chink at a time— mostly unnoticed. Thankfully, this effort failed. But It won’t be the last time they’ll try.

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Where did Donald Trump’s absurd, brutal and immoral budget proposal come from? His recently appointed Budget Director, Mick Mulvaney, has now told us: “If he said it in the campaign, it’s in the budget,” he said. “We wanted to know what his policies were. And we turned those policies into numbers.”

What a fine way to create a budget for the United States: Consulting the array of impulsive utterances, crowd-pleasing, absurd and often contradictory campaign promises, robotically delivered speeches written by others, and perhaps even early-morning, incoherent tweets that add up to the nothing-burger that is Donald Trump’s policy “thinking.”

Let me see if I understand this process: During the campaign, Trump panders to xenophobic supporters, and shouts about building a “beautiful” wall, and making Mexico pay for it. Virtually everyone who knows anything about our relationship with Mexico—and border security — calls this an absurd idea. Even his campaign cronies know that this is not a realistic idea. Nevertheless, in the interest of fulfilling a ridiculous campaign utterance, his Budget Director translates that into $2 billion in the US budget—no mention, by the way, of the bogus “promise” to make Mexico reimburse us for the costs.

In speeches obviously written for him by whisperer-in-chief Steve Bannon, Trump trumpets about “rebuilding our military,” which, in reality, does not need rebuilding. He is said to have requested a display of military tanks and rocket launchers during his inauguration parade. Mulvaney picks up on that notion and makes an extra $54 billion in new military spending magically appear in the budget, so Trump can fulfill his 12-year-old-boy fantasy of having the biggest, most destructive toys to play with. So, this is how policy is interpreted and turned into budget proposals?

And if he’s “culling” Trump’s pronouncements for policy ideas, you have to wonder how he translated some of Trump’s tweets into numbers. There’s a scary thought.

To give this story a bit of historical context, think back to Richard Nixon. He was notoriously prone to instruct his White House staff to commit nasty, sometimes illegal acts—and not just the Watergate break-in. We learned, later, that his top aides often left the Oval Office scratching their heads and then agreeing to simply disregard what they had been asked to do. Even those guys—most of whom left political life in disgrace—had the judgment to recognize intemperate, unsound orders from a mentally unbalanced president when they saw them.

Mulvaney could have done America a great service by not enshrining Trump’s unreasoned rantings in a document as important as the budget. But he didn’t. He’s just another Trump sycophant who refuses to acknowledge that the emperor has no clothes.

The fact that Mulvaney said that he “wanted to know what [Trump’s] policy priorities were,” is a significant tell: After his boss has been in office for two months, Mulvaney still can’t identify the president’s policies and has to hunt them down?  Clearly, that means that Trump doesn’t have any thoughts about issues, let alone priorities. And if you’re searching through his speeches, tweets and campaign rants for trends, it quickly becomes clear that his only priority is himself.

It is irresponsible and insane to base our national budget on the zigzagging, self-contradictory and utterly uninformed pronouncements of this man.

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This was, of course, entirely predictable. President Obama is the only elected official in Washington to officially propose a cut in Social Security. Moral implications aside, not even Paul Ryan was so politically clueless as to include Social Security cuts in his budget. Here’s what Rep. Greg Walden (R-OR) chairman of the NRCC had to say about Obama’s budget:

Well, I thought it very intriguing in that the budget really lays out kind of a shocking attack on seniors, if you will. And we haven’t seen all the detail yet, and we’ll look at it, but I’ll tell you, when you’re going after seniors the way he’s already done on Obamacare, taking $700 billion out of Medicare to put into Obamacare, and now coming back at seniors again, I think you’re crossing that line very quickly here in terms of denying access to seniors for health care in districts like mine, certainly, and around the country. I think he’s going to have a lot of pushback from some of the major senior organizations on this and Republicans, as well.

So there you have it. Thanks to Obama, Republicans—who couldn’t care less about the elderly, the disabled, orphans, widows and veterans—are now defenders and saviors of Social Security. They can’t wait until 2014 when, whether it passes or not, they will hang chained CPI around every Democrat’s neck.

So, Democrats, if you want to keep your job, I would counsel you to stand up, like Senator Elizabeth Warren, Senator Bernie Sanders, Rep. Alan Grayson, and other progressives, and openly rebel against the corporate owned, neoliberal wing of your party. Obama doesn’t have to run again, but you may want to.  If you vote for chained CPI, and it passes, you will be facing constituents trying to live on SS checks with a smaller (already inadequate) cost of living increase. 50 million people in this country rely on Social Security, so, good luck with that. Unless your repudiation of this politically stupid and morally bankrupt idea is clear and unequivocal, your political future, as well as the future of the Democratic Party, is in jeopardy.

