NETWORK strongly believes the federal budget is a moral statement of the priorities of our nation. We analyze budget proposals according to social justice teachings of our faith and call on elected leaders to write and approve budgets that serve all segments of society, particularly those struggling to overcome poverty, with an eye to future generations. The federal budget should aim to build a strong domestic economy and thriving communities for the 100%.

At a time of historic levels of inequality, when a small percentage of families in the U.S. have done incredibly well while so many have struggled with flat wages and are barely getting by, it is imperative that economic policies be enacted to reverse this dangerous and destabilizing trend.

To that end, we applaud the Obama administration’s budget proposal as a valuable first step toward meeting our nation’s obligation to invest in working families while asking those who have benefited most from our economy – often through low taxes on capital gains and tax loopholes – to pay their fair share. The budget is fiscally responsible because it funds important programs that support families and individuals working to become part of the U.S. middle class.

Our economy is strengthened when workers receive wages sufficient to support their families. They need well-paying jobs along with education and training for those jobs.

A well-trained workforce begins in childhood and continues through appropriate preparation for the changing workplace. President Obama’s budget includes increased investment in early childhood education, supports for K-12 students with special needs, and well-trained teachers, particularly in subjects such as science, math and technology. It will also expand Head Start and Early Head Start to more children and for longer duration.

The budget will encourage workers to upgrade their skills as work environments change, offer two years of community college at no cost to responsible students, enact tax reforms to make additional college more affordable, and ensure that Pell Grants keep pace with inflation. Further, it will double registered apprenticeships and fund training in best business practices for entrepreneurs. With these policies, our nation invests in its most valuable resource – people.

In order for parents to hold jobs, they need access to work supports such as safe and affordable child care and the security of paid leave when they or family members are sick. The president’s budget increases availability of child care and provides a tax credit for low- and middle-income families paying for child or dependent care. Middle-class tax credits encouraging work include a “second earner” tax credit, a permanent improved Child Tax Credit, and an expanded Earned Income Tax Credit that helps non-custodial parents and individuals without children. Additionally, State Paid Leave Initiatives are further encouraged through funding for initial set-up to some states.

Expanding the National Network of Manufacturing Institutes, launching the American Made Scale-Up Fund (a public-private investment fund for start-ups), establishing an independent National Infrastructure Bank, and issuing more timely decisions on infrastructure permits will increase the availability of well-paying jobs in the United States. The 2016 budget proposal also provides a 6% increase in research and development investment, particularly in health-related areas. Investment in the Infrastructure Bank will provide well-paying jobs while repairing roads, bridges and public buildings that have languished for over 30 years. Those who make the greatest use of, and profit from, our infrastructure would be asked to take greater responsibility for its upkeep.

Workers and non-workers alike can only be secure when they have an assurance of available and affordable healthcare. The 2016 budget request strengthens the impact of the Affordable Care Act and Medicaid expansion.

Children are insecure when they are not in stable housing and school settings. Teachers in low-income schools report that up to 90% of students move and/or change schools within the year. At the end of the year, many of these students have lost rather than gained skills. The president’s budget request improves coordination of resources that enhance community stability and growth by supplementing HUD and Department of Education funding for additional “Promise Zones.”

Some security is also provided by law-enforcement and the military. The president’s budget will increase Homeland Security and Pentagon funding, commensurate with non-defense economic security. The Pentagon base budget would be increased, while the less monitored Overseas Contingency Operations (OCO) fund will be reduced to covering truly extraordinary costs of overseas engagement.

The president’s budget will increase both non-defense and defense spending, but in deliberate and measured ways. It would eliminate the mindless approach called Sequestration – across-the-board cuts that pay no attention to damage caused by cutting individual programs. The House and Senate, on both sides of the aisle, agree that Sequestration is no way to make responsible budgetary decisions about how to enact reasonable cuts and raise sufficient revenue to meet the needs of the 100%.

Overall, we continue to be concerned about the increased Pentagon spending, preferring additional funding for human needs, both foreign and domestic. We know that real security comes when neighbors have their needs met and families have hope for a future. More Pentagon spending is not an effective way forward for our nation and our world.

Sequestration budget cuts have significantly harmed a large numbers of families. Between 2013 and 2015, 57,000 children were unable to be enrolled in Head Start, 100,000 fewer low-income households received rental housing vouchers, and hundreds of thousands of meals were not distributed by Meals-on-Wheels.

