The vision thing: will Americans share the burden of the debt?

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CENK UYGUR, HOST: Good evening, everybody. I‘m Cenk Uygur.

President Obama spoke earlier today, and he sounded like the man we voted for. He outlined a progressive vision for the country, defended the idea of government, that sometimes we can achieve more together than we can apart. I really like that.

He said he would also protect important social programs and fight for the middle class. It was a very good speech to listen to, and it was, of course, this afternoon that he gave it, where he unveiled his plan for cutting the deficit and, more importantly, outlined his vision of America.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We believe in the words of the first Republican president, Abraham Lincoln, that through government, we should do together what we cannot do as well for ourselves. We will all need to make sacrifices, but we do not have to sacrifice the America we believe in. And as long as I‘m president, we won‘t.

(END VIDEO CLIP)

UYGUR: Progressives have been asking him to make his case for a long time. And it appeared today that he was making that case.

You know what else he did? He also ripped into the Republicans.

(BEGIN VIDEO CLIP)

OBAMA: I believe it paints a vision of our future that is deeply pessimistic. It‘s a vision that says America can‘t afford to keep the promise we made to care for our seniors. It‘s a vision that says up to 50 million Americans have to lose their health insurance in order for us to reduce the deficit. That‘s not a vision of the America I know.

(END VIDEO CLIP)

UYGUR: The president says his plan will reduce deficits by $4 trillion over 12 years, and the first step is rolling back Bush tax cuts for the rich.

(BEGIN VIDEO CLIP)

OBAMA: We‘re (ph) $1 trillion worth of tax cuts for every millionaire and billionaire in our society. We can‘t afford it. And I refuse to renew them again.

(END VIDEO CLIP)

UYGUR: Nice. I like the word “refuse.”

The president also drew a line in the sand on Medicare, too. He attacked the Republican plan to privatize it with a voucher system.

(BEGIN VIDEO CLIP)

OBAMA: I will preserve these health care programs as a promise we make to each other in this society. I will not allow Medicare to become a voucher program that leaves seniors at the mercy of the insurance industry.

(END VIDEO CLIP)

UYGUR: So the speech in its totality sounded strong and it sounded progressive. Again, that is a president that we voted for, and it was nice to see him actually make that case today. So, very encouraging.

But while the president‘s speech hit all the right notes, he was short on specifics in terms of how he would reform Medicare, Medicaid and Social Security. Now, it‘s a little troubling as he hinted that the specifics might be basically dictated by the debt commission.

Now, that‘s a cause for concern, because the debt commission, well, in my opinion and in the opinion of a lot of progressives, it took a lot from the poor and the middle class and still gave too much to the wealthy, as I said, for most progressives in the country. Now, we‘ll have to see how this plan gets put into action—that‘s of course critical—and what happens once negotiations actually start with Republicans.

Now, to give us a progressive perspective is Independent Senator from Vermont, of course, Bernie Sanders. He‘s a member of the Progressive Caucus, and about as progressive as it gets.

So, let me start really simple. What did you think of the speech?

SEN. BERNIE SANDERS (I), VERMONT: I thought the president said a lot of the right things. I think the devil is going to be in the details. And, also, the question is, is whether the president is going to fight for what he believes, or is this just rhetoric?

Cenk, what we saw in terms of the tax deal, you remember back in December, the president really basically caved in and gave the Republicans almost everything they wanted. In terms of the continuing resolution, the 2011 budget, which I‘m going to vote against tomorrow, there were massive cuts in programs for health care, for education, for infrastructure, keeping people warm. I think a very bad agreement.

Now what the president is saying is that he is drawing a line in the sand. And I hope very much that the president is going to say to the Republicans that if you refuse to raise the debt limit, if you are about to destroy or bring chaos to the international financial community, leading, perhaps, to a major depression, if you guys are prepared to do it, take responsibility. But we‘re not going to cave in again, we‘re not going to be blackmailed again. You are not going to dismember the government and cut back on programs that tens and tens of millions of Americans absolutely depend upon while, as the president said, you give a trillion dollars in tax breaks to the richest people in this country who, in many ways, have never had it so good.

So the president‘s rhetoric was strong, weak on the details. But the $64 question is, is the president going to really fight? Is he going to rally the American people and say no, we‘re not going to bring hardship to the people without money while we give tax breaks to the very rich? That‘s the issue that remains to be seen.