If you want to do something constructive, start beating the drum loudly for eliminating in the cap on payroll tax. Currently, the payroll tax that funds Social Security is capped at $113,700. Doing away with the cap would eliminate the inequity of the payroll tax and guarantee the solvency of Social Security for seventy-five years. No need to raise the retirement age or cut cost of living raises or benefits.

A recent poll by the National Academy of Social Insurance shows that almost 70% of Americans support raising the cap on payroll taxes, and raising the payroll tax rate, in order to increase Social Security benefits. So, Democrats, who do you represent? the people who voted you into office, or the banks and corporations who funded your campaigns?

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Put two high-level Republicans, two high-level Democrats and a politically savvy moderator around a table for three days, and what do you get? Heated, ideological arguments that lead nowhere, right? Well, not exactly, as the editors of Esquire were surprised to learn last year.

In August 2010, Esquire invited former US Senators Gary Hart [D-CO], Bill Bradley [D-NJ], Bob Packwood [R-OR], John Danforth [R-MO] and MSNBC’s Lawrence O’Donnell to sit down together in New York City for three days.

The plan was simple, says Esquire in its November issue. “A group of former legislators from across the political spectrum would convene, make the hard choices that our current leaders refuse to make, and erase the annual budget deficit by 2020.”

In a fly-on-the-wall background story, Esquire describes the deliberations in blow-by-blow detail. Except that no punches were thrown. Instead, the atmosphere around the table was collegial, respectful, serious-minded and solution-oriented. Participants applied their collective experience and expertise to the tough financial issues that, in today’s Washington pressure cooker, seem impossible to resolve.

According to Esquire, the assembled brain trust touched all of the financial and social hot buttons, but managed to keep their cool and stay above the fray. Trying to balance the budget meant discussing Social Security, Medicare, military spending, taxes, health care, energy policy, farm subsidies, earmarks and other subjects that have become radioactive in Washington.

They would argue, mostly, but also agree and reminisce and speak in Senate shorthand, and unlike the conduct that has come to define our poisonous contemporary political moment, each side would not ascribe the absolute worst motives to the other in order to make its points. No one would be accused of being out to destroy the Constitution. No outlandish conspiracy theories would govern the judgment of the participants. No one’s values would be held as suspect. No one’s very legitimacy would be in question. Rather, these senators were the very picture of spirited and rigorously informed good government.

But this was not just a symbolic, academic exercise. As participants lobbed ideas around the table, says Esquire, “Barry Anderson, a former deputy director of the Congressional Budget Office and the commission’s numbers expert crunch[ed] numbers at lightning speed to provide numerical weight to the commissioners’ plans.”

Reading Esquire’s account of the experiment, one cannot help but feel that America’s deficit problem is eminently solvable—if only we could take politics [meaning self-interest, influence from lobbies, the lust for power and sheer meanness] out of the equation. I know: fat chance. But I once heard a corporate board chairman say that most managers intuitively know exactly what needs to be done to solve a particular problem, but that they lack the will to make it happen. Judging from the conclusions drawn by the Esquire Commission to Balance the Federal Budget—a group of smart, former elected officials who Gary Hart described as “beyond ambition”—the answers are not that hard to figure out. And what surprised everyone was that when the agreed-upon ideas got a thorough, financial reality check, they not only balanced the budget, they created a $12 billion surplus.

You can read the full report of the Esquire Commission here. Among the highlights are:

• Gradually raise the normal retirement age to 70. Projected savings in 2020: $49 billion
• Restructure the military along strategic lines. Projected savings in 2020: $169 billion
• Repeal employer health-care tax exclusion and offer a refundable health care tax credit. Projected savings in 2020: $63 billion
• Increase the federal gasoline tax by $1 per gallon. Projected revenue in 2020: $130 billion

And that’s just the tip of the iceberg. There are 17 more proposals where those came from, and—spoiler alert—the commission not only managed to balance the budget in 2020—they achieved a $12 billion surplus. They not only reformed Social Security—they guaranteed its long-term solvency. And they not only proposed to keep tax rates low—they found a way to keep them at or near their current levels for the next decade. And they did it all in three days.

 

[Originally published on Occasional Planet in November 2010.]

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The People’s Budget is an alternative budget put forward by the co-chairs of the 80-member Congressional Progressive Caucus. In contrast to the Ryan and Obama budget plans, it is humane, responsible, and sensible, reflecting the true values of the American people and the real needs of our struggling economy.

