The Next Debtpocalypse: Fiscal Meltdowns in the States

 

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Inside the plan to gut state budgets and keep corporate America happy.

—By Siddhartha Mahanta

Fri Aug. 12, 2011 3:00 AM PDT

With the dust settling after the debt ceiling fight, Republicans—along with a few Democrats—are moving on to their next agenda item: blocking states from collecting millions in much-needed tax revenue from corporations.

The Business Activity Tax Simplification Act, or BATSA, passed out of the House Judiciary Committee in early July and is set to be taken up by the full House when Congress returns from its August recess. The bill, which is sponsored by Rep. Bob Goodlatte (R-Va.), would forbid state and local governments in the 44 states that collect corporate income taxes from taxing a sizable chunk of corporate profits. How sizable? The nonpartisan Congressional Budget Office, which scored a previous version of the bill in 2006, estimated that state revenue losses would explode to $3 billion annually within five years of enactment. Michael Mazerov, a senior fellow at the Center for Budget and Policy Priorities, says BATSA's current incarnation protects an even larger portion of corporate profits than the earlier bill, so state revenue losses could be even higher than the CBO projected. And here's the kicker: since no federal revenue is lost in the process, it's no skin off the backs of lawmakers in Washington.

The basic theory behind BATSA is that states shouldn't have the right to tax companies with permanent headquarters located in other states. The current bill allows for taxation of businesses that have employees within a state for more than 15 days, but that exception is actually very easy to avoid. Consider a bank with branches in multiple states that, like most major commercial banks, is an active player in the mortgage loan business. These kinds of banks often hire independent contractors to process mortgage applications. But under BATSA, a state wouldn’t be able to tax the bank for profits it reaped within its borders, because the contractors wouldn't count as "employees."

Congress has considered some version of BATSA every year since 2000. Each time, a coalition of groups—the National Governors Association, the Multistate Tax Commission, and a combination of state and local organizations and public employee unions—have managed to beat it back. But the tide could be turning. After the bill's markup in July—just the second time BATSA has made it out of committee—Americans for Tax Reform, Grover Norquist's anti-tax advocacy group, rejoiced.

Someone should tell the anti-tax activists, though, that their support for the bill could undermine corporate America's long-term financial stability. Without BATSA, ATR argues, corporations "that receive no direct benefit from the state"—i.e., those that are based elsewhere—are forced to bear a bigger share of the tax burden. But the roads, bridges, and other elements of basic infrastructure that those tax revenues pay for help transform states into attractive places for private investment. Lower corporate tax rates, while keeping more money in shareholder pockets, also mean less money for states to spend on physical infrastructure and the manpower to maintain that infrastructure. Over the long haul, that makes states far less lucrative environments for companies to set up shop. By helping businesses shirk their tax obligations in the short term, in other words, BATSA threatens their prospects for future growth.

BATSA isn't the only revenue-gutting bill making its way through the Congressional pipeline. House Republicans aim to bring another half dozen-or-so bills like it—collectively known as "state tax preemption" bills—that offer corporations massive carve-outs while slowly chipping away at states' abilities to collect taxes. Most of them are vaguely worded and benefit companies with multi-state presences—in other words, very big businesses. They include the Permanent Internet Tax Freedom Act, which would prevent states and localities from taxing Internet service providers, and the Wireless Tax Fairness Act, which establishes a moratorium on any new taxes or fees on cell phone service providers.

Lars Etzkorn, the program director at the National League of Cities, which advocates for the interests of municipalities around the country, says that state tax preemption effectively neuters local governments. "You're taking local accountability and local decision-making from where we think it belongs, and where there's a history of good financial stewardship, and instead having people in Washington… imposing their system, their will on local governments," Etzkorn says.

So even as businesses rail against overtaxation and crippling regulation, it turns out that they still rely on the federal government to protect them from states and municipalities. "Business people understand very well that they're creating new loopholes" with these bills, Mazerov says. When it’s convenient, it seems, even corporate America doesn’t mind a little nannystateism.

