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The Progressive Caucus’ Stealth Budget

The Congressional Progressive Caucus (CPC) released its budget last week. As usual it was almost completely ignored by the major media outlets. As a result we know very little about the ideas in the budget, but we know a lot about the media.

First, it’s worth saying a bit about the ideas. Most importantly the progressive caucus budget is designed to get us back to full employment. It calls for a major infrastructure program to modernize and improve our infrastructure. It would also provide funding to state and local governments to reverse many of the cutbacks in education, health care and other areas over the last few years. In past recoveries state and local hiring has helped to boost the recovery. In this recovery cutbacks slowed growth.

This spending will lead to larger deficits in the first two years of the budget window, but it also would lead to more growth and jobs. The simple fact that just about everyone in the debate concedes is that in the near-term if we want more jobs we will need larger budget deficits. And we know we have no problem borrowing the money because interest rates are extremely low.

The decision to run smaller deficits is a decision to slow growth and throw people out of work. Additional private sector is not replacing the cuts in government spending. This means the folks who boast about getting the deficit down are boasting about slowing growth and making people unemployed. That passes for good work in Washington.

Over a longer term the CPC budget actually leads to lower debt levels than the baseline budget. It includes a number of tax increases aimed at the wealthy and also focused at reducing harmful activities. In the latter category, the CPC budget calls for placing a modest sales tax on financial transactions like sales of stocks, bonds, and derivatives.

The Joint Tax Committee projected that a tax of just 0.03 percent could raise $40 billion a year. A tax on financial speculation would be invisible to almost anyone except industrial strength speculators. This is a great way to raise money while reducing a wasteful and counterproductive activity.

The other waste tax in the CPC budget is a tax on carbon emissions. The problem of global warming is not going away just because the politicians in Washington opt to ignore it. The current path threatens our children and grandchildren with a wrecked planet, but the Very Serious People in Washington would rather save them from the risk of a two percentage point hike in the Social Security tax somewhere in the next fifty years.

This gets to the second point, that the CPC budget was almost completely ignored in the media. The reporters and editors and the major news outlets undoubtedly justify ignoring the budget by the fact that it has no prayer of being passed into law. While this is true, there have been numerous budgets and budget items from the right that have no chance of being passed into law that have gotten considerable attention from the media.

Did anyone think that Congress was about to approve Representative Ryan’s proposal for replacing Medicare with a voucher system? The fact that this proposal had no prospect of being passed into law in the immediate future, did not prevent it and any number of other right-wing proposals from getting extensive and respectful coverage from the media. There can be little doubt that there is a double standard here.

And the double standard has very real consequences. By ignoring progressive proposals, the media prevents them from becoming part of the public debate. As a result it is difficult to advance ideas like a tax on financial speculation even though there is good reason to believe that the public might embrace such a proposal for some of the same reasons that so many economists have supported the idea.

The lack of attention to progressive proposals has an impact on the willingness of political figures to support them. It helps a member of Congress enormously when she has one of her proposals highlighted in major news outlets. This is the sort of thing that they trumpet to their constituents, to potential campaign contributors and to their peers in Congress. Members who can count on a receptive audience in the national media are courted by other members who are trying to push their own proposals.

The blackout on covering progressive proposals is effectively telling ambitious politicians that if they want to get ahead they better move to the right. They will be ignored as long as they push ideas perceived as being on the left, regardless of the merits of the ideas.

In short, the media are putting a very big thumb on the scale when they decide to ignore the CPC budget and other proposals coming from the left side of the political spectrum. This is not neutral reporting.

Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. 

This article originally ran on the Guardian.

 

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Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University.

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