July 1, 2011

Republican Budget Will Devastate Middle Class

By In Essays

Mr. President, this is a pivotal moment in the history of our country. In the coming days and weeks, decisions will be made about our national budget that will impact the lives of virtually every American in this country for decades to come.

At a time when the richest people and the largest corporations in our country are doing phenomenally well, and, in many cases, have never had it so good, while the middle class is disappearing and poverty is increasing, it is absolutely imperative that a deficit reduction package not include the disastrous cuts in programs for working families, the elderly, the sick, the children and the poor that the Republicans in Congress, dominated by the extreme right wing, are demanding.

In my view, the President of the United States of America needs to stand with the American people and say to the Republican leadership that enough is enough. No, we will not balance the budget on the backs of working families, the elderly, the sick, the children, and the poor, who have already sacrificed enough in terms of lost jobs, lost wages, lost homes, and lost pensions. Yes, we will demand that millionaires and billionaires and the largest corporations in America contribute to deficit reduction as a matter of shared sacrifice. Yes, we will reduce unnecessary and wasteful spending at the Pentagon. And, no we will not be blackmailed once again by the Republican leadership in Washington, who are threatening to destroy the full faith and credit of the United States government for the first time in our nation’s history unless they get everything they want.

Instead of yielding to the incessant, extreme Republican demands, as the President did during last December’s tax cut agreement and this year’s spending negotiations, the President has got to get out of the beltway and rally the American people who already believe that deficit reduction must be about shared sacrifice.

It is time for the President to stand with the millions who have lost their jobs, homes, and life savings, instead of the millionaires, who in many cases, have never had it so good.

Unless the American people by the millions tell the President not to yield one inch to Republican demands to destroy Medicare and Medicaid, while continuing to provide tax breaks to the wealthy and the powerful, I am afraid that is exactly what will happen.

So, I am asking the American people who may be listening today that if you believe that deficit reduction should be about shared sacrifice, if you believe that it is time for the wealthy and large corporations to pay their fair share, if you believe that we need to reduce unnecessary defense spending, and if you believe that the middle class has already sacrificed enough due to the greed, recklessness and illegal behavior on Wall Street, the President needs to hear your voice, and he needs to hear it now.

Go to my website: sanders.senate.gov and send a letter to the President letting him know that enough is enough! Shared sacrifice means that it’s time for the wealthiest Americans and most profitable corporations in America to pay their fair share and contribute to deficit reduction.

Mr. President, as you know, this country faces enormous challenges.

The reality is that the middle class in America today is collapsing and poverty is increasing.

When we talk about the economy, we have got to be aware that the official government statistics are often misleading. For example, while the official unemployment rate is now 9.1%, that number does not include the large numbers of people who have given up looking for work and people who want to work full-time but are working part time. And, when you take all of those factors into account, the real unemployment rate is nearly 16%.

Further Mr. President, what we also must understand is that tens of millions of Americans are working longer hours for lower wages. The reality is that over the last 10 years, median family income has declined by over $2,500.

As a result of the greed, recklessness and illegal behavior on Wall Street, which caused this terrible recession, millions more have lost their homes, their pensions, and their retirement savings.

Unless we reverse our current economic course our children will have, for the first time in modern American history, a lower standard of living than their parents.

Mr. President, we throw out a lot of numbers around here. But, I think it is important to understand that behind every grim economic statistic are real Americans who cannot find a decent paying job, and are struggling to feed their families, put a roof over their heads or to just stay afloat.

Last year, I asked my constituents in Vermont to share their personal stories with me — explaining how the recession, which started more than three years ago, has impacted their lives. In a matter of weeks, more than 400 Vermonters responded and I also heard from people throughout the country who are struggling through this terrible recession.

Their messages are clear. People are finding it hard to get jobs or are now working for lower wages than they used to earn. Older workers have depleted their life savings and are worried about what will happen to them when they retire. Young adults in their 20s and 30s are not earning enough to pay down college debt. People of all ages, all walks of life, from each corner of Vermont — have shared their stories with my office.