Between 2010 and 2015, 136 human-needs programs received cuts. Of these, 51 were cut by at least 15% and 40 by at least one-third. The estimated loss across all human-needs programs from 2010 through 2015 is 16%. These include programs for the elderly and children, education, youth services, home energy assistance, housing, public health, and job training. The budget proposed by the president will go far, but not far enough, in reversing the most critical cuts of the past five years. The damage will increase dramatically if Sequestration is the choice of Congress for 2016.

In reviewing tax proposals, NETWORK applauds the administration’s effort to fund increased investment through reasonable, fair tax increases for wealthy individuals and for corporations that avoid taxation through tax havens overseas. Loopholes supporting tax avoidance by wealthy corporations and individuals are unjust and drain the government of productive revenue. Revenues raised through our tax system should be enough to pay for the public needs of society and set us on a sustainable path to economic growth and stability. These proposals require corporations and wealthy individuals to pay their fair share of taxes.

The administration has chosen to limit tax expenditures to those that promote the common good and create a more equitable, secure society by expanding tax credits. Proposals to help working families, like a permanent and expanded Earned Income Tax Credit (EITC) and a permanent, refundable Child Tax Credit, are crucially important and benefit 16 million families, including 29 million children each year. These proposals have longstanding bipartisan support and strengthen our society from the ground up.

Sister Simone Campbell, NETWORK’s executive director, has called on our elected leaders to make responsible budget decisions that benefit everyone, not just those who are rich and powerful: “Congress should reject partisan sound bites and get to work for our entire nation. We need to raise reasonable revenue for responsible programs that benefit the 100%. The president’s budget is an important step toward creating an economy of inclusion.”

Wednesday evening, the House of Representatives narrowly passed a budget. The version that ultimately passed by a vote of 228 to 199, had been dubbed “Price 2” after House Budget Committee Chairman Tom Price (R-GA). Seventeen Republicans opposed it along with all Democrats. No bipartisanship there.

In order to achieve passage, Boehner and his top team were forced to use a complicated maneuver called “Queen-of-the-Hill,” but they were successful, unlike nearly all previous attempts this year to gain agreement in the unruly Republican-dominated House. Under “Queen-of-the-Hill,” the House voted on six different budgets and the one with the most votes was declared the winner. “Price 1” had been passed by the House Budget Committee last week; “Price 2” was identical in all respects to “Price 1” except that it increased defense spending by $2 billion. Both versions of the budget were considered the work of Tom Price, although “Price 2” had the blessing of the House leadership.

A third Republican budget, that of the House Republican Study Committee, produced greater deficit reduction than the Price budgets, largely achieved through very deep spending cuts. All three Republican budgets would repeal the Affordable Care Act and produce hundreds of billions in domestic cuts similar to “Price 2.” The winning budget proposal would privatize Medicare for future seniors, turn Medicaid into block grants to the states, and slash other domestic programs that assist the poor and vulnerable people in our society, such as SNAP (formerly known as food stamps), special education, Pell Grants, job training, nutrition, elderly services and housing assistance – and increase military spending.

Price explained that his plan will lead to gradually smaller deficits and is designed to let the states determine social service levels. The latter purpose has been a common refrain in the party for many years, even though from many other programs we know that such logic leads to greater inequity among the states.

All told, this conservative budget would cut spending by $5.5 billion and eliminate the deficits over the next decade, which the deficit hawks in the party have made their clarion call. The budget resolution also includes “reconciliation” language that orders House committees to draft legislation repealing the Affordable Care Act. The real issue here is that a reconciliation repeal bill cannot be filibustered in the Senate and needs only a majority vote to pass. However, whether the Senate, in conference, would agree to this point is an unknown.

Many Republican lawmakers, according to Politico, just want a reconciliation process with the Senate, so that together they could send an Affordable Care Act (ACA) repeal bill to President Obama.

Three Democratic House budget proposals were also considered on Wednesday – those of the House Democratic leadership, the Congressional Progressive Caucus and the Congressional Black Caucus. These three plans all focused on improving growth, investing more funding in domestic programs, which have been starved for funds due especially to sequestration over the past few years, and raising taxes largely by closing current loopholes in tax law. None of these blueprints garnered votes outside the Democratic Party.