The far-Right, Ayn Rand inspired plan offered by Representative Paul Ryan, seeks to slash Medicaid, food stamps, support for child care, the environment, and the rest of government other than the military, Social Security, and Medicare (which he would phase out in 2022). Ryan wants to keep taxes absurdly low in order to destroy entitlement programs and other public, non-military spending. The far right budget plan is not really about deficits, but about the destruction of the social safety net.

President Obama’s budget, is a center-right proposal that would keep most of the Reagan-era and Bush-era tax cuts in place, which would result in less funding for vital programs such as community development, infrastructure, and job training. His budget request does very little to restrain military spending. Also, his plan never really closes the budget deficit.

In the progressive middle, representing (according to polls) the wishes of the vast majority of voters, is the People’s Budget. According to Jeffrey Sachs, writing on Huffington Post, it would cut the budget deficit to zero by 2021 in an efficient and fair way by raising taxes on the rich and giant corporations, curbing military spending, and bringing health care costs under control, partly by introducing a public option.

It raises tax revenues and closes the budget deficit while protecting the poor and promoting needed investments in education, health care, roads, power, energy, and the environment in order to raise America’s long-term competitiveness. The People’s Budget thereby achieves what Ryan and Obama do not: the combination of fairness, efficiency, and budget balance.

According to Sachs:

Ryan reflects the wishes of the rich and the far right. Obama’s position reflects the muddle of a White House that wavers between its true values and the demands of the wealthy campaign contributors and lobbyists that Obama courts for his re-election. Many Democrats in Congress have also gone along with the falsehood that deficit cutting means slashing spending on the poor and on civilian discretionary programs, rather than raising taxes on the rich, cutting military spending, and taking on the over-priced private health insurance industry. Only the People’s Budget speaks to the broad needs and values of the American people.

Highlights of the People’s Budget

The policy options that make up the People’s Budget fall into five broad categories: public investment, Social Security, health care reform, Department of Defense spending, and tax reform.

The following is a summary of the People’s Budget taken from a working paper published by the Economic Policy Institute in Washington, DC.

1. Public Investment:

The People’s Budget finances $1.7 trillion worth of public investment over the coming decade. Additionally, the plan budgets for $1.45 trillion in general public investment. The general public investment is front-loaded to put Americans back to work, with $1.2 trillion earmarked to be spent over the next five years.

Transportation
The six-year surface transportation reauthorization proposal would rebuild and modernize the national surface transportation infrastructure and expand investments in highways, highway safety, passenger rail, and high-speed rail, among other projects. The proposal includes an up-front investment of $50 billion above current law for 2012, which, it is estimated, will generate hundreds of thousands of jobs over the next few years.

National Infrastructure Bank (I-Bank)
A National Infrastructure Bank (I-Bank) would leverage private capital and direct investment toward projects of national importance. A cornerstone of the I-Bank’s approach would be a rigorous project comparison method that would transparently measure which projects offer the biggest value to taxpayers and our economy.

Recapitalizing the Highway Trust Fund
The People’s Budget proposes raising the motor fuel excise tax by 25 cents as a direct funding mechanism to recapitalize the Highway Trust Fund and finance this surface transportation reauthorization proposal. The current tax on motor fuels is insufficient to fund today’s level of highway spending, which is already inadequate.

2. STRENGTHENING SOCIAL SECURITY

The People’s Budget does not propose any reductions in benefits. The People’s Budget raises the taxable maximum to include 90% of economy-wide earnings, and eliminates the maximum that employers pay on behalf of their high-income employees. This would mean raising the maximum taxable amount to $170,000 in 2012, up from $106,800 in 2011.

3. BUILDING ON HEALTH CARE REFORM

The People’s Budget adopts policies that build on the health care reform laws passed last year in order to assure access to affordable, quality care and expand coverage to Americans.

Offer a Public Option as part of the Health Insurance Exchanges
Beginning in 2014, national health insurance exchanges will be established (as a result of health care reform) through which individuals and families can purchase private coverage, increasing competition in largely fragmented, regional insurance markets. Under this option, the Secretary of the Department of Health and Human Services would administer a public health insurance plan to be offered alongside private plans through the exchanges. The public plan would exploit economies of scale to negotiate payment rates for prescription drugs.

Negotiate Drug Prices With Pharmaceutical Companies
When enacted, Medicare Part D (the prescription drug benefit) failed to harness the purchasing power of the federal government to negotiate wholesale prices for pharmaceutical drugs. Negotiating drug prices with pharmaceutical companies would save an estimated $157.9 billion over the 2012-21 period.

Medicare and Medicaid Savings
Major proposals include reducing the Medicaid provider tax threshold in 2015, tracking high prescribers and users of prescription drugs in Medicaid, strengthening Medicaid third-party liability, and recovering erroneous Medicare Advantage payments.

