While the co-chairs of President Obama’s fiscal commission Erskine Bowles and Alan Simpson spent the day gathering support from panel members for their deficit reduction proposal, one of the members released yet another plan.
This one is from former Service Employees International Union (SEIU) President Andy Stern, whose proposal is entitled “The 21st Century Plan for America’s Leadership”. He says it’s about “the future of the most basic values and beliefs of our country…and builds on the genius of the founders of our country.”
Stern isn’t the first panel member to release a separate plan. Two other alternatives came from the Bipartisan Policy Center’s (BPC) Debt Reduction Task Force, co-chaired by former Senate Budget Committee Chairman Pete Domenici, R-N.M., and former White House Budget Director Alice Rivlin. Another was submitted by liberal Rep. Jan Schakowsky, D-Ill., who was the first panel member to openly oppose the package of spending cuts and tax increases in the Bowles-Simpson plan.
Like the Bowles-Simpson plan, Stern’s proposal would reduce the deficit by $4 trillion by 2020. But unlike the other plans, Stern calls for also addressing a second deficit, which he calls “an investment deficit”.
Stern, now a fellow at Georgetown University’s Public Policy Institute, wants to create a new Invest in America fund (similar to the Transportation Trust Fund) beginning in 2015 with an initial investment of $75 billion dollars, increasing by 3 percent annually. An outside panel each year would recommend a range of long-term investments in infrastructure, a smart grid, education, and broadband.
He would fund the program through a short-term stock-transfer fees, a tax on Internet gaming, and a new top income-tax rate for earnings in excess of $1 million. His hope is that this fund would create jobs and allow businesses to compete in the global economy.
Stern said the issues he wants to discuss include whether the U.S. can continue to spend more than 5 percent of GDP on health care. He also raised the idea of simplifying the tax laws and adopting a value added tax, which gives preference to exports and taxes imports.
Stern is still undecided about his vote on the Bowles-Simpson plan but has showed signs of leaning against it. He told The Fiscal Times that his main concern that it doesn’t provide for enough short and long term investments, especially in education, job creation and infrastructure.
The full 18-member panel will vote on the Bowles-Simpson proposals Friday morning and is expected come up short of the 14-vote supermajority needed to send it to Congress.
When asked why he released his proposal the day before the final vote, Stern said he had submitted many of his ideas to the co-chairs and there is nothing in his report that they hadn’t already heard.
“This wasn’t an attempt to say we don’t have a problem,” Stern said. “But it was also not an attempt to say we are going to solve this problem simply by cutting. There is an investment part here that I think for American competitiveness is essential.”