Floor Debate on the Budget in the House

During the House floor debate, Republicans vowed to shrink the government’s reach, balance the budget and start paying down the federal deficit – all without raising taxes – positions we are all familiar with. They scarcely mentioned how the severity of their cuts and the policy changes they are proposing would affect poor and even middle-class families. Instead, much of the discussion on the Republican side revealed the split between the defense hawks and the deficit hawks. There was nothing bipartisan about the floor debate

The New York Times clarified on March 26 how discomfited the Democrats were with the tenor of the debate. Speaking for many of his fellow Democrats, Rep. Steny Hoyer (MD), the House’s No. 2 Democrat, accused Republicans of “mercilessly gutting priority investments in education, job training, innovation, research and other priorities of this nation…This budget is a severe disinvestment in America’s future.”

The fact that House defense hawks inserted extra military spending into the Overseas Contingency Fund (OCO), which is reserved for emergencies overseas, ensures that the Defense Department may have more than it wanted in war funding and less than it needs for basic operations. President Obama’s FY 2016 budget, with a defense component nearly as large as that of the Republican budget, ignored the strict caps on military spending set by the Budget Control Act of 2011 and added funding to the basic Pentagon budget. Adding funding through the OCO allows the GOP to avoid violating spending caps, although this did not convince the deficit hawks that the deficit was uppermost in the minds of the defense hawks.

Expectations in the Senate Budget

As I am writing this blog, the Senate is debating its own version of the budget, which may continue well into Friday, March 27, a process that has been called a “Vote-A-Rama.” Under this procedure, scores of amendments will be voted on consecutively with merely a two-minute explanation of the content. So far the Senate has voted on several amendments, and none has altered the basic budget written by Senate Budget Committee Chairman Mike Enzi (WY). This document is broadly similar to that of the House-passed budget. Many of the unlimited number of amendments that are part of “Vote-A-Rama” are not even budget-related but are politically-oriented and intended to be used aggressively for Senate campaigns.

Politico also reports that the Senate began voting on aspects of the budget on March 24 when they defeated a Democratic proposal on infrastructure improvements over the next six years to be paid by closing corporate loopholes. That same day, Republicans forced a purely political vote on President Obama’s FY 2016 budget that was defeated overwhelmingly, with most Democrats joining in, 1-98. Democrats had previously expressed their preferences for competing bills, e.g., those of the Congressional Progressive Caucus or the Congressional Black Caucus. Of course, this vote was simply symbolic.

A Few Caveats

It is important to note that budget resolutions are non-binding blueprints that neither carry the force of law nor are officially submitted to the executive for approval or veto. They merely set overall spending levels for the coming fiscal year. However, as we see in the Republican Budget that just passed, they often generate binding legislation by including reconciliation instructions. In addition, if the Senate and House are able to reconcile similar yet competing versions of their blueprints, then having a final budget can ease passage of future legislation.

The Associated Press in U.S. News online quotes White House press secretary Josh Earnest as saying that President Obama will reject any budget that locks in deep spending cuts or increases funding for national security without providing matching increases in “economic security” funding. The president has also vowed to defend the healthcare law that is his signature domestic achievement. The House has already voted over 60 times to repeal it in whole or in part. However, now (since November 2014) they have a Senate partner who will back them up.

Problems in the House Republican Budget (FY 2016)

There is much in the FY 2016 Republican budget blueprint to challenge. Responding to the needs of people who have been marginalized and lifting families out of poverty are twin concerns that are nonexistent in the document. Where are the special protections for the most vulnerable Americans?

The overall revenue and expenditure levels do not ensure that 100% within the U.S. can live in dignity; surely not after severe cuts in Medicaid, job training, nutrition, SNAP and the many current domestic programs that will either cease to exist or be gutted to only a semblance of their former selves.

The 100% are not paying their fair share of taxes. The very wealthy are too often excused from the requirement to promote the common good. Moreover, there is no attempt in this budget to create a more equitable and secure society by expanding tax credits to low-income taxpayers. The distribution of resources in this budget does not enable people to help themselves or others. In fact, it is hard to avoid seeing a sinful social structure being erected in the place of a sense of social responsibility. Where are the human rights of the most vulnerable among us enshrined?

The drastic cuts proposed for the Children’s Health Insurance Program (CHIP) and Medicaid do not meet the affordability and accessibility criteria that have been used by anyone remotely interested in the healthcare field, let alone the most vulnerable among us. And repeal of the Affordable Care Act (ACA) without any alternative being proposed defies concern for the 16.4 million Americans who are currently receiving healthcare benefits through the ACA.

