Meeting w/Elected Officials on the U.S. Fiscal Cliff - Our Ideas & Your Opinion

Starting tomorrow, DFNYC leadership has meetings scheduled with the offices of federal elected officials to discuss the U.S. Fiscal Cliff.  We want to see progressive, fiscally responsible solutions, and many of you have shared your ideas with us at events and by email.  This is our draft agenda, and we want to hear from you, whether you agree, disagree, or have additional points or context.  Please email us at info-at-dfnyc.org (replace -at w/@). 

Revenue Side:

1.  Bush Tax Cuts: 

Raise the marginal income tax rate on income over $250K. This essentially means letting the Bush tax cuts expire, but only on income over $250K.

2.  Tax High Frequency Trading: 

A small financial transaction tax that would discourage high frequency trading, while also raising significant revenue from it. The tax could be just a small fraction of a penny per share so that it would not in any way discourage other investors from the stock market, only the computerized algorithmic high volume trading that has led to flash crashes. For more, click here to visit the HFT Tax page at our website. 

3.  Deductions: 

Generally, we feel that eliminating deductions is not a good approach.  It is politically unfeasible, will not raise as much revenue as simply raising the marginal rate, and non-profit organizations will suffer greatly.  However, there may be a few deductions that should be reformed. 

4.  Capital Gains: 

Capital gains is already going up in 2013. We plan to ask the elected officials if there are plans to raise it further.  On the one hand, it seems fair as it is a tax on wealth, not work. On the other hand, there is compelling history that raising it may discourage investment, which is needed to get our economy on track.  Thoughts?

5. Expiration of the Payroll Tax Cut:

Many DFNYC members and others in the progressive community are in favor of the idea of allowing the payroll tax cut for employees - enacted by President Obama for 2011 and continued through 2012 - to expire. Though we realize this tax cut has been most beneficial to the middle class and working poor, we also recognize that this tax is for the benefit of Social Security, and we want Social Security to be solvent.

Spending Cuts Side:

1. No cuts to Medicare, Medicaid, or Social Security:

Social Security and Medicaid are exempted from the Fiscal Cliff, so there less of a reason to negotiate here.  As for Medicare, it is a huge benefit to seniors, a fiscally responsible health care plan (as opposed to private insurance) and there is no significant cost savings from proposed cuts.  Howard Dean sent an email about this recently to Democracy for America members. (In case you're new here:  Our organization, DFNYC is a local coalition group of DFA.)

2.  Military Spending: 

We plan to ask the elected officials what is being negotiated with regard to spending cuts in the defense budget.  This is especially relevant in light of the war in Afghanistan, not starting a war with Iran, and the ballooning cost of the “War on Terror” domestically, as revealed in a two year investigation by the Washington Post: Click here for the 2010 article A Hidden World Growing Beyond Control. 

3.  The Affordable Care Act: 

While Obamacare is mainly market-driven legislation that puts more responsibilities on insurance companies and employers than on the government, there are certain important government expenditures in it, and those should be protected.  The high risk pool for people with pre-existing conditions, a temporary measure until insurance companies are required to not discriminate on this basis, is a program that is saving and improving the lives of many Americans. For example, the ACA has been a huge benefit to people living with HIV/AIDS (Click here for details.) 

4. Unemployment Insurance:

No cuts to unemployment insurance. If we go over the Fiscal Cliff, an estimated two million people will stop receiving unemployment insurance, a necessary source of income while jobs are still scarce.

Cuts & Revenue:

Chained CPI:  This is one idea that has been proposed to both raise revenue and decrease spending. Chained CPI is a way of determining the gradual social security payment increases and tax bracket increases that would be an alternative to the current method of calculation, which involves various inflation figures.  You can read more at the links below and share your opinion with us.  Essentially, proponents of Chained CPI state that it is a more accurate way to determine actual cost of living increases.  Opponents state that Chained CPI will decrease payments to social security recipients over time, and is not an accurate reflection of the real expenses of seniors, such as food and healthcare.    

Atlantic Monthly: Article in favor of Chained CPI.

AFL CIO Blog: Article against Chained CPI.