Colorado senators at odds with taxpayers over Gang of Six plan
Colorado Sens. Mark Udall and Michael Bennet may have walked themselves out on a limb with their premature endorsement of the Gang of Six plan for raising the debt ceiling.
After Obama’s speech Monday evening, it seems likely that only something like Senate Majority Leader Harry Reid’s modest proposal could meet House Republicans’ criteria for a plan they will accept — spending cuts only and no new revenue.
There is no certainty that House Republicans will buy Reid’s plan, but it is certain that the bipartisan Gang of Six plan is now off the table. For many Democrats, that is welcome news.
The Gang of Six plan would have reduced the deficit by $3.7 trillion over 10 years. Of that amount, $3 trillion would come from spending cuts, while only $1 trillion would come from revenue raised by closing loopholes used by corporations and rich people to avoid taxes.
The proposal would also lower the corporate tax rate in return for closing loopholes, providing a large tax break for business.
Individual income brackets would be reduced from six to three, lowering the top rate from 35 percent to somewhere between 23 and 29 percent. That could provide a windfall for wealthy taxpayers, since the 35 percent bracket applies only to income over $379,150.
Another benefit for the wealthy would be ending the Alternative Minimum Tax that requires all high-income taxpayers to pay something.
When the outline was first presented, congressional Democrats and the president rejected it because its cuts to benefits vital to middle- and low-income families were too severe.
Republicans rejected it because of “tax increases” resulting from closing corporate and individual tax loopholes.
As other proposals failed, the Senate bipartisan Gang of Six resurrected the proposal, touting its “balanced” approach to spending cuts and revenue enhancement.
Obama bought into the idea and incorporated its principles into his final effort at a big deal before capitulating to Republican intransigence.
Many people will be relieved to see the Gang of Six plan “deep-sixed.”
The only “balance” they see in the proposal is on the backs of the middle class.
As Sen. Bernie Sanders put it, the proposal would be a “disaster for working families in this country, for the elderly, for the sick, for the children and for low-income people.”
With a recent Pew Research Center poll showing that large majorities believe that Social Security (87 percent), Medicare (88 percent) and Medicaid (77 percent) have “been good for the country,” it seems unlikely that many of them would accept serious cuts to these programs passively.
Despite some calls for reform in the programs, the Pew report makes clear that “the public’s desire for fundamental change does not mean it supports reductions in the benefits provided by Social Security, Medicare or Medicaid.”
Rather, “on the broad question of whether it is more important to reduce the budget deficit or to maintain current Social Security and Medicare benefits,” the Pew report says, “the public decisively supports maintaining the status quo.”
Unfortunately, Udall and Bennet, do not share the public’s opposition to cutting Social Security, Medicare and Medicaid benefits.
Udall showed his enthusiasm for the plan by urging the Gang to become a “mob” to pass the legislation — as though the tea party mob in the House is not enough for one Congress.
Bennet criticizes both those who advocate for no changes to Medicare, and those who will stand for no increase in revenue. “We can no longer kick the can down the road,” he wrote, “We need to make hard choices, and the bipartisan Gang of Six gives us a way forward.”
It is a way fraught with peril for middle-class taxpayers. Early drafts, according to the Los Angeles Times, “appeared to rely more heavily on spending cuts (than closing tax loopholes) to constitute the $3 trillion package.”
The Gang of Six proposal will probably pop up again after a short-term fix expires. Colorado voters should demand assurances from their senators that corporations will pay their fair share so that the budget is not balanced on the backs of those least able to pay and least responsible for the debt crisis.