No wonder that Catholic advocates like NETWORK, Catholic Charities USA, Catholic Relief Services, the U.S. Conference of Catholic Bishops (USCCB), and the National Advocacy Center of the Sisters of the Good Shepherd, along with the Coalition of Human Needs and many others, are pressing Congress to focus more on vulnerable people as they develop their budget plans.

The March 23 issue of Catholic Courier online reminds us of the USCCB letter of Feb. 27 to each member of Congress in which they reiterated that a budget is a moral document and that the needs of poor people are significant. Other individual bishops have written that a budget requires the shared sacrifice of all; that adequate revenues must be raised and unnecessary spending on the military should be eliminated. Most importantly, Congress must address the long-term costs of health insurance and retirement programs fairly.

Sister Richelle Friedman, director of public policy at the Coalition on Human Needs, and Sister Marge Clark, a NETWORK lobbyist, said the needs of poor and vulnerable people were being pushed aside in the budget plans. Sister Richelle called the House budget “morally bankrupt…[R]ather than strengthening America for all who are currently being left behind, if elements of the budget were to become law it would be devastating to those vulnerable people.”

As the appropriations process advances this spring and summer, we must continue to urge Congress to enact or enhance programs that truly lift people out of poverty. And their dignity and human rights should be emphasized in meaningful ways.

Unfortunately, both the Senate and the House have proposed budgets for Fiscal Year 2016 that would drastically cut critical programs that have successfully helped people survive and move out of dire poverty—programs like Medicaid, food stamps (now called the Supplemental Nutrition Assistance Program or SNAP), low-income tax credits and, of course, the Affordable Care Act (ACA). In addition, painful cuts are also proposed for education, housing, child care, Head Start, home energy assistance, meals for seniors, and many others on the domestic side of the budget. There is no need to make foolish and unsustainable cuts in the area of human needs and then add funding to an already well-funded military.

Emily Badger, a blogger for The Washington Post, calls our attention to the “double standard” that makes low-income people prove that they are worthy of government benefits, while the rest of the population, who receive four times as many benefits through farm subsidies, student loans and mortgage tax breaks, to name a few, feel that they receive nothing from the government.

The states of Missouri and Kansas are each trying to impose unprecedented restrictions on major federal programs for low-income workers. In the Missouri legislature, one infamous proposal is an attempt to ban purchases of cookies, chips, energy drinks, soft drinks, seafood and steak using food stamps. Not only does this proposal demonstrate an effort to criminalize people in poverty, but it also exhibits a lack of understanding about the food stamp program and how little the SNAP program actually pays the 46.5 million Americans who receive them. The average of about $33 per week is hardly enough to feed one person for a week, let alone a family. On this meager allotment (already cut in 2013) it is nearly impossible to purchase anything fancy or non-essential. According to 2013 figures from the U.S. Department of Agriculture (USDA), the food stamp program has an extremely low fraud rate – about 1 % over the last 15 years.

Many in the Missouri legislature, who are debating this bill, seem to lack an understanding of the types of pressures low-income families feel. Their choices may be: should I pay the rent or buy my child a pair of shoes for school? Not whether I should buy steak or lobster. The Center for American Progress (CAP) is right on target when they say that increasing the incomes for families who use SNAP should lift people out of poverty; then they won’t need SNAP benefits.

We need not worry that Missouri will be able to pass their proposal because the USDA does not allow bans other than their own on what those using SNAP may buy. It is doubtful that Missouri would acquiesce in a complete dismantling of their food stamp program by attacking the USDA standards.

Kansas, on the other hand, is attempting to curtail welfare (now called TANF or Temporary Assistance for Needy Families) recipients from using their benefits at movie theaters, nail salons, pools and spas, liquor stores, jewelry stores, casinos and racing facilities, tattoo and piercing parlors, cruise ships and other locations. But the same lack of common sense prevails. Their proposal also imposes hard caps on the length of time recipients can receive benefits. Kansas, under Governor Sam Brownback, has already put in place changes that have led to more than 23,000 persons leaving the TANF program despite a steadily increasing poverty rate in the state.

Here the problem is quite different than that of the SNAP program. When federal welfare reform was enacted in the 1990s, states were given wide leeway to set up their TANF programs.

This reform means that states have considerable latitude to propose changes to TANF.

