America now owes over $14 trillion to our creditors. This is simply unsustainable.
Last year I served on President Obama’s Fiscal Commission, which was charged with creating a long term plan to reduce our debt. When the final recommendations were put to a vote, I voted Yes.
It was not an easy decision, and I knew then that my vote will be widely criticized by some, but I believed then that it was the right thing to do. I still do.
The Bowles-Simpson fiscal commission plan is not perfect, and it is certainly not the plan I would have written myself. But it would help put Americans back to work and it would reduce our federal debt dramatically. If we don’t act now – if we pass this issue on to another Congress, another generation - the tough choices we face now only get tougher.
There are only two honest ways to reduce our debt: cut spending or raise revenues. This plan would do both and it takes the spending cuts from the entire budget – defense and non-defense. We would put the cost of wars and natural disasters on the budget. We would increase the gas tax to create a transportation fund to honestly pay for roads, bridges and mass transit.
And we wouldn’t spare Members of Congress or federal employees. Budgets would be cut; pay would be frozen; and the federal workforce would be reduced by over 200,000 jobs in the next 10 years.
On the revenue side, I insisted that the Commission look at our tax code where each year we spend over $1.1 trillion on deductions, credits, exclusions and tax earmarks. To put it in perspective, those tax expenditures exceed the amount we spend each year on domestic discretionary spending and exceed the total amount we take in federal personal income taxes.
The Commission would dramatically reduce these tax earmarks and use these funds to reduce our debt and to lower our personal income tax rates. We would restructure critical deductions for health insurance, mortgage interest, charitable giving and retirement credits to make the tax code fairer and provide valuable tax relief for middle income and working families.
Current income tax rates of 15%, 28% and 35% would be reduced to 12%, 22% and 29%. Middle income Americans would enjoy a much deserved tax cut.
On Medicare, the Commission would protect this valuable program that more than 40 million Americans count on and reaffirm the cost savings realized by the health care reform law.
Social Security is the most important social program in America. The Commission would create an actuarially sound program for an additional 75 years. It would increase the minimum benefit for the lowest income Social Security recipients and add a much needed increase in benefits for those over the age of 85. It would raise the retirement age one year to 68, 40 years from now, meaning no one over the age of 28 today would be affected and the retirement age would be 69, 65 years from now. To protect those in manual labor jobs who cannot wait to retire, we would create special benefit packages which would still allow for early retirement.
Another provision that I worked for would make certain that the spending cuts do not start until 2013. We cannot run the risk of hitting the brakes in the midst of this recession, driving more people into unemployment and shredding the safety net to protect our families.
I also insisted on two things to spark the economy: a payroll tax holiday that could create up to 900,000 jobs and a longer-term investment of $100 billion in infrastructure, education and R&D - key investments for long-term economic growth.
The question my closest political friends asked is this: why would a progressive like Dick Durbin vote for this Deficit Commission report?
First, all politicians, left or right, Democrat or Republican, have to acknowledge the deficit crisis our nation faces. Borrowing $.40 out of every dollar we spend for missiles or food stamps is unsustainable. And being indebted for generations to China and OPEC does not make American a stronger nation.
When we engage in the critical decisions about our nation’s future budgets, I want progressive voices at the table to argue that we must protect the most vulnerable in our society and demand fairness in budget cuts.
My friends, mentors and former Illinois Senators Paul Simon and Paul Douglas have famously said: “To be a liberal doesn’t mean you’re a wastrel. We must, in fact, be thrifty if we are to be really humane.”
It’s time for all of us to come together to make hard choices. I am ready to do my part.