Another look at the federal budget

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Those pollyannas at the Concord Coalition, a non-partisan organization that advocates “generationally responsible fiscal policy,” see the possibility of compromise between the budget proposed by U.S. Rep. Paul Ryan and the Senate Democrats.

Thursday the organization issued a press release noting that there were substantial differences between the two proposals, “and the key question is whether the two parties are now prepared to start serious negotiations that could lead to an agreement to put the country on a more sustainable path.”

Earlier in the week the Concord Coalition suggested the negotiations could start with Ryan acknowledging that some items in his plan are unlikely to be accepted by Democrats, most notably, it said, repeal of the Affordable Care Act.

Actually, we were under the impression that the American voters took that issue off the table in the November election. The candidate who advocated repeal of the Affordable Care Act was defeated. The author of the health reform legislation, Barack Obama, was re-elected president.

Including repeal of Obamacare in a budget proposal can’t be considered a serious negotiating position. If that is considered worth discussion, then the Congressional Progressive Caucus’ budget proposal — almost the exact opposite of Ryan’s plan — ought to be getting more serious consideration.

The Progressive Caucus, led by Rep. Keith Ellison, D-Minn., unveiled a proposal last week called the Back to Work Budget. It raises taxes on incomes over $250,000 and spends $1 trillion on public works projects over 10 years. The aim is to reduce unemployment, not reduce the deficit.

The Progressive Caucus creates a tax rate of 49 percent for incomes over $1 billion, while Ryan’s top tax rate is 25 percent. Ryan’s plan boosts defense spending; the Progressive Caucus would cut it.

And instead of repealing Obamacare, the Progressive Caucus budget creates a public health insurance option. That’s another idea that has been defeated politically, but just in Congress, not by a vote in a presidential election. Of the two ideas, repealing Obamacare or adding a public health insurance option, the latter is the one that should have better standing.

Ryan’s budget, if the closing of unspecified loopholes works as advertised, balances in 10 years. The Back to Work Budget doesn’t, but Ellison said last week that the conversation needs to be about which budget puts more people to work, not how much can be cut.

We doubt the budget that emerges from negotiations will look much like either the Progressive Caucus’ proposal or Ryan’s, but we would prefer that it looked more like the Back to Work Budget.

The federal deficit is a serious problem, but attacking it with spending cuts alone is the wrong approach. The deficit will be a much smaller problem when the economy is at full employment. Getting to that point will be difficult, but economic growth should be the top priority of the federal budget.

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