The chart above shows the percentage of adjusted gross income (AGI) that different income groups of Americans pay in federal income tax. We chose the top categories ($500,000 to $1,000,000, and over $1,000,000) and matched them up with the some middle class numbers ($30,000 to $40,000, and $50,000 to $60,000). The data in these sets comes from IRS Publication 1304.

As you can see, there are two major points: one, the overall percentage both groups pay in federal income taxes has fallen over the last twenty years or so, and two, when Congress makes a major income tax policy change, it affects the top earners much more than other groups.

Adjusted gross income is defined as income minus adjustments, meaning after deductions. Of course in addition to federal income taxes there are employee contributions to Social Security, which are usually 6.2% of earnings (but are 4.2% in 2011 because of the payroll tax deduction) up to $106,800, which subsequently has a greater effect on the income below that limit than above. There's also Medicare withholding, which is 1.45% of earnings, and since both are set rates, they by nature have greater effect the less you earn.

Income taxes are also progressive in nature, meaning that as earners move up the ladder, they pay a higher rate on larger amounts of income, but only the income that reaches the next bracket. So for the 2011 tax year, a single person who has an AGI of $8,500, the limit of the bottom bracket, pays 10% on their taxable earnings. The person who makes $10,000 pays 10% on their taxable income up to that first bracket limit ($8,500) and then 15% on the income in the second $1,500, and so on. The highest rate is 35% on income above $379,150. 

On point one, progressives have long pointed out the drop in taxes paid by upper income earners: in 1986 those making more than $1,000,000 paid 40.2% of their AGI in income tax, and in 2009 that percentage was 24.2, after hitting a low of 22.1% in 2006. The drop after the Tax Reform Act of 1986 is evident, then growth after the Budget Act of 1990 and the broken promise of "no new taxes," the slight continued increase after the Budget Act of 1993 under President Clinton, then a gradual drop in the 1990s until the more pronounced fall after the Bush tax cuts.

The taxpayers in the middle class rungs though, saw a steady decline over that time period. Those in the $50-$60k category went from paying 15.5% of their AGI to federal income taxes in 1986 to paying 6.3% in 2009, and earners who made $30-$40k went from 12.2% in 1986 to 4% in 2009. Simply, many Americans are paying less in taxes over this time period. 

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The second point here is that as you can see from the numbers, when Congress makes a major change in income tax policy, most adjustments are going to affect the top earners. And not just in a narrative that fits around tax cuts for the rich at the expense of all other taxpayers: the chart also shows increases in the percentage of AGI paid by those with high incomes in times of recession, like in 1990 and 1993 (when taxes were raised) and even after 2007-2008. The obvious exception here is the early 2000s recession, when the Bush tax cuts went into effect, and AGI paid in taxes by the rich plunged as government surpluses disappeared. 

Of course, the current (2006-2009) slim increase in AGI paid by high earners could also mean that those in the higher income tax brackets are seeing more money come in, and subsequently have to pay more out in taxes, versus the middle class payers who have seen wages stagnate in the last few years and therefore had to pay less. The Congressional Budget Office has been documenting the rising inequality gap, and this could provide some secondary proof of that trend. 

And of course, this chart and analysis is about federal income taxes paid on wages, and for the high end earners, there are many more forms of typical income.

The Budget Deficit and the Debt What You Need to Know

The Budget Deficit and the Debt
What You Need to Know

 

