Right now it’s at $15.9 trillion.
In the final installment of our Citizens Agenda series, we address a problem that is getting a little bigger every day: the national debt.
In the exchange that follows, the three Democrats vying to represent the 1st Congressional District discuss the problem and what solutions they’ll bring to the table if voters send them to Congress.
Incumbent U.S. Rep. Richard Neal, Middle Berkshire register of deeds Andrea F. Nuci foro Jr., and writer-activist Bill Shein will face off during Thursday’s primary election. In the absence of any Republican challengers, the winner will likely go on to represent the district.
Q: How can Democrats meaningfully address the growing national deficit while maintaining increasingly expensive social service programs?
Neal: The first thing to consider is that, if you can get the unemployment rate back to the historic post-war norm of 4.5 to 5 percent, that takes care of one third of the deficit issue: Capital gains go up, income taxes go up, pressure on social spending goes way down -- that takes some of the pressure off of Medicaid for example. And I think that then you move on to dealing with the fiscal cliff, and clearly revenue is going to have to be part of the fiscal cliff. And I think taxing people with over $1 million of income makes sense.
Nuciforo: When you talk about trimming or reducing the acceleration
Shein: There are a variety of things we can do. One, we should reduce military spending. The military budget is double what it was 10 years ago. We can reduce that spending and invest money in other priorities in deficit reduction. We can restore progressive taxation by allowing the Bush tax cuts to expire. We can enact a carbon tax. Part of the revenue from the Save Our Climate Act -- which I support and my opponents do not -- would be used for deficit reduction.
Q: Do you think Obama’s proposal to let the Bush-era tax cuts expire those for making more than $250,000 a year goes far enough to address the deficit in terms of raising revenue?
Nuciforo: I agree with the president’s proposal and I support it. I think that taxpayers at the very top of the income scale are paying effective tax rates that are near the lowest they’ve paid since WWII, and with all of the obligations we have in this country these days -- and I’m talking everything from infrastructure to health care -- I think we will need to restore the pre-2001 tax rate to make sure we’ve got the revenue necessary to meet our obligations.
Shein: It’s not enough by itself, but it’s the right policy on income tax rates. We should tax capital gains as income. We should require corporations to pay their fair share, and that includes ending tax breaks for General Electric and others that congressman Neal wants to make permanent. We can reduce the tax burden on individuals by restoring proper taxation of multinational corporations. U.S. based.
Neal: It doesn’t go far enough in terms of ending the deficits, but it certainly heads in the right direction.
Q: What kinds of long-term debt solutions would you advocate?
Shein: In the broader picture, we also need to move to single- payer health care. The growing expense of Medicare can be best addressed by expanding it to include everyone. That’s the best way to control costs. I’m strongly opposed to reducing Medi care or Social Security benefits. Second, we need to raise or eliminate that Social Security tax cap, which is now at $110,000. Because of bad policy, too much of our national income now falls above the Social Security tax cap, and that’s why we have funding challenges in the years beyond 2035.
Neal: Well the tax code really has to be changed. The tax code is creaking. It has now not been reformed in 25 years, and I think that it’s one of the great historic achievements of the Tip O’Neill/Regan years: fundamental tax reform. And the argument now that I would embrace and support enthusiastically is closing loop holes. And I think that’s how you broaden the base. I’ve worked hard on the Cayman Islands, Liechtenstein. I’ve battled the Bermuda loophole for a long period of time. I don’t think allowing American companies to expatriate to tax havens and then not pay American corporate taxes is a good idea.
Nuciforo: I think the solutions that we’ve talked about for the annual budget deficit are not unlike the solutions we’ll need to implement long term to deal with the national debt. The total national debt is what, $15 trillion now? In order to tackle a number of that magnitude, we will, on an annual basis, have to reduce what limited amount of money we are spending while increasing revenue.