Think Progress, an offshoot of CAP, makes a couple of significant points about TANF today. The organization says that today only 26% of eligible poor families receive welfare, down from 72% in 1996. In addition, Think Progress says that the state of Maine examined the amount of abuse in TANF and found that less than 1% of all purchases with TANF funds were made at bars, sports bars or strip clubs, and there is no way to know what was bought.

One has to ask what is the point of these restrictions? It would appear that, as Emily Badger maintains in her blog, those who are poor and vulnerable are being forced to prove they’re worthy of government benefits. In other words, there is now a double standard for them that doesn’t exist for those who receive other types of government benefits.

Oregon is proposing that people on SNAP be unable to buy “junk food,” while several other states are considering drug-testing TANF recipients. With respect to Oregon’s proposal – federal reports have consistently found that people on food stamps are less likely to imbibe sugary drinks or eat salty snacks than those with higher incomes. Also, data on drug use do not demonstrate that poor people are more prolific users of drugs than those who do not receive TANF. In fact, what data do exist demonstrate that the opposite is the case. Again, one is forced to conclude that the real purpose is to make explicit the government benefits received by low-income people by showcasing a few egregious examples of waste, fraud or abuse, while the benefits enjoyed by the rest of us are kept intact.

Those with a more sinister bent of mind might conclude that the real purpose of these proposals is to make government aid for people at the economic margins as onerous as possible, a throwback to the Victorian era. Or perhaps this season is merely a dress rehearsal for worse to come in the area of human needs.

Emily Badger draws attention to the work of the Cornell political scientist Suzanne Mettler, who showed in her 2011 book, The Submerged State, how invisible government policies actually undermine democracy by making Americans hostile to the common good as well as to government benefits as a general principle, even though upper-income people receive numerous government “goodies.” Mettler called this the “submerged state.”

Medicare benefits and tuition and healthcare tax breaks that middle and high-income people receive are less visible than the federal subsidies for low-income people. One result of this reality is that it compels many Americans to be less tolerant of programs that assist low-income people. Such submerged policies obscure the role of government and exaggerate that of the private sector. They also conceal the massive advantages given to powerful interests and the most affluent Americans. All of this tends to exacerbate inequality. As Ms. Badger says, “We begrudge them their housing vouchers, for instance, even though government spends about four times as much subsidizing housing for upper-income homeowners.”

This blog was called “Everyone paying a fair share of taxes should yield a budget that supports the common good,” indicating that, as we approach federal income tax day on April 15, we all should be gratified to pay our taxes since the government requires reasonable revenue to support its needs. One of government’s vital concerns that is easy for some to overlook is to promote the common good, and that means providing a more equitable and secure society for those less fortunate than middle and upper-income people.

We need a budget that focuses on the human needs of all Americans. For those living in or near poverty, we believe that government must strengthen its social safety net. We also believe that it is not helpful to draw useless distinctions among those who receive government benefits, as this blog has described, although we believe more largesse is needed for people who are poor and vulnerable and less for the middle- and upper-income groups.

NETWORK advocates for low-income working families by supporting all entitlement programs, such as SNAP, TANF, Medicare, Medicaid and CHIP (Child Health Insurance Program); discretionary programs including the WIC program (Women, Infants and Children), housing, child care for low-income workers, and greater income equality starting with raising the minimum wage to a “living wage.” We’ve already made clear in other places our position on wasteful military spending and the elimination of the Overseas Contingency Operations (OCO) funding.

These positions flow from our belief in economic equity, which requires valuing the worth and dignity of every person and ensuring that all people share the benefits of our economic activities, which is just another way of saying that we will always promote the common good. If we believe and support the latter then it follows logically that the budget we support must provide the essential needs of our communities, ensure the safe and healthy development of families and individuals, and support those who are most vulnerable due to unemployment, sickness, old age and poverty. We insist on a level playing field for all individuals, families and communities so that each may access resources allowing them to contribute their time, treasure and talent for the betterment of the common good.