1. The deficit is the gap between what the government spends and the revenues it collects each year. We didn’t always run deficits. When President Clinton left office, the federal budget was running a surplus of $236 billion, or about 2% of the U.S. economy. And that extra revenue was being used to pay down the national debt. To understand how we moved from big surpluses to a growing deficit, it’s helpful to examine each of the major factors driving our nation’s current deficits.
2. Every million additional jobs we generate reduces the deficit by $54 billion.
3. It’s misleading (and dangerous) to confuse the short-term budget shortfall with the medium-term deficit or the long-term debt. Here’s a way of understanding it:
   1. The Short-Term Recession Shortfall (1-3 years): The Great Recession was responsible for 61 percent of the deficit last year.
      1. Tax receipts fell as people lost jobs and income and businesses failed; federal tax revenues declined from 18.5% of GDP in 2007 to 14.8%.
      2. Spending rose with government supports such as unemployment insurance, the Recovery Act, TARP funds, payments to Fannie Mae and Freddie Mac and discretionary outlays for defense spending, from 19.6% of GDP in 2007 to 24.7%.
   2. The Medium-Term Bush Deficit (10 years):
      1. We ran a $236 billion surplus before the Bush tax cuts, but we have run deficits for the past 9 years.
      2. The ten-year projected deficit is entirely explained by the economic downturn, the Bush tax cuts and the wars in Afghanistan and Iraq. Bush tax cuts and the wars made up $500 billion of the 2009 deficit and will create $6 trillion in deficits and debt service over the next decade.
   3. The Long-Term Health Care Costs Debt (30 years +):
      1. The rapidly rising cost of private health care—doctor’s visits, prescription drugs, procedures—is the only truly unsustainable part of the long-term budget. If U.S. health care costs weregrowing at the rate of other wealthy countries, we would have no long-term debt problem.
      2. Social Security does not significantly contribute to the long-term debt picture. Its total shortfall is projected to be 0.7% of total GDP of the next 75 years, a small effect on the budget compared to the economic downturn and the Bush-era tax cuts, which will, over the next decade, consume 1.5% and 2.6% of GDP respectively.
4. A bi-partisan taskforce has identified over $1 trillion in defense spending that could be saved over ten years to reduce the deficit without jeopardizing national security.
5. The claim that the United States faces over $63 trillion in liabilities, unfunded retirement and health care obligations is based on deceptive and misleading figures-which are based on projections of health care costs over 75 years, and assumes no changes in tax revenues or reductions in health care costs.
   1. The CBO estimates that between 2012 and 2020, the debt held by the public will only rise by around 1%, far from the rapid ballooning that these claims make.
6. Most economists agree that debt held by the public—rather than gross debt—is the proper measure on which to focus because that’s what really affects the economy. Studies showing the U.S. near a debt “tipping point” of 90% of GDP make improper comparisons between the U.S and other countries. 
7. Contrary to general belief, high debt does not necessarily lead to slow growth, but rather slow growth can lead to growth in debt.

Fiscal FactCheck

Does Washington have a spending problem or an income problem? We offer some key facts.
July 15, 2011 

 Summary

Washington's spending has recently been higher as a percentage of the nation's economic output than at any time since World War II. But by the same measure, Washington's revenues are the lowest in more than 60 years.

So does the U.S. have "a spending problem," as Republicans keep repeating in the current debate over how to reduce the nation's record deficits? Or is the problem that taxes are not high enough? Those questions frame a long-running partisan debate, and as usual we won't offer an opinion one way or the other. But for those seeking their own answers, we can offer some fiscal history and factual context.

Some key facts we think are worth considering:

*  Federal spending ("outlays" in budget jargon) is expected to equal 24.1 percent of the nation's gross domestic product in the current fiscal year, which ends Sept. 30. The figure was 25 percent in fiscal year 2009, highest since 1945.

*  On the other hand, federal revenues are expected to drop to 14.8 percent of GDP this year, lower even than the 14.9 percent attained in both 2009 and 2010. There has been only one year since World War II when revenues have been as low as in any of these years: 1950, when the figure was 14.4 percent.

*  These historically high rates of spending and low rates of taxation have combined to produce a chain of deficits that are also the highest since WWII. The deficit was 10.0 percent of GDP in fiscal 2009. It declined to 8.9 percent last year as the economy started to recover, but is projected to go up to over 9 percent this year. Each of these deficits is larger than in any year since 1945, measured as a percentage of GDP.

*  The U.S. is borrowing about 36 cents of every dollar spent so far this year. It borrowed 37 cents on the dollar last year, and 40 cents in fiscal 2009.

