Sanders pushing for budget that eliminates loopholes, raises revenue
NEAL P. GOSWAMI
BENNINGTON -- With $85 billion in sequestration cuts slowly setting in, Vermont Sen. Bernie Sanders is focusing on crafting a federal budget that closes tax loopholes for the wealthy and corporations and protects low- and middle-income Americans.
The independent senator, one of the most progressive in the upper chamber, is working with his Democratic colleagues on the Senate Budget Committee. The committee is expected to begin working on a 10-year budget plan this week, which should hit the Senate floor later this month.
Funding for a plethora of government programs is due to run out on March 27. The promise of passing a budget before then, given the gridlock in Washington, is minimal. House Republicans are simultaneously working on a continuing resolution to keep the government funded.
Sanders, in a telephone interview Monday, said he is not yet willing to consider a continuing resolution, and certainly not one that has yet to emerge from the House.
"We’ll see what the continuing resolution is," Sanders said. "I don’t want to talk about hypotheses."
In the meantime, Budget Committee Chairwoman Sen. Patty Murray, D-Washington, is leading budget discussions among Democrats, with whom Sanders caucuses. Republicans are not yet in the mix.
Nonetheless, the outspoken Sanders is not holding back on his assessment of Republicans’ budget aims already expressed in the media, calling them "fairly stupid."
Sanders said lawmakers and President Barack Obama have already reduced the federal budget by about $2.5 trillion over 10 years in previous agreements, including $650 in new revenue through higher taxes on the wealthy. Sanders is now seeking to close tax loopholes to raise additional revenue rather than slashing programs like Social Security, Medicare and the (Low Income Home Energy Assistance Program).
"Unfortunately, my Republican friends are saying that the only way they want to go forward is by cutting, cutting and cutting," he said. "The major flaw in the Republican strategy is that it makes no sense at all to simply cut, cut and cut programs for people who are already hurting in a troubled economy."
Sanders is opposed to slashing benefits in Social Security and Medicare. However, he plans to introduce legislation that would allow income over $250,000 to be taxed to support the program, according to spokesman Michael Briggs. All income up to $113,700 would continue to be subject to the payroll tax.
Briggs said Sanders also supports allowing the government to negotiate prescription drug prices in the Medicare Part D program. That could save nearly $160 billion, Briggs said.
Large corporations and wealthy Americans continue to do "phenomenally well." Sanders’ argument in this prolonged budget debate is clear: Many corporations have avoided paying taxes by exploiting the tax code and should pay more.
According to Sanders, one out of four major corporations currently pays no federal taxes. He said the tax rate on corporate profits is lower than it has been since 1972.
Bank of America, according to Sanders, has set up more than 200 subsidiaries since 2010 in the Caymen Islands where the corporate tax rate is zero. Not only did Bank of American not pay federal taxes, it received a rebate from the IRS, Sanders said.
"These are the kinds of outrageous loopholes that we have to address rather than cutting," he said. "The focus that I am working on is saying, ‘Yes, deficit reduction is important. We’ve got to cut. But, we’ve got to do it in a balanced way."
Republicans, led by House Speaker John Boehner, disagree. Boehner reiterated his opposition to raising new revenue Sunday on NBC’s "Meet the Press," instead focusing Washington’s "spending problem."
"They say they don’t want to go any further and I say that in the middle of a recession, when the middle class in this country is disappearing Š I am not going to support cuts in benefits for working families, the elderly or children," Sanders said. "When Boehner makes his statement, what you’ve got to understand -- and I know a lot of Americans don’t understand this -- is that today, revenue as a percentage of GDP, is at 15.8 percent. That is the lowest that it has been in almost 60 years."
The last time the federal government balanced the budget was during the Clinton administration, when revenue was about 20 percent of GDP, Sanders said.
Cutting spending without raising additional revenue by closing tax loopholes will have a negative impact on an already hobbled economy, according to Sanders. "What that will do is not only cause significant suffering for people who are already suffering, it would also be an austerity budget that would create significantly more unemployment," he said.
A more balanced approach will create jobs through infrastructure improvements while protecting the country’s most vulnerable citizens, Sanders argued.
"I think the American people have been very clear in every poll that I have seen that it makes much more sense to end these tax havens in the Cayman Islands then to cut programs and entitlements," he said.
The Republican approach, espoused by Boehner, "is absolutely dead wrong," according to Sanders. He said he will "fight vigorously" for closing loop holes. However, he declined say how he will vote on a budget plan that does include that additional revenue.
"I think it’s fair to say that with virtually universal support in the House and Senate, the Republicans do not want to raise any more revenue, they don’t want to close any loop holes," he said.
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