The Senate Budget Proposal passed just before members left for their two-week Passover/Easter Recess. Although much of this proposal, as well as the one passed by the House, is devastating to people of low- or middle-income, there are some bright spots in amendments that were approved with votes from both parties. These are nonbinding, but there is hope they might be included in the final Joint Budget Resolution and be brought to reality through appropriations. They include items that NETWORK has been working on:

• Paid Sick Leave (passed 61-39) to improve workplace benefits and reduce healthcare costs. Would allow workers to earn paid sick time for themselves or to care for ill family members. Workers in higher paid fields expect and receive this! But, most of your food service workers are required to work when ill, take unpaid leave – or perhaps lose their jobs.
• Ending Discrimination Against Pregnant Workers (passed 100-0). Recall the current Supreme Court case involving the UPS worker who could not get a position lifting lighter packages – although someone with another illness could.
• Middle Class Tax Cuts (passed 73 – 27)  include the extension and expansion of the refundable tax credits such as the Working Families Tax Relief Act, American Opportunity Tax Credit, and the Helping Working Families Afford Child Care Act. There are other middle class tax cuts we strongly support, but were not named in this amendment: making permanent, with the 2009 improvements, the Earned Income Tax Credit and the Child Tax Credit. Hopefully, these will be taken up and passed.

As Senate conferees begin to meet with House conferees it is important that these items are kept on the table.

It is intriguing to review the messages of the Faithful Budget to our nation’s leaders in light of the House and Senate budgets for FY 2016 released last month. Recall that the “Faithful Budget” requests them to craft a federal budget that

• Fulfills our shared duty to each other in all segments of society
• Serves the common good
• Robustly funds support for poor and vulnerable people in this land of immense wealth
• Allows each person to live a life of dignity free from hunger and poverty
• Supports an economy that generates sufficient jobs at fair wages, so that everyone has the opportunity to improve his or her economic condition
• Advances fiscal responsibility while increasing support for those who are poor and vulnerable
• Focuses on job creation and economic revitalization
• Produces a tax system based on fairness
• Makes long-term investments required to help those most in need to build assets

House and Senate Budget Proposals for FY 2016 Run Counter to the Faithful Budget

Yet, as the Center on Budget and Policy Priorities (CBPP) points out in its March 23 analysis of congressional budget plans, both the House and Senate (their budgets are similar, though not identical) cut more than $3 trillion over 10 years (2016-2025) from programs that serve people of limited means – roughly 70% of the cuts to non-defense spending, even though these programs constitute less than 25% of federal program costs. The overall impact of the GOP budgets is to vastly increase economic inequality, negatively impacting those in the middle class and devastating the lives and hopes of those below or near the poverty level. The Faithful Budget’s admonition on our shared duty to each other and our responsibility for the common good has been totally ignored.

These extensive cuts run the gamut of key programs that support moderate and low-income people: healthcare, Head Start and other early interventions for children, job training, SNAP (food stamps), Pell Grants, and other mandatory (i.e. entitlement) programs that are unspecified, but may include child nutrition and Supplemental Security Income (SSI) for elderly and disabled people in poverty. In addition, more than 13 million families would see an average benefit cut of $1,073 through reductions to the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), which would expire after 2017.

The CBPP report calls the cuts in the congressional budget plans “strikingly imbalanced,” and those of us who support the Faithful Budget would give an even harsher assessment of the documents.

“Tax Minimization”

We are currently living through a period of “tax minimization,” both corporate and individual, in which, as a society, we tolerate and often desire to derive benefit from tax laws that shift payment for shared governance to those who have less ability to underwrite their costs. We then allow the wealthiest among us to share in the benefits of American society but avoid payment of their fair share. The Faithful Budget is very clear that fair taxation is a key responsibility that everyone bears in order to provide adequate revenue for maintaining the common good. This public investment ensures that equitable public policies will ensue and they, in turn, will strengthen our democracy.

Even public opinion polls indicate that our system of taxation is skewed toward the wealthy. In examining how the congressional budget proposals stack up against Americans’ priorities, the National Priorities Project in their March 19 research article note that:

• 68% of Americans think wealthy households don’t pay enough in taxes
• 91% think middle-class households pay enough or too much in taxes
• 79% think low-income households pay enough or too much in taxes
• 66% think corporations pay too little in taxes.

In addition, 64% say reducing the budget deficit is a top priority for Congress and the president. (Several of these polls are Gallup Polls).

Neither the House nor the Senate budget raises new revenue for deficit reduction or for investments in infrastructure or other examples of the common good. It would appear that deficit reduction will be paid for by average Americans rather than by corporations or the wealthy, since no corporate or individual loopholes are closed in either budget. Although both budgets call for comprehensive tax reform, each also calls for the reduction of the top corporate rate from 35% to 25% and for reduced individual income tax rates – two brackets (10% and 25%) are proposed.