*  The largest components of federal spending are Social Security and Medicare programs for the elderly (33.5 percent of total outlays in 2010) and national defense (20.1 percent). Interest payments on the federal debt alone accounted for 5.7 percent of all federal spending, and that percentage is rising.

*  The federal income tax accounted for 41.5 percent of federal receipts in 2010 (down from 49.6 percent prior to the Bush tax cuts of 2001 – 2003). Corporate taxes brought in only 8.9 percent, also down sharply since the recent recession. Payroll taxes and other "social insurance" payments accounted for 40 percent of total receipts in 2010.

It's easy to argue one side or the other by just citing facts that support a particular view, and omitting others. In the Analysis that follows, we offer some graphics, details and documentation in an attempt to give our readers a quick look at the entire picture — both where the money goes, and where it comes from.

Analysis

A glance at this chart quickly puts our current fiscal mess in historical context. We created it using historical budget data from the federal Office of Management and Budget, updated with the most recent estimates of the current fiscal year's outlays and receipts from the nonpartisan Congressional Budget Office, issued June 22 as part of CBO's 2011 long-term budget outlook.

Not since the enormous effort required to defeat Nazi Germany and Japan in WWII has the gap between Washington's spending and its revenues been so large, as a portion of the economy. Then, taxes were increased sharply to pay for the war, but spending increased even faster. In recent years, Washington has increased spending while cutting taxes.

The current situation is a marked change from the booming 1990s. In those years revenues increased, due to a 1993 tax increase, which fell most heavily on those making more than $200,000 a year. Meanwhile spending decreased relative to the rapidly growing economy, partly because of an absolute decline in military spending following the collapse of the Soviet Union in 1991. Deficits were erased, and the government posted surpluses in fiscal 1998, 1999, 2000 and 2001.

But then a string of deficits began in the fiscal year 2002, and there is no end in sight. For the current year, the administration originally projected in February a deficit equal to 10.9 percent, a new postwar record. The Congressional Budget Office in April, using different economic assumptions, projected that enacting the president's budget would produce a deficit of 9.5 percent of GDP, and that making no changes to current law would result in a deficit of 9.3 percent of GDP.

What has produced these huge budget gaps? Tax cuts and wars have been big factors, as have recessions and expanded spending for health care in both Republican and Democratic administrations. For example:

• Income-tax receipts are down sharply since the Bush tax cuts. In fiscal 2000, the year before the cuts began to take effect, receipts from the federal income tax on individuals amounted to 10.2 percent of GDP. That figure was down to 6.2 percent of GDP last year.
• Spending for the military and for homeland security has risen substantially since the attacks of Sept. 11, 2001. Spending for national defense rose from 3.0 percent of GDP that year to 4.8 percent last year.
• Non-military spending also has continued to rise. President George W. Bush pushed through an expensive prescription drug benefit for seniors in 2003, the largest expansion of Medicare in its history. In the financial crisis of 2008, Bush also pushed for and signed for a massive banking bailout. In early 2009, President Barack Obama pushed for and signed an expensive stimulus measure, and after a long fight in Congress he signed another expensive plan, the health care law, in March of last year, aimed at expanding coverage for millions who lack health insurance.
• Two economic recessions have had their effect. The recession of 2001 began in March and lasted until November. And the worst downturn since the Great Depression began in December 2007 and continued until June 2009. In both cases unemployment remained high for long after business activity began to recover, holding back both wages and the taxes that jobless workers would have paid on them.

We won't attempt to assign blame to one party or the other for the deficits. There is plenty of blame to go around, some of which rests with an American public that won't accept cuts in the largest categories of public spending, and also resists tax increases on anybody but "the rich."

Where Does It Go?

The biggest share of federal spending now goes for Social Security (20.4 percent in 2010) and Medicare (13.1 percent), the two entitlement programs that big majorities of Americans want to protect from any reductions, according to a recent poll. Together these two programs for senior citizens consume more than one-third of spending, far more than national defense, which accounts for just 20.1 percent, despite the increases of recent years.

