Voices for Progress endorses the following principles of deficit reduction, signed by over 1,600 national, state and local organizations, developed by the Strengthen America’s Values and Economy (SAVE) for All Campaign, coordinated by the Coalition for Human Needs.

SAVE for All

Strengthening America’s Values and Economy for All

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The Responsible Path to Jobs, Shared Recovery, and a Stable Future

As the Joint Select Committee on Deficit Reduction takes up its charge to develop a plan to reduce the deficit over the next ten years, we wish to call to your attention the principles of the campaign to Strengthen America’s Values and Economy (SAVE) for All. These principles were endorsed by more than 1,600 organizations in every state of the nation earlier this year. They were agreed to then out of a deep concern that the call for deficit reduction had become an end in itself, rather than the means to the central goal of shoring up the soundness of our economy and the economic security of our people.

Today, 25 million people have too little or no work at all and one out of four families with children go through periods when they cannot afford enough food. Our concern that a single?minded concentration on short?term deficit reduction is misguided has only grown deeper.

The SAVE for All principles acknowledge that the deficit and debt should be reduced over the long term. They call for a comprehensive approach to shrink the deficit through job growth, more revenues from people and corporations at the top of the income scale, and savings from reducing waste in the military and elsewhere. The principles strongly oppose as a means of deficit reduction cuts in services and benefits that low?income and vulnerable people need. They also oppose weakening the federal government’s capacity to respond to worsening economic conditions or global or natural calamities. The President’s plan, Living Within Our Means and Investing in the Future, incorporates many of these key principles.

These principles should be the solid framework for the Joint Select Committee’s work. Specifically, we urge the Joint Select Committee to:

• Protect low-income and vulnerable people: The Budget Control Act exempts many essential programs from automatic cuts that would be triggered if Congress does not adopt legislation advanced by the Joint Select Committee. But there are no statutory restrictions against including cuts to basic safety net programs in the Committee’s recommendations. We strongly urge the Committee to apply the rationale for the sequester exemptions in its plans. Low-income people relying on Medicaid for their health care, jobless workers needing unemployment insurance, people with disabilities needing Supplemental Security Income, and low-income families with children needing aid through refundable tax credits, Temporary Assistance for Needy Families and the Supplemental Nutrition Assistance Program (formerly food stamps) have nowhere else to turn. Social Security and Medicare lift millions of Americans out of poverty. Increasing the hardships of low-income people by reducing essential assistance will have damaging short and long-term consequences, threatening family economic stability, poor and disabled people’s health, and children’s development. Recent Census survey data show how important these programs are. Children are far less likely to be uninsured than are working-age adults because of Medicaid and CHIP; 5.4 million people are lifted out of poverty by the Earned Income Tax Credit; 3.2 million are lifted out of poverty by Unemployment Insurance, and 3.9 million by SNAP/food stamps.

Mandatory programs are not the only ones that provide essential services to vulnerable people; federal funding of education and training, WIC, and housing and home energy aid are examples of other programs that help to alleviate and overcome poverty. The Joint Select Committee should reject proposals to further cap spending, forcing cuts in vital services that keep millions of Americans from destitution.

• Make revenue increases from equitable sources at least half of your recommendations. The Budget Control Act has already committed Congress to about $1 trillion in cuts to appropriated programs over the next decade. This first stage of the deficit reduction plan threatens vital investments in education, housing and home energy assistance, public health, child care and other services for children and families, and many other forms of community-rebuilding, but asks nothing of the top income brackets. The Joint Committee has the authority and responsibility to redress this imbalance by making revenues a substantial part of your plan.

Through 2010, the top 1 percent pocketed about $490,000 each in cumulative tax reductions from the series of tax cuts that began in 2001. If these tax cuts remain in place, the top of the income scale will take in even more over the next ten years. In 2013 alone, the Bush-era tax cuts for the top 1 percent will average $68,000. They do not need this largesse. In just the one year from 2009 to 2010, when 31 percent of Americans were either unemployed or underemployed, income for the richest 1 percent soared by 7.3 percent. With all these gains, the wealthiest Americans can contribute substantially to deficit reduction. Protecting them at the expense of the most vulnerable among us makes no sense on either economic or moral grounds. We strongly agree with President Obama’s “Buffett rule” – that millionaires and billionaires should not pay a lower effective tax rate than people of modest means. We urge you to support the President’s recommendation of $1.5 trillion in revenue increases from progressive sources. The specific package of revenue options you select may differ, but seeking at least as much in revenues as the President proposes from similarly progressive sources should be your goal.

• Incorporate job creation in your plan. If nothing is done, unemployment will remain close to the current unacceptable levels for years. That means tax revenues will remain low, and demand for government services will stay high. Job creation over the next two years will make it easier to meet deficit reduction targets over the next decade. The Congressional Budget Office estimates that if wages and salaries rose one percentage point per year as a share of GDP, the increased federal revenues and lowered debt service that would result would reduce deficits by $171 billion over 10 years. The President’s American Jobs Act includes essential components so that low-income people can find work and communities can rebuild. These elements – hiring teachers and public safety employees, modernizing infrastructure, especially in low-income areas, providing training and placement to the long-term unemployed, subsidized jobs, jobs for youth, continued unemployment insurance, and well-targeted payroll tax relief – are important steps towards the economic growth needed for sustained deficit reduction.

• Seek savings from wasteful military spending. There have been bipartisan proposals to reduce military spending by at least hundreds of billions of dollars. Lawrence Korb, a former Reagan defense official, has proposed $400 billion in savings through 2015 unrelated to the conduct of the current wars through reductions in ineffective or unneeded weapons systems, shrinking our nuclear arsenal, and other efficiencies recommended by former Secretary of Defense Gates. Military spending has not been subjected to adequate oversight in past years, and as a result there have been massive cost overruns and large expenditures on weapons systems later abandoned. Military waste damages our security; a lean and effective military combined with investments towards shared prosperity will make us stronger.

We strongly urge the members of the Joint Select Committee to reject any plan that harms low-income people, adds to their number, and stalls our fragile economic recovery. Allowing revenues from the highest-income households and corporations to remain at historic lows will force cuts that will widen inequality and weaken our economy. Deficit reduction achieved this way will be unsustainable; it will do more harm than good.

A plan that protects millionaires at the expense of low- and moderate income people is wrong both on moral and practical grounds. We cannot attain fiscal stability if economic security is out of reach for millions of Americans.

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November 2011