UYGUR: Well, Senator Sanders, it is apparent to me that you are concerned. Right? And towards the end of the speech, the president did say, I might not get what I want, so that, of course, opens the door for negotiations. Now, obviously they have to have negotiations.

I guess my question to you is, are you happy with where the negotiations appear to begin? Because the president kept referring to that deficit commission that he put together. What‘s your thoughts on that?

SANDERS: No, I think you make a very good point, Cenk, and I am not. What often happens is we start off somewhere in the middle, or to the right of center, then the Republicans go into the extreme right, and we end up with a settlement that is very far to the right.

I think the president should have been very clear in terms of Social Security, for example, in saying, excuse me, Social Security has not contributed one nickel to the deficit, it can pay out ever benefit owed to every eligible American for 26 years, has a $2.6 trillion surplus, it is not on the table. We‘re not going to discuss it now. That‘s for another day.

In terms of Medicare, I think that, clearly, there are financial problems. There are ways that, by getting rid of bureaucracy within the Medicare system, we can save substantial sums of money without doing the kinds of damage that the Republicans want to do.

So, again, Cenk, the devil will be in the detail. But I am not a great fan of that Simpson/Bowles deficit reduction commission. I think that‘s a bad place to start from.

UYGUR: Right. You know, one of my concerns with that commission is, among other things, they said Social Security retirement age would be raised to 69. If that‘s the model we‘re using, you‘re not happy with that solution at all, right?

SANDERS: And they‘re going to also, in addition to that, cut benefits for many, many workers. It is not a good place to start from.

And also, most importantly, we have to separate the whole issue of how we deal with the deficit, which is very important, from Social Security, and how we make sure that that remains strong for 75 years. These are separate issues, because Social Security is paid for by the payroll tax, has a huge surplus right now, hasn‘t contributed one nickel to the deficit. And it is only Republican ideology and propaganda which is trying to bring these two issues together.

UYGUR: All right. Senator Sanders, honestly, I didn‘t know where you were going to come out on this, and I sense concern from you. That‘s what I sense.

OK. We‘ll see how it plays out, obviously. Thank you for joining us tonight. Really appreciate it.

SANDERS: Thank you. Good to be with you.

UYGUR: All right.

Now, a key part of the president‘s message today was for Americans to share the burden of our debt and for the wealthy to give something back.

(BEGIN VIDEO CLIP)

OBAMA: There‘s a time when the tax burden on the wealthy is at its lowest level in half a century, the most fortunate among us can afford to pay a little more.

And I believe that most wealthy Americans would agree with me. They want to give back to their country, a country that‘s done so much for them. It‘s just Washington hasn‘t asked them to.

(END VIDEO CLIP)

UYGUR: Well, I hope he‘s right. They‘re looking forward to giving back.

Now, look, take a look at this chart. He‘s definitely right about how low taxes are today.

For example, you see that the taxes are at 35 percent now for the top bracket, which is, historically speaking, incredibly low. Now, decades ago, the top rate was 70, 80, and even 90 percent.

Remember the last Republican that balanced the budget? Eisenhower.

The highest marginal tax rate under Eisenhower? Ninety-one percent.

So, yes, there‘s no question the rich can pay a lot more, and apparently are not paying their fair share. And that‘s why we‘re in part of the trouble that we‘re in now.

So now let me bring in Representative Jan Schakowsky. She‘s a Democrat from Illinois. She was at the president‘s speech today, and she has an even bolder tax plan. She‘s also a member of the Progressive Caucus and of the president‘s debt commission.

Now, let me start there, because I know you‘re a part of the commission and that you did not sign off on it. What was your concern with the commission?

REP. JAN SCHAKOWSKY (D), ILLINOIS: Well, not only didn‘t I sign off on it, but I actually offered an alternative plan that said, yes, we can balance the budget, but we don‘t have to do it on the backs of the elderly and middle class and poor people. But, having said that, there were a couple of things that I agreed with the commission on, and that was that we should go after what we call tax expenditures. So it‘s tax breaks for wealthy Americans. And number two, that the defense budget had to be on the table.

And those were two things that the president said today that he also liked about the deficit commission, and that he also wanted to adopt. So, I actually agreed with him on that, even though I voted against and presented my own proposal for balancing our budget.

UYGUR: So is it—you know, I know the president outlined today, basically, he wants to get a trillion dollars in reinstating some of the tax rates that were under Clinton. He wants to get $2 trillion from spending cuts, so a lot more from spending cuts, and maybe save about a trillion dollars in interest payments if you do this plan.