Some categories that are unpopular with much of the public turn out to represent a fairly small part of total spending. Foreign aid, for example, amounts to less than 1 percent of the entire budget — even counting in military assistance to Israel, Egypt, Iraq and Afghanistan. All agriculture programs — including farm subsidies — make up just over one-half of 1 percent.

Where Did It Go? Major components of the $3.5 trillion spent in fiscal 2010
Social Security	20.4%
National Defense	20.1%
Medicare	13.1%
Medicaid/CHIP	8.1%
Interest	5.7%
Low-Income Assistance	5.3%
Unemployment Compensation	4.6%
Education & Training	3.7%
Federal Employee Retirement	3.5%
Veterans	3.1%
Transportation	2.7%
Other health care	2.6%
Parks & natural resources	1.3%
Space/Science	0.9%
Foreign aid	0.9%
Agriculture	0.6%
Everything else	3.5%

The wildly unpopular TARP program, used to finance banks, a big insurance company and two U.S. auto companies, is now actuallybringing billions back into the Treasury, as old loans are repaid and government-owned stock is sold to the public. The nonprofit investigative project Pro Publica figures that $322 billion has now flowed back into the Treasury, of the $573 billion loaned, invested or spent originally. And even the Obama administration's $787 billion stimulus program, so excoriated by Republicans, has nearly run its course. It was enacted in 2009, and according to the official Recovery.gov website, had spent 84 percent of the total as of June 30. That included 90 percent of the tax benefits, 83 percent of entitlements, and 78 percent of contracts, grants and loans.

Borrowing 36 Cents on the Dollar

The current gap between tax revenue and congressionally approved spending is so great that so far this fiscal year the federal government has borrowed an average of 36 cents of every dollar paid out. According to the most recent "Monthly Budget Review," issued by the Congressional Budget Office on July 8, the total spent through the end of June (the first nine months of the current fiscal year) was estimated at $2.705 trillion. But government receipts fell $973 billion short of spending, CBO estimates.

The good news — if it can be called that — is that the huge deficit is running at $31 billion lower than last year at this time. Spending is higher (Medicaid is up 6 percent over last year, for example), but federal income tax receipts are running higher as well. CBO credited "higher wages and more employment" than last year for the increase in tax revenue. And borrowing 36 cents on the dollar is an improvement of sorts. For all of fiscal 2009, the deficit amounted to 40 cents of every dollar spent, and it was 37 cents in fiscal 2010.

Where the Money Comes From

Taxes make up the vast bulk of federal revenues, of course. Individual income-tax payers supplied 41.5 percent of all federal revenues in fiscal 2010, but Social Security and Medicare payroll taxes paid both by workers and their employers made up nearly as much. Combined with federal unemployment insurance taxes and a few others, these social insurance taxes made up 40 percent of revenues. The income tax on corporations brought in just under 9 percent, while excise taxes, on such things as gasoline and diesel fuel, alcoholic beverages and telecommunications services, brought in just over 3 percent.

We found a surprising bit of news buried in the "other" category, which made up 6.5 percent of all revenue.

Breakdown of "other" in 2010
(Percent of total revenues)
Federal Reserve	3.5%
Customs	1.2%
Misc	1.0%
Estate & Gift	0.9%
Total "Other"	6.5%

It turns out that in 2010, more than half of that category came from profits made by the Federal Reserve System, whose lending operations expanded dramatically to address the financial crisis that started in 2007. The Fed's payments to the Treasury made up 3.5 percent of all federal revenue in 2010 — nearly $76 billion. The rest of the "other" category is made up of customs duties (1.2 percent of all revenue), federal estate and gift taxes (0.9 percent), and miscellaneous sources.

Who Pays?

Who pays all of these taxes? The best information on thatcomes from the Congressional Budget Office, which has tracked the tax burden for many years. The most recent complete data cover 2007. CBO figured in that year more than half of all federal taxes was paid by the top 10 percent of income earners. They paid 55 percent of all federal taxes in 2007, CBO said.

