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Lawrence Korb, you are my hero.
An aerial view of the USS George H.W. Bush (CVN-77) aircraft carrier in Norfolk, Virginia. The United States currently fields 11 aircraft carriers, while no other country has even one of comparable size and power. The Pentagon could cancel procurement of the CVN-80 aircraft carrier and retire two existing carrier battle groups and associated air wings, saving $7.74 billion.
Defense spending skyrocketed 70 percent under the Bush administration, and President Barack Obama inherited a defense budget at highs not seen since the end of World War II. There is much room for savings with military spending far out of step with the threats facing our country.
As the Obama administration and Congress try to agree on a deal to raise the debt limit, they should keep in mind that they can cut $150 billion in defense spending annually and still keep our military budget at the Reagan administration’s peak Cold War levels. Bringing the defense budget down to the levels instated by Presidents Eisenhower, George H.W. Bush, and Clinton would require reductions of $250 billion to $300 billion annually.
Here are our recommendations on how to save $400 billion through 2015 without harming U.S. national security:
Redirect DOD’s planned efficiency savings to reduce the baseline defense budget ($133 billion through 2015)
Roll back post-September 11 efforts to grow the ground forces and reduce the number of civilian DOD personnel concomitant with the reduction in military end strength ($39.16 billion through 2015)
Reduce active-duty troops in Europe and Asia by one-third ($42.5 billion through 2015)
Cancel the V-22 Osprey program ($9.15 billion through 2015)
Reform military health care ($42 billion through 2015)
Limit procurement of the Virginia-class submarine and DDG-51 destroyer to one per year; limit procurement of the littoral combat ship to two vessels per year ($20.04 billion through 2015)
Cut procurement of the Navy and Marine F-35 Joint Strike Fighter variants ($16.43 billion through 2015)
Institute an across-the-board reduction in research, development, test, and evaluation funding ($40 billion though 2015)
Reform the military pay system as the Quadrennial Review of Military Compensation recommends ($13.75 billion through 2015)
Cancel procurement of the CVN-80 aircraft carrier and retire two existing carrier battle groups and associated air wings ($7.74 billion)
Cut the U.S. nuclear arsenal to 311 operationally deployed strategic nuclear weapons ($33.72 billion)
According to analysts at the Air War College and the School of Advanced Air and Space Studies, the United States could maintain effective deterrent capabilities with only 311 strategic nuclear weapons—approximately an 84 percent reduction in current levels. Phasing in these cuts—as well as some reductions in the United States’ tactical stockpile—could save about $11.39 billion per year beginning in 2015.
Additionally, cancelling select costly and technologically challenged missile defense programs administered by the Missile Defense Agency and the armed services could reduce spending by another $1.31 billion per year.
Read more at www.americanprogress.org
Requesting fiscally responsible defense budgets has historically been a bipartisan effort. As the United States winds down its involvement in Iraq and Afghanistan, the Obama administration has an opportunity to restore defense spending to more sustainable levels. In a forthcoming report, the Center for American Progress will provide an in-depth analysis of defense spending decisions under Presidents Eisenhower, Nixon, Reagan, George H.W. Bush, and Clinton in order to inform Congress and the Obama administration’s defense and deficit decisions.
The largest attack campaign against Democrats this fall is being waged by the U.S. Chamber of Commerce, a trade association organized as a 501(c)(6) that can raise and spend unlimited funds without ever disclosing any of its donors. The Chamber has promised to spend an unprecedented $75 million to defeat candidates like Jack Conway, Sen. Barbara Boxer (D-CA), Jerry Brown, Rep. Joe Sestak (D-PA), and Rep. Tom Perriello (D-VA). As of Sept. 15th, the Chamber had aired more than 8,000 ads on behalf of GOP Senate candidates alone, according to a study from the Wesleyan Media Project. The Chamber’s spending has dwarfed every other issue group and most political party candidate committee spending. A ThinkProgress investigation has found that the Chamber funds its political attack campaign out of its general account, which solicits foreign funding. And while the Chamber will likely assert it has internal controls, foreign money is fungible, permitting the Chamber to run its unprecedented attack campaign. According to legal experts consulted by ThinkProgress, the Chamber is likely skirting longstanding campaign finance law that bans the involvement of foreign corporations in American elections.
