It’s the “yellow-bellied deficit vulture,” recently spotted circling the Capitol building and heard squawking on syndicated talk shows. You can identify the vulture by its distinct screech it uses to selectively attack spending choices like unemployment benefits for hard-pressed workers. The vulture flaps furiously about President Barack Obama’s spending in response to the worst economic meltdown in 60 years. But it is close-beaked about the previous decade, when both parties in Congress and President George W. Bush borrowed trillions of dollars to fight two wars and give tax cuts to corporations and the super-wealthy. He’s also eerily silent about the $1 trillion over 10 years in military spending waste, identified by the Sustainable Defense Task Force watchdog panel.
That’s because the yellow-bellied deficit vulture has powerful interests to defend and is determined to keep some things “off the table.” Fortunately, this vulture is conspicuous with its bright tail-feathers of excessive political partisanship.
To be clear, the vulture is distinct from the vigilant “deficit hawk,” which, like most Americans, is concerned about the national deficit and its impact on our economy and future generations. It can recognize the urgent need to assess the causes of the deficit and make thoughtful choices going forward. A mature hawk knows that budget politics are complicated and that borrowing is the path of least resistance for both major political parties. It understands the pressure that politicians face from powerful constituents that want both tax cuts and preferential spending.
That’s why a mature deficit hawk would reconsider the prudence of the 2001 and 2003 tax cuts for households with incomes over $250,000, which are due to expire at the end of this year. Retaining the tax cut would add $826 billion to the national debt over the next decade.
But the deficit vulture takes flight when faced with the possibility of reversing reckless tax cuts for multi-national corporations and the very wealthy. Instead, it appears bold about cutting retirement benefits for future generations.
Seasoned hawks also demonstrate support for two proposals that would generate over $200 billion per year and strengthen the U.S. economy: closing overseas tax havens and instituting a financial speculation tax. This is wisdom we should follow.
U.S. multinational banks and corporations use overseas tax havens to reduce or avoid taxes, adding billions to the deficit and creating phony subsidiaries in places like the Grand Cayman Islands. They compete unfairly against responsible domestic businesses that pay taxes. Such tax-dodging costs responsible American taxpayers an estimated $43 billion to $123 billion a year.
A financial speculation tax is a modest levy on financial transactions, such as the purchase and sale of stocks, bonds, derivatives, and swaps. One proposal would collect a penny on every four dollars of financial transactions, generating an estimated $177 billion a year. Hawks in England and Taiwan have secured such taxes on securities that encourage productive investment and discourage the kind of reckless trading that crashed our economy.
Here in America, the yellow-bellied deficit vulture is doing all it can to make sure we don’t consider these proposals. It nests with corporations, squawking for tax breaks, bailouts, and military contracts that have little to do with national security. We can’t allow this bird to distract us from the serious national discussion we need to have.