That's a comprehensive figure, counting the income tax, payroll taxes, excise taxes and even the corporate income tax (borne by stockholders in the form of reduced dividends and appreciation). And perhaps surprisingly, the top 10 percent of earners pay a greater share of federal taxes now than they did before the Bush tax cuts, which Democrats constantly criticize as a giveaway to "the rich." The top 10 percent paid 50 percent of all federal taxes in 2001.

However, that comes in spite of lower tax rates at the top, not because of it. The reason the most affluent 10 percent pay a greater share of taxes is that they are getting a greater share of all income. Their share of all pre-tax income went from 37.5 percent in 2001 to 42 percent in 2007.

One figure that gets a lot of attention is the percentage of individuals and married couples who pay zero federal income taxes. Those figures come from the nonpartisan Tax Policy Center. The TPC's most recent report was released June 14, and it shows that this year 46.4 percent of "tax units" (individuals or married couples) had zero federal income tax liability. That's because of various exemptions and tax credits aimed at reducing the income-tax burden on lower-income workers and families with children. The figure is down from 2008 and 2009, when the percentage topped out at 50.8 percent.

But practically all workers (and their employers) pay Medicare taxes on every dollar of wages, and Social Security taxes on every dollar of wages up to $106,800. Consequently, those who pay no federal income or payroll taxes at all amount to only 18.1 percent this year, the Tax Policy Center figures.

There's plenty more where these figures came from. We could focus more closely on what was paid and earned by the top 1 percent, for example. Or we could zoom in to examine the role of rising medical and drug costs in pushing up spending for Medicare and Medicaid. We may well visit those subjects in future articles. For now, we've tried to give a quick, accurate and balanced look at the big picture: Both where Washington spends, and where its money comes from.

– by Brooks Jackson

Sources

Office of Management and Budget. "Fiscal 2012 Budget of the United States, Historical Tables:Table 1.3—Summary Of Receipts, Outlays, And Surpluses Or Deficits (−) In Current Dollars, Constant (Fy 2005) Dollars, And As Percentages Of Gdp: 1940–2016"  14 Feb 2011.

Congressional Budget Office. "CBO's Long-Term Budget Outlook: Supplemental Data" 22 Jun 2011.

U.S. Congress, Joint Committee on Taxation, "Estimated Budget Effects of the Revenue Provisions of H.R. 2264. (The Omnibus Budget Reconciliation Act of 1993) As Agreed to by the Conferees" 4 Aug 1993.

Office of Management and Budget. "Fiscal 2012 Budget of the United States, Historical Tables:Table 2.3—Receipts by Source as Percentages of GDP: 1934–2016 "  14 Feb 2011.

Office of Management and Budget. "Fiscal 2012 Budget of the United States, Historical Tables:Table 3.1—Outlays by Superfunction and Function: 1940–2016"  14 Feb 2011.

Connolly, Ceci  and Mike Allen "Medicare Drug Benefit May Cost $1.2 Trillion; Estimate Dwarfs Bush's Original Price Tag" Washington Post. 9 Feb 2005.

Johnson, Allen "Bush signs $700 billion financial bailout bill" MSNBC.com. 3 Oct 2008.

The Associated Press, "Obama: Stimulus lets Americans claim destiny: President signs $787 billion program into law in Denver Tuesday" 17 Feb 2009.

Stolberg, Sheryl Gay and Robert Pear, "Obama Signs Health Care Overhaul Bill, With a Flourish" New York Times. 23 Mar 2010.

National Bureau of Economic Research, "US Business Cycle Expansions and Contractions" undated. Accessed 15 Jul 2011.

King, Jr., Neil and Scott Greenberg "Poll Shows Budget-Cuts Dilemma: Many Deem Big Cuts to Entitlements 'Unacceptable,' but Retirement and Means Testing Draw Support" Wall Street Journal 3 March 2011.