Let me just read a few of these letters:

The first is from a 51 year old woman from West Berlin, Vermont who wrote “Dear Mr. Sanders, Don’t really know what to say, I could cry. My significant other was out of work for a year, now he works in another state. I’ve been out of work since April. Our mortgage company wants the house because we can’t make the payments. I can’t find a job to save my soul that will pay enough to make a difference. How bad does it have to get! My mother went through the Great Depression and here we go again. I figure that I’m going to lose everything soon! I’m a well educated person who can’t see through the fog.”

A gentlemen in his mid-50’s from Orange County, Vermont wrote: “After being unemployed three times since 1999 due to global trade agreements, I now find myself managing a hazardous waste transfer facility that pays about 25% less than what I was making in 1999. My wife’s children have moved back in, unemployed. And we are saving very little for retirement. If things don’t improve soon we will likely have to work until we die. We consider ourselves lucky that we are employed. Our children’s friends tend to show up around meal time. They are skinny. We feed them. This is no recession, it’s a modern day depression.”

A woman in her late 40s from Westminster, Vermont wrote: “I am a single mom in Vermont, nearly 50. I patch together a full time job making $12 an hour and various painting jobs and still can’t afford to get myself out of debt, or make necessary repairs on my home. No other jobs in sight, I apply all the time to no avail. Food and gas bills go up and up, but not my income. I have no retirement at all, can’t afford to move, feeling stuck, tired, and hopeless.”

And a 26 year old young man from Barre, Vermont wrote: “In 2002, I received a scholarship to Saint Bonaventure University, the first in my family to attend college. Upon graduation in 2006, I was admitted to the Dickinson School of Law at Penn State University, and graduated in 2009 with $150,000 of student debt. In Western New York I could find nothing better than a $10 an hour position stuffing envelopes … I live in a small studio apartment in Barre without cable or internet … I have told my family I don’t want them to visit because I am ashamed of my surroundings … My family always told me that an education was the ticket to success, but all my education seems to have done in this landscape is make it impossible to pull myself out of debt and begin a successful career.”

Mr. President, just over the last two weeks, nearly 500 people from Vermont and throughout the U.S. have written me about their experiences with trying – often in vain – to find affordable dental care. One wrote: “I can’t afford health insurance so dental work is definitely out. I agree [that] … we are so backward in this country, even though studies have linked bad dental care to heart problems and cancer.”

Mr. President, when the Republicans are talking about trillions of dollars in savage cuts this is what they are talking about. They’re talking about throwing millions and millions of people off of Medicaid. Let me tell you what that means.

Earlier this year Arizona passed budget cuts that took patients off its transplant list. As a result people who were kicked off the list have died. Not because they couldn’t find a donor but because the state decided it could no longer afford to pay for their transplants. To make matters worse Arizona’s Governor has gone further, asking the federal government for a waiver to kick off another 250,000 from its Medicaid program.

They’re talking about making it impossible for working class families to send their kids to college. They’re talking about cuts in nutrition programs which will increase the amount of hunger in America, which is already at an all time high. According to a 2009 study, there are over 5 million seniors who face the threat of hunger, almost 3 million seniors who are at risk of going hungry, and almost 1 million seniors who do go hungry because they cannot afford to buy food. The Republicans in Congress would make this situation much, much worse.

Mr. President, this is a lot of pain that the Republicans are tossing out while they want to protect their rich and powerful friends. In my view, the president has got to stand tall, take the case to the American people, and hold the Republicans responsible if the debt ceiling is not raised and the repercussions of that.

That, Mr. President, is what’s going on in the real world. People fighting to keep their homes from falling into foreclosure; struggling with credit card debt; marriages have been postponed; lives have been derailed; and retirement savings have been raided to pay for college tuition, to keep their businesses afloat, or simply to keep gas in their car and pay their bills. That is what is going on in the real world.

