The Federal Budget Deficit, Tax Cuts and Your Work
May 31, 2005, 14:29
As many organizations grapple with cuts in their local, state and federal funding, a pervasive myth prevents us from doing the kind of organizing we need to be doing to stop these cuts.
This myth is that federal spending is out of control; that because we are spending $4.4 billion per month on the war in Iraq, we don’t have money for libraries, health care, public schools and so on. Many of us know that the tax cuts are a major part of the federal deficit, but all of us need to keep in mind, and tell our constituents this fact: the problem is revenue generation and not spending. In fact, during all the years of this century, federal expenditures have been lower than the 1980’s as a percentage of the gross domestic product. (Source: National Economic Trends, St. Louis Federal Reserve as reported by OMB Watch.)
Why is this distinction important? Let’s look at some examples:
At a recent anti-war rally, several placards and a few speakers talked about the expense of this war and how we can’t afford it. They blamed the war for cutbacks in domestic spending. But in doing so they leave the question wide open: “What if we could afford the war? Does that make it right?” I think they would say no. Those working to curb military spending and end the war (both goals that I strongly support) need to do so based on the immorality of a bloated military and an imperialist agenda that sends thousands of people (American, Iraqi, Afghani and others) to death and injury. The cost of it is a factor, but is not the main factor
By June 2005, all three libraries in the city of Salinas, CA will close. One is already closed. This city, home of John Steinbeck, will have no public libraries. The idea of this has sent shock waves throughout California but the ensuing debate has often pitted early childhood education or health care for indigent seniors or programs for the homeless and mentally ill against each other and the libraries. The notion that people have bought into, and that we in the nonprofit sector must oppose vigorously, is that there is only so much money and we have to create a hierarchy of needs. In this hierarchy, homelessness will be a higher priority than a library. But we can afford all of these programs—in fact, we can afford to build a society in which there are no programs for homeless people or indigent seniors for the simple reason that there are none of these.
The discretionary domestic programs Bush seeks to cut or restrain account for only 17% of the total federal budget. And even if Congress agrees to eliminate or cut funding for 128 federal programs (Bush’s request), the savings will be miniscule at just $4.9 billion—a rounding error in a $2.4 trillion budget and an amount that would pay less than six days interest on the national debt. (Source: George Will writing in the San Francisco Chronicle, 2/9/04)
The Congressional Budget Office (CBO) states that the single biggest cause of the deficit is the president’s massive tax cuts for the wealthy. Many economists estimate that 45% of the deficit comes from the tax cuts of 2001 and 2003. This will go higher if Congress adopts new tax cut proposals.
What you should do, no matter what kind of nonprofit you are and no matter whether you have federal funding or not:
1. Insert the above facts into your newsletters, speeches, interviews, staff and board retreats.
2. Learn more about current tax policy by visiting the website of OMB Watch (www.OMBWATCH.org or the Coalition on Human Needs (www.chn.org). Use their links to go to other exciting sites and see what work is being done on a wide variety of tax and budget issues.
3. Here are some shorter factoids that help illustrate the nature and depth of the problem, which is basically run of rapid redistribution of wealth to the wealthy:
The combined wealth of the world’s three richest people is greater than the total wealth of the world’s 48 poorest countries
The world’s 475 billionaires possess wealth that is greater than the combined incomes of the poorest half of humanity. (Sub note here: Of the ten wealthiest people in the United States, five are Waltons, owners of Wal-Mart and its subsidiaries.)
44% of the tax cuts went to our nation’s millionaires. By 2009, these taxpayers will be saving $95,000 each, whereas people with incomes below $10,000 will save $7.
Already, the top 1% of income earners have received 44% of tax cut benefits. 53% of households received $100 in tax cut benefits and 36% got no cuts at all.
Above all, introduce into every conversation you can something about core values. What kind of a society do we want? We can have it—we have the money. It is simply a question of will.
Daddy war bucks, By James Goodman
My, aren't Americans generous! Right now they are busily patting themselves on the back for the tremendous job they're doing in the wake of the greatest natural disaster in our lifetime. And indeed, the country has responded with a genuine outpouring in both the private and public sectors. And this much, at least, is recognized around the world: Part of that American effort is entirely sincere.
But there is another side to it. Bush's announcement of $35 million in initial aid was widely reported around the world as stingy. Then as he increased it by a factor of ten, this was widely accompanied by stories about how he sees this as an opportunity to make things right with the Muslim world. But seen in the light of buying good will, even $350 million is hardly generous. That is $1.19 per American citizen. Japan is giving three times that much and Norway has pledged nearly $40 per person.
And why did U.N. secretary general Kofi Annan say, "I hope all the money will be delivered"? Hint: This remark was no
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