Cohen, Jon and Dan Balz, "Poll shows Americans oppose entitlement cuts to deal with debt problem," Washington Post. 20 Apr 2011.

U.S. Department of State, "Foreign Assistance Budget" undated. Accessed 11 Jul 2011.

U.S. Treasury, "$1.7 Billion Additional TARP Funds Returned to Taxpayers, Positive Return on TARP Bank Programs Reaches $10 Billion" press release. 5 Jul 2011.

Pro Publica, "The State of the Bailout" undated. Accessed 11 Jul 2011.

U.S. Government, Recovery.gov "Overview of Funding" undated. Accessed 11 Jul 2011.

Congressional Budget Office, "Monthly Budget Review" 8 Jul 2011.

Congressional Budget Office, "Monthly Budget Review" 5 Nov 2010.

Office of Management and Budget. "Fiscal 2012 Budget of the United States, Historical Tables:Table 2.5—Composition of "Other Receipts": 1940–2016"  14 Feb 2011.

Board of Governors of the Federal Reserve System, "What does it mean that the Federal Reserve is 'independent within the government'?" 17 Jun 2010.

Congressional Budget Office, "Average Federal Taxes by Income Group" Jun 2011.

Congressional Budget Office, "Shares of Federal Tax Liabilities for All Households, by Comprehensive Household Income Quintile, 1979-2007" Jun 2010.

Congressional Budget Office, "Pre-Tax Income Shares All Households, by Household Income Category, 1979-2007" Jun 2010.

Urban-Brookings Tax Policy Center, "T11-0173 – Tax Units with Zero or Negative Tax Liability, Current Law, 2004-2011" 14 Jun 2011.

POSTED BY BROOKS JACKSON ON FRIDAY, JULY 15, 2011 AT 4:38 PM
FILED UNDER ARTICLES · TAGGED WITH DEFICIT, FEDERAL BUDGET, SPENDING, TAXE

Franken introduces "Pay for War" Resolution: Daily Kos

To set the stage, remember this, the killer graphic from the Center on Budget and Policy Priorities on the budget and deficits.

The Bush tax cuts, which should have expired in January and which the GOP budget would make permanent, and the Bush wars. That's what is driving the deficit that the GOP says it cares about (though we know better). The very fact that jobs, the Bush tax cuts, and the wars aren't the focus of the deficit discussion suggests that for most politicians and pundits, Dem and GOP alike, this is just politics. But not all.

For example, Sen. Al Franken, who introduced the Pay for War Resolution in the Senate yesterday.

The Pay for War Resolution gives Congress the option to finance war through budget cuts, creating new revenue or a combination of both budgetary means. Franken said the bill is meant to avoid a repeat of the $1.25 trillion that the wars in Iraq and Afghanistan have added to the national debt.

“We have to ensure that Iraq and Afghanistan remain anomalies in American history,” Franken said on the Senate floor Wednesday. “And that’s what my resolution seeks to do. It will ensure that future wars don’t make our deficit and debt problem worse. It will ensure that Congress and American citizens must face the financial sacrifice of going to war. And it will force us to decide whether a war is worth that sacrifice.”

“In the last ten years our wars have been paid for by borrowing,” Franken said. “The Iraq War was accompanied by a massive tax cut. That failed fiscal experiment created the impression that war requires no financial sacrifice. We know that is just not true. The question is who will bear the financial sacrifice, the generation that has decided to go to war or its children and grandchildren?”

In a press release Franken noted broad support for the idea from across an ideological spectrum, but with the most salient comment from Dean Baker, Co-Director, Center for Economic and Policy Research: “If we think that a situation requires the men and women in our military to risk their own lives, then the rest of us should at least be willing to pay for the cost of this adventure with our tax dollars.”

The most serious policy-maker in Washington D.C. today is former comedian. Go figure.

Link:  Many good comments !  http://www.dailykos.com/story/2011/04/07/964474/-Franken-introduces-Pay-for-War-resolution