In recent years, the Chamber has become very aggressive with its fundraising, opening offices abroad and helping to found foreign chapters (known as Business Councils or “AmChams”). While many of these foreign operations include American businesses with interests overseas, the Chamber has also spearheaded an effort to raise money from foreign corporations, including ones controlled by foreign governments. These foreign members of the Chamber send money either directly to the U.S. Chamber of Commerce, or the foreign members fund their local Chamber, which in turn, transfers dues payments back to the Chamber’s H Street office in Washington DC. These funds are commingled to the Chamber’s 501(c)(6) account which is the vehicle for the attack ads:
– The U.S. Chamber of Commerce has created a large presence in the small, oil-rich country of Bahrain. In 2006, the Chamber created a local affiliate called the “U.S.-Bahrain Business Council” (USBBC), an organization to help businesses in Bahrain take advantage of the Chamber’s “network of government and business relationships in the US and worldwide.” As the USBBC’s bylaws state, it is not an actual separate entity, rather it is simply an office of the U.S. Chamber of Commerce’s 501(c)(6) trade association. Many of the USBBC’s board members are Bahrainian, including Aluminum Bahrain, Gulf Air, Midal Cables, the Nass Group, Bahrain Maritime & Mercantile International, the Bahrain Petroleum Company (state-owned), Gulf Petrochemical Industries Company, and First Leasing Bank. With each of these foreign board members to the USBBC contributing at least $10,000 annually, the U.S. Chamber of Commerce raises well over $100,000 a year in money from foreign businesses through its operation in Bahrain. Notably, the membership form provided by the USBBC directs applicants to send or wire their money directly to the U.S. Chamber of Commerce. The membership form also explicitly states that the foreign-owned firms are welcomed.
– Like the Chamber’s involvement in Bahrain, the U.S. Chamber of Commerce operates in India through a group called “U.S.-India Business Council” (USIBC), which has offices around the world but is headquartered in the U.S. Chamber of Commerce. Dozens of Indian businesses, including some of India’s largest corporations like the State Bank of India (state-run) and ICICI Bank, are members of the U.S. Chamber of Commerce through the USIBC. Annual membership dues range from $7,500 to $15,000 or more, and the money is given directly into the Chamber’s 501(c)(6) bank account. Like the USBBC, the USIBC generates well over $200,000 a year in dues for the U.S. Chamber of Commerce from foreign businesses. On the USIBC website, many of the groups lobbying goals advocate changing American policy to help businesses in India. Under the manufacturing policy goal, USIBC boasts that it “can play a helpful role in guiding U.S. companies to India, while supporting various policy initiatives that will enhance India’s reputation as a major manufacturing and investment hub.”
– Many foreign “AmChams” or Business Councils operate outside the direct sphere of the U.S. Chamber of Commerce but nonetheless send dues money back to the U.S. Chamber of Commerce. For instance, the American Chamber of Commerce in Egypt is a separate entity based in Cairo that raises hundreds of thousands of dollars from both Egyptian firms and American businesses. However, the American Chamber of Commerce in Egypt calls itself “the most active affiliates of the U.S. Chamber of Commerce in the” Middle East. Another foreign chamber, like the Abu Dhabi AmCham, which includes American firms and Esnaad, a subsidiary of the state-run Abu Dhabi National Oil Company, claims that it is a a “dues paying member of the U.S. Chamber of Commerce and part of the global network of American Chambers of Commerce.” In Russia, the relationship between the American Chamber of Commerce there and the U.S. Chamber of Commerce here is opaque. This might be because many of the dues-paying members of the American Chamber of Commerce in Russia are Russian state-run companies, like VTB Bank, and controlled by the Russian government. Asked by ThinkProgress if the Russian Chambers pay dues back to the U.S. Chamber of Commerce, Ksenia Forsheneva, the membership development manager at the American Chamber of Commerce in Russia, replied, “Unfortunately the information that you require is closed for the public.”
Let’s Get Our Priorities Straight
Focus on Helping the Middle Class, Not Tax Cuts for the RichSOURCE: AP/Marcio Jose Sanchez
A woman stocks up on bread at Sacred Heart Community Center in San Jose, CA, on September 16, 2010. The percentage of people living in poverty jumped for the third year in a row, reaching 14.3 percent in 2009. But all Washington wants to talk about is tax cuts for the rich.