The House proposal further eliminates the Alternative Minimum Tax that ensures that high earners who use multiple loopholes are paying at least some income taxes, but the Senate proposal is silent on this issue.

The Faithful Budget, on the other hand, reinstates a just tax system, including investment in the economic wellbeing of the nation, while protecting those of limited means. The Faithful Budget believes that this type of policy will best serve to reduce the long-term deficit because it is based on fairness and shared commitment.

How Does the FY 2016 Budget of the Congressional Progressive Caucus (CPC) Correspond to the Principles of the Faithful Budget?

More in line with the principles of the Faithful Budget are those of the FY 2016 budget of the Congressional Progressive Caucus (CPC). As in previous years, the CPC solicited the assistance of the Economic Policy Institute (EPI) in analyzing and scoring the CPC’s policy proposals and in determining their impact on the federal deficit over the next decade.

Unlike the House and Senate budget proposals, the CPC’s proposals clearly aim to improve the economic wellbeing of the working class by:

• Accelerating job growth, especially through infrastructure improvement and other public investments (finances $528 billion in job creation and investment measures in 2015 alone and almost three times that level in the following two years)
• Facilitating economic opportunity for all segments of the population through expanding tax credits and incentivizing employers to create new jobs
• Strengthening social insurance and the social safety net, not by reducing benefits, but by reducing costs – for example, using government purchasing power to lower healthcare costs, building on efficiency savings from the ACA, and increasing funding for education, training, employment and income security programs
• Cutting spending, first by reducing the military budget, and then slowing its growth over the next decade, and ending the Overseas Contingency Operation (OCO) funding, which has been tantamount to a slush fund
• Emphasizing fairness in the tax code by requiring the wealthy to pay somewhat higher rates, eliminating some of the most egregious corporate income tax loopholes, equalizing the treatment of capital income and labor income, and levying a financial transactions tax, among other examples
• Targeting a sustainable debt level of 66% of GDP by FY2025.

Specifically, the CPC

• Zeroes in on corporate tax evaders by preventing companies from avoiding U.S. tax through “inversions” – legally but not actually moving overseas, as well as preventing corporations from avoiding taxes on any profits held overseas. By creating a sales tax on financial transactions, the CPC proposes to raise $921 billion over 10 years
• Focuses on tax fairness for the wealthy by raising rates by 2% for those earning more than $250,000 annually; brings the tax rates on capital gains back to the level of pre-2001; and, places a cap on the value of itemized deductions that mostly benefit the wealthy
• Maintains current tax rates for those earning less than $250,000 per year; creates a new “hard work” tax credit and expands slightly eligibility for the EITC, including childless workers; and, triples the maximum child care tax credit to $3,000 per child.
• Reduces deficits of $3.4 trillion over 10 years by increasing both spending and revenues (www.nationalpriorities.org/analysis/2015/competing-visions-2015/).

This brief journey through the CPC document should clarify why it is closer to the principles of the Faithful Budget on taxation than are the GOP budget proposals.

Evaluating Other Budget Proposals against the Principles of the Faithful Budget

Finally, to assess any budget proposal relating to the federal tax code, it is helpful to ask these questions?

1. Does the budget raise sufficient revenues to meet the needs of all segments of the population?
2. Does it call for shared responsibility among all individuals and corporations?
3. Does it provide adequate income assistance and related services to workers and their families who need it?
4. Does it strengthen and/or expand help for low-income workers with children?
5. Does it provide incentives for people to pursue or maintain employment, develop their human potential, invest in their financial security, achieve self-sufficiency and increase earnings?
6. Does it promote the common good by supporting public programs that provide what markets cannot do well, including education at all levels, affordable housing, healthcare, and security for vulnerable groups such as children, immigrants, and people who are elderly and disabled?
7. Does it eliminate wasteful or inefficient tax loopholes and tax expenditures in both the individual and corporate spheres?
8. Does it promote intergenerational responsibility?
9. Does it work simply so that taxpayers can easily understand the rules and comply with them?

The time has come! Time for the Republican leadership to agree to negotiate higher spending caps, in order to meet basic needs of those who struggle to keep a roof over their head and feed themselves and family. The budget resolution has been adopted, with limits suggested for each appropriations (spending) committee. Now, members of those House and Senate committees are trying to find enough money to fund the programs about which they care the most. They are legally bound to stick to the caps established in the Budget Control Act (2011). That act mandates that if the spending cap is exceeded, there would be across-the-board cuts in (almost) all programs in the discretionary spending part of the budget.

