Want to prevent a fiscal crisis? Ignore the unions


This week, the President is expected to (finally) send his budget proposal to Congress. As Tea Party Patriots pointed out last week, the budget is mostly a Dead-On-Arrival (DOA) document that includes tax increases, spending increases, and scant cuts or reforms to federal spending.

According to some of the nation’s most powerful unions, however, these minor changes to certain programs are infuriating:

Obama’s draft budget is expected to include a new way of calculating inflation increases that would result in slower cost of living benefit increases for Americans receiving government benefits.

The change — called “chained CPI” — has labor, liberal activists and advocates for older Americans fuming.

“It is unconscionable to ask seniors, people with disabilities and veterans who are barely making it to be squeezed even tighter at a time when corporations and the wealthiest 2% are not paying their fair share of taxes, despite soaring profits,” Silvers writes. “It’s bad policy to make cuts that will weaken our economic recovery.”

“The majority of Americans oppose cuts to our country’s most important family protection programs. It’s time to make some noise about it,” Silvers writes. “We need to invest in America’s working families, not pull the rug out from under them.”

Their alternative solution? Taxing the rich:

Instead of benefit cuts, the AFL-CIO proposes a repeal of the sequester and raising taxes on millionaires and corporations.

There are many things wrong with this approach to the budget. Here are a few to run by your union-friendly friends and family members:

First, to ignore the need to reform Social Security is to allow the program to go bankrupt within two decades, though probably sooner than that. Furthermore, the longer we wait to make changes, the more drastic the changes will have to be.

Second, what is considered the “fair share” of taxes? The top 1% of earners currently pay 29% of their income to taxes, compared to 1% of income for the bottom 20% of earners – a discrepancy highlighted by the fact that the 1% make 50 times as much as the bottom 20% of earners, but pay 1,500 times as much in taxes. Additionally, it is easily arguable that wealthy Americans are already paying more than their “fair share,”  since the top 5% of earners pay the majority of individual incomes taxes (which go towards federal programs like national defense, border control, education, food stamps, and transportation). Thus, they are compensating for a near-majority of Americans who benefit from these programs but pay scant taxes towards them.

Third, by arguing against reforming Social Security – and, by proxy, Medicare – the aforementioned unions are all but saying it’s okay for America to hit a fiscal crisis. Social Security, Medicare, and interest payments already total nearly 50% of the federal budget, and this is expected to grow significantly over the next decade and for decades thereafter. Reforms must be implemented now, not when it’s politically convenient or after it’s too late.

Finally, it is a canard to talk about senior citizens being “squeezed” in the way described above. While some seniors are poor, most are not, especially when compared to younger Americans. What the AFL-CIO and its allies are advocating for is putting more of the tax burden on a relatively diminishing number of working Americans even as the number of retired Americans continues to dramatically increase.

Once again, big labor proves it would rather cut off America’s nose to spite its face. And yet big labor holds an entire party under its sway.