Do you think that‘s the right balance, or are you concerned about that balance? And are you concerned that he is using the commission here apparently as his guide, something that you voted against?

SCHAKOWSKY: Well, let me just say this, Cenk, that what the president did today, rather than lay out all kinds of very specific items, was present a very different vision of America between what he sees and what the Republicans have proposed. I think that was the context that is most important so the American people really understand what what‘s at stake, that the vision that they proposed was deeply pessimistic, that it was not the America that he sees.

It‘s not the America that he sees that makes poor people and middle class people bear the burden of this debt, that seniors shouldn‘t have to pay. And he talked pretty specifically about Medicare and Medicaid, that, yes we could reduce the cost of health care, but that doesn‘t mean that we had to do it by shifting those costs to poor people and old people in our country.

I thought it was a very passionate expression of the very different ways that we look at it. The Republicans have offered something that will absolutely exacerbate the disparity in income between the rich and the poor in our country, that ask the poor and middle class to sacrifice, even though as the president pointed out, the middle class income hasn‘t increased, while we‘ve seen this dramatic rise in the wealth of the top earners in America.

And so I really applauded that speech. We‘re still going to have to work out the details, but if he‘s coming from that kind of place, I have confidence on where we‘re going to end up.

UYGUR: All right. You know, thematically, I couldn‘t agree more with you. I thought he hit that note over and over in the speech, and it was really encouraging to see. And I say that as a progressive. You know, I‘m honest with the viewers, they know where I come from.

And speaking of which, I really like your plan. I want to show people what it is.

SCHAKOWSKY: Thank you.

UYGUR: It would be 45 percent rate for every dollar above a million dollars, and it would be 49 percent for billionaires, for every dollar above a billion. Now—

SCHAKOWSKY: Right. And I wanted to make that point, because people will say, a billion dollars? Who makes a billion? Well, yes, there are Americans who made $1 billion and more in 2010. That was their one-year take for that particular year, $1 billion.

UYGUR: So should the president have been bolder, though and go with -

I mean, it seems like your plan, as much as you and I might like it, doesn‘t even get considered in Washington. What‘s wrong there, that we have a Democratic president who isn‘t pushing the spectrum to the left there?

SCHAKOWSKY: Well, believe you me, I think that it would be wildly supported by the American people, who 81 percent said the preferable way to deal with our deficit and our debt would be to raise taxes on millionaires. And I know Bernie Sanders, Senator Sanders, had a similar proposal for millionaires.

And so what I‘m saying to my colleagues, have the courage to follow, follow the American people. They‘re telling us what they want us to do. There‘s no risk involved. We should, in fact, I think, even go higher, as my plan does, and tax millionaires and billionaires even more, not because of revenge, not because we‘re going to punish them, because of fairness.

UYGUR: Yes. If you can‘t get politicians on your side to agree to a position that they ideologically agree with and 81 percent of the country agrees with, well, there‘s something wrong in Washington.

But Representative Schakowsky is one of the ones that is trying to fix it.

And we thank you for joining us tonight.

SCHAKOWSKY: Thank you so much, Cenk.

UYGUR: All right.

About William Brighenti

William Brighenti is a Certified Public Accountant, Certified QuickBooks ProAdvisor, and Certified Business Valuation Analyst. Bill began his career in public accounting in 1979. Since then he has worked at various public accounting firms throughout Connecticut. Bill received a Master of Science in Professional Accounting degree from the University of Hartford, after attending the University of Connecticut and Central Connecticut State University for his Bachelor of Arts and Master of Arts degrees. He subsequently attended Purdue University for doctoral studies in Accounting and Quantitative Methods in Business. Bill has instructed graduate and undergraduate courses in Accounting, Auditing, and other subjects at the University of Hartford, Central Connecticut State University, Hartford State Technical College, and Purdue University. He also taught GMAT and CPA Exam Review Classes at the Stanley H. Kaplan Educational Center and at Person-Wolinsky, and is certified to teach trade-related subjects at Connecticut Vocational Technical Schools. His articles on tax and accounting have been published in several professional journals throughout the country as well as on several accounting websites. William was born and raised in New Britain, Connecticut, and served on the City's Board of Finance and Taxation as well as its City Plan Commission. In addition to the blog, Accounting and Taxes Simplified, Bill writes a blog, "The Barefoot Accountant", for the Accounting Web, a Sift Media publication.
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