When they tried to enforce these caps while working on the fiscal years 2014 and 2015 spending bills, they found they couldn’t do it. They had to pull appropriations bills because they could not figure out how to spread the allotted money across the absolute needs. So, they determined a way to exceed the caps and avoid sequestration by making some well-targeted cuts within most areas (avoiding the hatchet of sequestration) by bringing in enough revenue to meet the absolute needs. The bipartisan negotiation led to an agreement that has come to be known by its authors, Murray and Ryan. But, there were significant cuts in that process.

The new lower amounts became the baseline on which the following year’s funding levels were set. Each successive year brought additional cuts, even as the numbers of people relying on programs increased, and inflation was not taken into account. Some human needs programs are now functioning on less than 30% of their funding level a very few years ago.

The president, in his budget request in February, made an opening for negotiation by buoying up the discretionary spending, and bringing in additional revenue from appropriate sources. It is now time for the Republican leadership to step up and be willing to negotiate on some fair sources of revenue to offset some of the badly needed spending in areas of human needs.

One of our partners, the Coalition on Human Needs, has done a wonderful analysis of 150 human needs programs, tracking their funding levels since 2010. Some of the cuts are horrifying. To give just a few examples:

• Green Jobs Innovation Fund – cut 100% – eliminated
• Community Health Centers – cut 38.4%
• Maternal and child health – cut 13%
• Rural Health Programs – cut 28.3%
• Children’s Mental Health – cut 12.8%
• Voting Access for People with  Disabilities – cut 74.2%
• Mentoring Children of Prisoners – cut 100% – eliminated
• Low Income Energy Assistance – cut 45.8

The people of our nation cannot live in dignity, given the sorts of cuts that have been made – to be compounded by continuing to adhere to the BCA, and certainly if sequestration is imposed.

Keep in mind the corporations that multiply their profits, yet pay no income taxes. Consider those who receive tax deductions for multimillion-dollar homes.

Clearly, there is room to negotiate, to find just sources of revenue so those struggling can have a home, can have adequate nutrition, can afford child care so they can work. The list of possible trade-offs is very long. There is room to negotiate!

The House and Senate committees are working hard to complete spending bills for FY2015 before the August recess. Multiple appropriations bills are moving simultaneously, with several being critical this week.  As we know, our budget is a moral document—and the appropriations process is where the rubber hits the road. Decisions made during this process will have a huge impact on our nation’s finances and priorities. Take action and email your members of Congress today!

Here are some of the pieces NETWORK is keeping an eye on during the appropriations process:

HOUSING (in T-HUD):

• Oppose amendments that would further cut housing programs that provide people with a place to live
• Support amendments that would boost current funding levels, particularly in programs that have already been affected by  sequestration and proposed cuts
  • Restore vouchers lost under sequestration
  • Provide additional funds for homeless assistance grants, to continue the work which is having a positive impact on reduction of family homelessness
  • Eliminate proposed cuts  to  the HOME program, the only current source of acquisition of additional units of housing
  • Eliminate proposed cuts to funding for fair housing and healthy housing that provide for elimination of lead, necessary repairs, and other safety needs in assisted housing.

AGRICULTURE

• Oppose the rider, currently in the House (and expected in the Senate), that would eliminate the requirement for school meal programs to follow nutrition standards based on solid health science (such as use of whole grains, inclusion of fresh fruits and vegetables)

LABOR, HEALTH & HUMAN SERVICES AND EDUCATION

• Increase funding to account for the new and rapid increase of unaccompanied minors into the U.S. Currently, the emergency need for $2.28 billion additional to provide for these children, who require and deserve the assistance of social services to become reunited with family members, is unaccounted for in the set appropriations. Proposed solutions include either securing the $2.28 billion from outside the appropriations process, as true emergency funding; or from across all appropriations areas.
• Make no changes that would negatively affect access to healthcare for those relying on provisions of the Affordable Care Act or other government-assisted health care.

HOMELAND SECURITY

• End the detention bed quota, which arbitrarily mandates that U.S. Immigration and Customs Enforcement (ICE) detains 34,000 individuals across the country each day and costs taxpayers over $2 billion each year. For more about the Detention Bed Quota, view these resources from the Detention Watch Network .