Now that the elections are over, our national policymakers have turned their attention to the so-called “fiscal cliff.” Of course, it’s really more of a crest than a cliff, and the problem was created by Congress in the first place.
Here are four easy steps that Congress and President Obama should take that will restore opportunity and economic security for working people and their families, rebuild the American economy, and thereby significantly reduce the deficit.
Step 1 – End most Bush era tax cuts
The American economy boomed under the tax rates of the 1990s. Let’s restore those rates, and keep some of the tax breaks that provide opportunity for low and moderate income families, such as the expanded child, college, and energy saving credits and deductions.
Step 2 – Institute middle class recovery
Give block grants to states – big ones – which can be used to create jobs, educational opportunity, and working family support, for example:
- Hiring teachers and school support workers; restoring art, music, and physical education as well as enhancing academic performance;
- Expanding early learning (isn’t it high time to fully fund Head Start?) and enhancing childcare quality;
- Providing start-up and outreach costs for state paid family and medical leave insurance programs;
- Building infrastructure and energy efficient retrofits.
Step 3 – Improve our Social Security system
It’s already a great program which has helped build the middle class and virtually eliminate elder poverty. Far from contributing to the deficit, it has run a surplus for decades. We can guarantee it for young Americans and improve benefits for those on the financial edge now by:
- Scrapping the cap (people don’t pay into the system on earnings over $110,100);
- Increasing benefits for low earners and elderly survivors;
- Restoring college benefits for the children of deceased workers (which we eliminated in the 1980s); and
- Reducing the years used to calculate retirement benefits from 35 to 30 (it would be better for women who often take time out of the workforce to care for children and elderly parents, as well as for young adults who haven’t been able to find work during the recession).
Step 4 – Reduce long run cost growth in health care
Rein in medical costs, including allowing Medicare and Medicaid to negotiate drug prices, tamping down on fee for service profiteering by the medical establishment, and emphasizing primary and preventive care.
These four steps would be a good start to restore opportunity and economic security for working people and families.