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Report from the Twilight Zone: Debating Sacrifices from the Poor While Tax Breaks for Wealthy Americans Are Extended

Two weeks ago the Co-Chairs of the President’s National Commission on Fiscal Responsibility and Reform proposed a plan to reduce the nation’s deficit. The plan has numerous flaws, notably its overreliance on spending cuts rather than revenue increases, and its cuts to federal programs critical for women and their families such as Social Security and Medicare. But though the plan falls short of its aim to “protect the truly disadvantaged,” the importance of this guiding principle is one with which I wholeheartedly agree and an ideal that I would expect to garner broad support.

But on the day when Congress voted to extend tax cuts for the wealthiest Americans, giving millionaires an average income tax cut of more than $100,000 and average estate tax breaks of $1.5 million for the very wealthiest Americans, I attended a discussion at the Brookings Institution which questioned this very aim, asking “should the disadvantaged be spared from the budget axe?”

Incredibly the answer for some participants was “no.”  Ron Haskins, one of the moderators, recently argued that, “in a crisis, no individuals or groups are exempt from contributing to the solution. Every interest group, many with high-priced lobbyists behind them, will be presenting reasonable arguments about why their group should be exempt from the cuts or tax increases.” Panelist Douglas Holtz-Eakin seconded Haskins’s claim, stating that “it is a dangerous thing to create protected classes in budgetary times such as these.”

Equating the poor with an “interest group [with] high-priced lobbyists” or arguing that efforts to cut wasteful corporate subsidies and egregious tax loopholes cannot move ahead if the poor are protected are ridiculous.  What’s more, there are several reasons why the poor deserve special protections in deficit reduction plans.

First, the recent economic crisis has pushed this already struggling group to the edge.  In 2009 nearly 2 million more people were in extreme poverty than in 2008, and the numbers for 2010 will only be worse.

Second, the poor are already sacrificing. This year saw the expiration of critical safety net programs at the federal level such as TANF Emergency fund, (an income support and job creation program) and deep cuts to others including resources for child support enforcement, not to mention the slashing of critical state-level programs across the country. Asking people to sacrifice further is not an option when they have nothing left to give.

Third, the poor did not cause this problem and they should not be responsible for fixing it. The main drivers of the increased deficit are the Bush-era tax cuts, the wars in Iraq and Afghanistan, and the economic crisis created by Wall Street.

Economic Graph

At a time when millionaires are receiving new tax breaks and billionaire hedge fund managers protect their preferential tax treatment at the expense of funding for Food Stamps (now SNAP), debating if we should balance the deficit on the backs of the poor is appalling.

Comments

Follow-up

We need a revolution of/about on behalf of poor people in this country. As a dusabled, poor person I am truly sick & tired of being sick & tired!

Thank you for this

Thank you for this informative blog post. We need to tax people who have money, and help those who are having a hard time if we are to have a healthy economy.

But some people are very selfish.

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