And, Mr. President, while the middle class disappears and poverty is increasing, there is another reality and that is that the gap between the very rich and everyone else is growing wider and wider. The United States now has, by far, the most unequal distribution of wealth and income of any major country on earth.

Today, the top one percent earns over 20 percent of all income in this country, which is more than the bottom 50 percent earns. Over a recent 25 year period, 80 percent of all new income went to the top one percent. In terms of the distribution of wealth, as hard as it may be to believe, the richest 400 Americans own more wealth than the bottom 150 million Americans.

The rich get richer, the poor get poorer, and the middle class continues to disappear. That is what is going on in this country in the year 2011, and we have all got to understand that.

Mr. President, everybody knows this country faces a major deficit crisis and we have a national debt of over $14 trillion. What has not been widely discussed, however, is how we got into this situation in the first place. A huge deficit and huge national debt did not happen by accident. It did not happen overnight. It happened, in fact, as a result of a number of policy decisions made over the last decade and votes that were cast right here on the floor of the Senate and in the House.

Let’s never forget, as we talk about the deficit situation, that in January of 2001, when President Clinton left office, this country had an annual federal budget surplus of $236 billion with projected budget surpluses as far as the eye could see. That was when Clinton left office.

What has happened in the ensuing years? How did we go from huge projected surpluses into horrendous debt? The answer, frankly, is not complicated. The CBO has documented it. There was an interesting article on the front page of the Washington Post on April 30, talking about it as well. Here is what happened.

When we spend over $1 trillion on wars in Afghanistan and Iraq and choose not to pay for those wars, we run up a deficit. When we provide over $700 billion in tax breaks to the wealthiest people in this country and choose not to pay for those tax breaks, we run up a deficit. When we pass a Medicare Part D prescription drug program written by the drug companies and the insurance companies that does not allow Medicare to negotiate prescription drug prices and ends up costing us far more than it should — $400 billion over a 10-year period — and we don’t pay for that, we run up the deficit. When we double military spending since 1997, not including the wars in Afghanistan and Iraq, and we don’t pay for that, we drive up the deficit.

Further, Mr. President, the deficit was also driven up by the greed, recklessness and illegal behavior on Wall Street, which caused the worst economic crisis since the Great Depression. Millions of Americans lost their jobs and revenue was significantly reduced as a result.

Mr. President, the end result of all of these unpaid-for policies and actions – year after year of the deficits I just described – is a staggering amount of debt. When President Bush left office, President Obama inherited an annual deficit of $1.3 trillion with deficits as far as the eye could see, and the national debt more than doubled from when President Bush took office.

The reality is Mr. President, if we did not go to war in Iraq, if we did not pass huge tax breaks for millionaires and billionaires, who didn’t need them, if we did not pass a prescription drug program with no cost control written by the drug and insurance companies, and if we did not deregulate Wall Street, we would not be in the fiscal mess that we find ourselves in today. It really is that simple.

In other words, the only reason we have to increase our nation’s debt ceiling today is that we are forced to pay the bills that the Republican leadership in Congress and President Bush racked up.

Now, Mr. President, given the decline in the middle class, given the increase in poverty, and given the fact that the wealthy and large corporations have never had it so good, Americans may find it strange that the Republicans in Washington would use this opportunity to make savage cuts to Medicare, Medicaid, education, nutrition assistance, and other lifesaving programs, while pushing for even more tax breaks for the wealthy and large corporations.

Unfortunately, it is not strange. It is part of their ideology. Republicans in Washington have never believed in Medicare, Medicaid, federal assistance in education, or providing any direct government assistance to those in need. They have always believed that tax breaks for the wealthy and the powerful would somehow miraculously trickle down to every American, despite all history and evidence to the contrary.

So, in that sense, it is not strange at all that they would use the deficit crisis we are now in as an opportunity to balance the budget on the backs of working families, the elderly, the sick, the children and the poor, and work to dismantle every single successful government program that was ever created.