Perhaps in some parallel universe there’s a world where it makes sense for the country’s main economic policy debate over the next two months to be the tax cuts for the rich. After all, they’ve been the ones least hurt by the recession and the only ones that benefited from the economic growth in the years prior to the Great Recession. I suppose it’s possible that there’s an alternate universe where giving them even more tax cuts is sanity. But in our reality it’s absolutely absurd.
The economic challenges we face are myriad and daunting. The unemployment rate is hovering near 10 percent. Our energy policy is stuck in the 20th century. We’ve got crumbling infrastructure all over the place. The budget is projected to remain badly out of balance. And perhaps most troubling, the middle class is barely keeping its head above water. Tax cuts for rich people address precisely none of these pressing issues. They would actually make matters worse in some cases.
Why, then, are we even discussing the possibility of cutting taxes for rich people? Is it because they’ve been hit particularly hard by the recession? Hardly. When the National Bureau of Economic Research announced recently that the Great Recession came to an end in June of last year that news must have come as quite a shock to the millions of Americans who are still out of work, working fewer hours for less pay, and struggling to make ends meet. But it probably didn’t surprise people at the top of the income ladder. They’ve been recovering quite nicely.
Recently released Census data confirm that the wealthy are back on track after suffering only minor setbacks. Incomes fell across the board from 2007, before the recession began, to 2008. Everyone took a hit, from the poorest quintile to the richest. But that’s where the shared pain ends. From 2008 to 2009 almost everyone’s income continued to fall except the rich. The richest 5 percent of Americans saw their average income rise last year by $1,800.
Not so for those in the middle. Median household income continued to slide from 2008 to 2009, falling by $335. In fact, the median household has lost almost $2,200 in annual income since the recession began. That is the largest two-year decline in at least 35 years and amounts to a drop of more than 4 percent.
Those at the very bottom are also falling further behind. Overall, the percentage of people living in poverty jumped for the third year in a row, reaching 14.3 percent in 2009. That’s higher than at any point in the last 15 years. The increase in poverty rates from 2008 to 2009 was the largest year-over-year percentage increase since 1980. And one out of every five children lived in poverty last year.
If that weren’t enough, the ranks of the extremely poor also swelled significantly. The percentage of people living below 50 percent of the federal poverty level rose to the highest point since the Census began keeping track.
It should come as no surprise, then, that income inequality is fast approaching record levels. The richest 5 percent of Americans claimed almost 22 percent of all income in 2009, and the top fifth took home fully half of the nation’s income. The poorest fifth, meanwhile, earned just 3.4 percent of all the income, and the share of national income going to the vast middle dipped as well. Income inequality in 2009 was higher than at any point since at least 1967, according to one measure.
All those facts and figures reinforce what most people already know: The middle class took this recession right on the chin while the rich suffered no more than a glancing blow. And yet somehow in Washington the talk is all about tax cuts for rich people.
The Bush tax cuts—which primarily benefited the wealthy—all expire at the end of this year. President Barack Obama wants to cut taxes for everyone making less than $250,000. That’s 98 percent of the people in the country. Conservatives refuse to go along with this plan unless they can also cut taxes for the richest 2 percent of Americans.
Keeping those high-end tax cuts in place would cost the federal government more than $800 billion over the next 10 years after including the costs of the added debt. More than 80 percent of the benefit will go to people making at least $1 million a year, and their average tax cut would be more than $100,000. That’s almost twice what the median American household makes in a year.
This is how absurd our national conversation has become. We’re actually fighting over whether we should borrow hundreds of billions of dollars and give that money to the only group of people in the country who are already back on track. Instead of focusing on a policy that would exclusively benefit those who make more than $250,000 a year we should be discussing how to get wages and middle-class incomes rising again, the best ways to bring people out of poverty, and what we can do to address the ever-widening disparities between the super-rich and everyone else. Our priorities are indeed skewed when the dominant argument over economic policy pertains to $100,000 tax cuts for millionaires while our middle class is barely treading water.
Michael Linden is the Associate Director for Tax and Budget Policy and Heather Boushey is a Senior Economist at American Progress.
More from CAP on the Bush tax cuts:
- Three Good Reasons to Let the High-End Bush Tax Cuts Disappear by Michael Linden and Michael Ettlinger
- Golden Years for the Gilded by Michael Linden
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