4. REALIGNING DEPARTMENT OF DEFENSE PRIORITIES

Base funding for the Department of Defense more than doubled from 2000 to 2009. Additional funding for military operations for Afghanistan, Iraq, and other combat missions has totaled $1.3 trillion over the 2001-11 period, of which $1.1 trillion went to the Department of Defense. These overseas contingency operations (OCOs) have been financed almost entirely off-budget in emergency supplemental appropriations bills. The president’s budget requested $126.5 billion for OCOs in 2012 and includes a $50 billion annual placeholder thereafter, for total costs of $576.5 billion over from 2012 through 2021.

Responsibly End the Wars in Iraq and Afghanistan
The People’s Budget accounts for an end to the wars in Iraq and Afghanistan. It would provide $161.4 billion in OCO funding for 2012 after which all OCO funding is ended. The Congressional Research Service estimates that this sum would be more than sufficient to safely and deliberately withdraw American soldiers from Afghanistan and Iraq. Relative to the highly uncertain costs budgeted for in the president’s 2012 budget, this withdrawal would save $415.1 billion.

Reduce Base Department of Defense Spending
Specific proposals for conventional forces include:

• Reducing active duty Army personnel strength to 427,000 by 2014 (a decrease of 120,000);
• Reducing the Marine Corps personnel strength by 30% to a force of 145,000 by 2014; reducing the Navy by 20% to a fleet of 230 ships; and
• Reducing the Air Force by 15%, reducing the number of squadrons by 18 of 60.

These force structure savings would total $593.7 billion over the 2012-21 period. Relative to higher spending levels in the president’s budget request, they would represent $816.7 billion in savings over the next decade.

5. TAX REFORM AND MODERNIZATION

The People’s Budget seeks to restore fairness to the tax code.

Reforming Taxation on Individual Income and Wealth
The People’s Budget would allow the Bush tax rate structure to expire on schedule when last December’s tax deal expires on December 31, 2012. It would immediately rescind the upper-income tax cuts, instead maintaining only those tax cuts for individuals earning less than $200,000 and joint-filers earning less than $250,000. Specifically, the budget would let the 33% and 35% tax brackets revert to 36% and 39.6%, respectively; reinstate the limitation on itemized deductions and personal exemption phase-out; and end all capital gains and dividends tax cuts. The People’s Budget would:

• Rescind the estate tax cut in December’s deal and replace it with Senator Bernie Sanders’ (I.-Vt.) Responsible Estate Tax Act (S. 3533). The policy would include a $3.5 million exemption ($7 million for married couples), leaving 99.75% of all estates fully exempt.

• Adopt Representative Jan Schakowsky’s (D.-Il.) Fairness in Taxation Act (H.R 1124), which would create several new tax brackets for high-income earners: $1-10 million would be taxed at 45%; $10-20 million, 46%; $20-100 million, 47%; $100 million to $1 billion, 48%; $1 billion and over would pay 49%.

• Eliminate the preferentially low rates on long-term capital gains and qualified dividends, and it would tax all capital income as ordinary income under the marginal tax rate structure.

• Limit the rate at which itemized deductions can reduce tax liability to a maximum of 28%. This policy would only affect itemizing tax filers currently in the top two income brackets.

• Replace the tax exclusion for interest with a direct subsidy to borrowers. Under this policy, state and local governments would make taxable interest payments to borrowers and receive a 15% subsidy from the federal government for the interest paid on those bonds.

Corporate Tax Reform and Responsibility Fees

• Impose a leverage tax (0.15% of covered liabilities) on large banks with more than $50 billion in assets. The fee would provide an incentive for large firms to decrease their liabilities, helping to rectify the problem of “too big to fail” financial institutions that was made all too apparent during the financial crisis.

• Impose a small tax on transactions of exotic financial products to further the policy goal of taming speculation and encouraging more productive investment.

• Eliminate fossil fuel tax preferences as detailed by the president’s budget. Specifically, this policy would repeal exploration and development expensing, preferential tax treatment of royalties, and domestic manufacturing deductions, among other tax preferences, for oil, natural gas, and coal producers.

• Reinstate the Superfund excise taxes that expired in 1995 in order to finance cleanup of hazardous waste.

• Eliminate the deferral of income from U.S.-controlled foreign subsidiary corporations and instead tax all foreign earnings as earned. Foreign tax credits (reducing U.S. tax liability by the amount of tax paid to foreign governments) would still be allowed, although the credit limits would be treated differently. The U.S. parent corporation would no longer split domestic and foreign expense activities, so the credit would only be allowed against tax liability to foreign governments.

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