Maine’s delegation should support President Barack Obama’s bold yet sensible spending plan.

As Congress debates President Barack Obama’s groundbreaking budget in preparation for a vote later this month, lobbyists are lining up to oppose proposals that would pay for health care reform, reduce global warming, create more jobs and improve our education system.

All of these initiatives are crucial to pulling our state and our country out of the deepest recession in decades and creating long-term economic stability for all Americans.

But none will occur unless Congress can agree on a fair and responsible plan for footing the bill and reducing the deficit over time. While cutting waste in such areas as Medicare, housing, education and farm subsidies are important sources of potential savings, they won’t provide enough to fund the desperately needed shift in priorities called for under Obama’s budget.

Many of the president’s proposals are instrumental to the long-term economic health of our state and the lives of residents currently struggling with unemployment and limited prospects for a better future. For too long, public policies have rewarded the wealthiest among us and allowed the average American to lose ground. The proposals outlined in Obama’s budget will extend opportunities to more people while reducing the federal debt left to the next generation.

Providing affordable, quality health care for all Americans, for example, is not just the right thing to do, it is vital to our nation’s long-term prosperity. Rising health care costs threaten our families and our businesses. To pay for health care reform and other important programs and services, however, Maine’s congressional delegation must be willing to make the tough but responsible choices to raise the needed revenue.

The president’s budget provides a blueprint for doing just that.

Obama proposes funding his $634 billion expansion of health care, which would provide quality care for most Americans, in part by lowering the value of income tax deductions for the wealthiest households (those making more than $250,000 a year) from 35 cents on the dollar to 28 cents. This change, which returns the rate to what it was during the latter part of the Reagan administration, would produce $318 billion in savings over the next 10 years.

(When this is combined with the budget’s $316 billion in projected savings from reduced payments to expensive private insurance such as Medicare Advantage, it would cover the cost of the health care reform plan.)

And although 98.8 percent of taxpayers would be unaffected by the income tax change, opposition in Congress has been swift, with much of it claiming that reducing this deduction value would lead to a subsequent reduction in charitable giving.

However, the Center on Budget and Policy Priorities found that there would be little impact, with charitable giving dropping by an estimated 1.3 percent, which would be offset by policies that address unmet needs for vulnerable people. It also found the lower deduction rate would have a minimal effect on home-buying and home construction.

Similarly, some in Congress have expressed concerns about other suggested revenue increases or cost-saving proposals, such as the president’s plan to reduce global warming by auctioning permits to businesses that pollute.

In addition to limiting greenhouse gas emissions, this plan would raise $65 billion in revenue to pay for permanent expansion of refundable tax credits, such as the Earned Income Tax Credit, the Child Tax Credit and a new credit that assists college students.

These credits would reimburse families for increased consumer costs from such legislation and provide an important financial boost for the poorest families.

We are in a time that calls for bold action. We need to retool how we use government so it does not just reward the wealthy, but provides opportunity for all Americans. We need an educational system that allows our children to compete in a global society and our businesses to flourish. We need a health care system that allows every child to grow up healthy and strong, while also containing costs. And we need to address climate change through measures that are effective and affordable.

These are the proposals the president has put forward; they are the issues our congressional delegation cares about. While there is room for constructive debate, Congress should not allow the budget to become yet another political showdown that loses sight of what matters most – the American people.

Nicole Witherbee, Ph.D, is the federal budget analyst at the Maine Center for Economic Policy. E-mail: [email protected]


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