And, that’s exactly what the Ryan Republican budget that was passed in the House of Representatives earlier this year – and supported by the vast majority Republicans here in the Senate just last month – would do. Here are just a few examples:

The Republican budget passed by the House this year would end Medicare as we know it within 10 years.

The non-partisan CBO estimates that under the Ryan proposal, in 2022, a private health care plan for a 65-year-old equivalent to Medicare coverage would cost about $20,500, yet the Republican budget would provide a voucher for only $8,000 of those premiums. Seniors would be on their own to pay the remaining $12,500 – a full 61% of the total. How many of the 20 million near-elderly Americans who are now ages 50-54 will be able to afford that? This approach would transfer control of Medicare to insurers and there would be no guaranteed benefits, essentially ending Medicare as we know it.

The Republican budget would force 4 million seniors in this country to pay $3,500 more, on average, for their prescription drugs by re-opening the Medicare Part D donut hole.

Under the Republican budget, nearly 2 million children would lose their health insurance over the next 5 years by cuts to the Children’s Health Insurance Program, according to the Congressional Budget Office.

At a time when 50 million Americans have no health insurance, the Republican budget would cut Medicaid by over $770 billion, causing millions of Americans to lose their health insurance and cutting nursing home assistance in half – threatening the long-term care of some 10 million senior citizens.

The Republican budget would completely repeal the Affordable Health Care Act preventing an estimated 34 million uninsured Americans from getting the health insurance they need.

At a time when the cost of a college education is becoming out of reach for millions of Americans, the Republican budget would slash college Pell grants by about 60% next year alone – reducing the maximum award from $5,550 to about $2,100.

At a time when over 40 million Americans don’t have enough money to feed themselves or their families, the Republican budget would kick up to 10 million Americans off Food Stamps, by slashing this program by more than $125 billion over the next decade.

At a time when our nation’s infrastructure is crumbling, the Republican budget passed in the House and supported by all but a handful of Republicans here in the Senate would slash funding for our roads, bridges, rail lines, transit systems, and airports by nearly 40 percent next year alone.

Yet despite the fact that military spending has nearly tripled since 1997, the House Republican budget does nothing to reduce unnecessary defense spending. In fact, defense spending would go up by $26 billion next year alone under the Republican plan.

Interestingly enough, at a time when the rich are becoming richer, when the effective tax rates for the wealthiest people, at 18 percent, are about the lowest on record, at a time when the wealthiest people have received hundreds of billions of dollars in tax breaks, at a time when corporate profits are at an all-time high and major corporations making billions of dollars pay nothing in taxes, my Republican colleagues, in their approach toward deficit reduction, do not ask the wealthiest people or the largest corporations to contribute one penny more for deficit reduction.

In fact, the Republican budget would keep the good times rolling for those who are already doing phenomenally well – it provides over $1 trillion in tax cuts to millionaires and billionaires by permanently extending all of the Bush income tax cuts; reducing the estate tax for multi-millionaires and billionaires; and lowering the top individual and corporate income tax rate from 35 to 25 percent.

Mr. President, the Republican idea of moving toward a balanced budget is to go after the middle-class, working families, and low-income people, and to make sure the millionaires and billionaires and largest corporations in this country that are doing phenomenally well do not have to share in the sacrifices being made by everybody else. They will be protected. The Republican approach to deficit reduction in Washington is the Robin Hood philosophy in reverse: taking from the poor and giving to the rich.

And it’s not as if it’s good for our economy. Mark Zandi, the former economic advisor to John McCain when he was running for president, has estimated that the Republican budget plan will cost 1.7 million jobs by the year 2014, with 900,000 jobs lost next year alone.

The House Republican budget is breathtaking in its degree of cruelty.

It’s about time that Washington listened to the American people. Let’s reduce the deficit. But, let’s do it in a fair and responsible way that requires shared sacrifice from the wealthiest Americans and most profitable corporations.

I thank the President and I yield the floor.

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