Austerity In The US

We use the word "austerity" a great deal. Not everyone may know what we're talking about.

Here are links to two current articles running it all down for you.

EVEN LIBERAL apologists for the Obama administration had trouble swallowing this one.

When word came that President Barack Obama made a deal with Republican House Speaker John Boehner to cut $38 billion in federal spending for the 2011 fiscal year that ends September 30, Washington Post commentator E.J. Dionne told NPR, "Maybe the president is going to run for re-election on the slogan 'Capitulation we can believe in.'"

Obama's surrender on the $38 billion sanctioned the single biggest one-year budget cut in U.S. history. But House Republicans already want to leave that record in dust--they're demanding action on House Budget Committee Chair Paul Ryan's slash-and-burn, 10-year plan to cut $5.8 trillion from the federal budget. Under Ryan's plan, Medicare would be privatized, and Medicaid would be converted into a block grant program for the states--even as taxes for the wealthy and businesses are reduced.

Anyone who expects Obama to push back against Ryan should take a look at the deal the president made on the near-term cuts. By agreeing to the $38 billion reduction, Obama gave Boehner more than he originally asked for at the beginning of the year. Boehner and Republican leaders originally proposed a reduction of $33 billion in current fiscal year spending, but the Tea Party caucus in the House demanded that the speaker up the ante, and the House passed a resolution calling for $61 billion in cuts.

Obama, of course, didn't admit that the cuts are harsh--on the contrary, he trumpeted the deal with Boehner as a success: "This is an agreement to invest in our country's future while making the largest annual spending cut in our history."

Read more here.

And:

"The President's statement today was a welcome step in breaking the silence about revenue in the current budget and deficit debate," said Chuck Collins, co-author of a new report, Unnecessary Austerity. "Before we face another round of budget cuts that undermine the American Dream, U.S. millionaires and corporations like General Electric should pay their fair share."

"Unnecessary Austerity," a new Institute for Policy Studies report examines how Congress could raise more than $4 trillion in revenue over the next decade by reversing years of tax giveaways to the richest Americans and largest corporations.

"When President Obama was born in 1961, families with more than a million dollars of annual income paid 48% of their income in federal income taxes," said Scott Klinger, report co-author. "This year, they will pay just 23%. We need the president to stand tall."

The report examines massive shifts in the tax code since 1961. For example, if corporations and households amassing $1 million or more in income each year paid taxes at the same rates as they did in 1961, the Treasury would collect an additional $716 billion a year - $7 trillion over a decade.

Read more here.