Mar 11 2013
Senator Bernie Sanders: Republicans Would Rather Cut The Social Safety Net than Increase Government Revenue
HARTMANN: It is Brunch with Bernie. Senator Sanders welcome to the program. What’s going on with the Senate?
SANDERS: I’m on five committees. And one of the committees I’m on is the Budget Committee. And I think listeners can guess that the Budget Committee has been working overtime lately, in fact, I think we have about five separate meetings this week. As an Independent, I caucus with the democrats. And let me take a minute to tell you what we’re trying to work on and what is going on.
I think fiscal cliffs and continuing resolutions and all types of other fiscal issues can sometimes get a little bit crazy out there. So let me just try to touch upon where we are at. I think most people recognize that the deficit is a serious situation. The deficit has, by the way, gone down. We’re at about 850 billion this year. It’s less than it used to be. Our national debt accumulation of deficits is over 16 trillion, which is a lot of money. The first point to be made when we talk about the deficit is how we got into the deficit. I think many listeners know that the deficit has everything in the world to do with Bush taking us into two wars and not paying for it, huge tax breaks for the wealthiest people in this country and most importantly, I think the Wall Street caused recession which resulted in massive unemployment. When people are unemployed they are not paying their federal taxes and businesses are going under. And, one of the major causes of the deficit right now is that revenue, the amount of money coming into the Federal Government as a percentage of the economy the gross domestic product, is at 15.8%. That is the lowest it has been in 60 years.
So when people like Mitch McConnell and other Republicans say, well the only thing we can do to deal with the deficit is to cut Social Security, cut Medicare, cut Medicaid, cut cut cut cut, they are wrong because the amount of revenue coming in is at the lowest point it has been as a percentage of GDP in 60 years. So we have to make sure that we are not spending more than we should but we also have to increase the amount of revenue that we bring in. And Republicans like John Boehner and Mitch McConnell are saying that they don’t want any more revenue. And they say that, at a time when the wealthiest people in this country are doing phenomenally well.
Let me give you one statistic which I think should just knock the socks off of everybody listening. A recent study came out looking at income from 2009 to 2011. Over 100% of all the new income generated Thom went to the top 1%. This means the bottom 99 % saw a decline in their income. When people talk about economic growth they should understand that all of the new income generated in America went to the top 1%. Meanwhile, what we’re looking at is real unemployment with some unemployment statistics which were good with a couple of hundred thousand jobs being created. That is good, but the fact is that the real unemployment is not the 7.7% that the papers are screaming about today. Real unemployment is over 14% if you include those people who’ve given up looking for work and people working part time when they want to work full time. Millions of people are out there working 20 hours a week when they want to work full time. You have employers who have cut back on work hours — they don’t employ people 40 hours a week, they do 30 hours a week. Add all that together and you are at over 14%. Those numbers are higher for young people and they are higher for people of color.
So what you have is the wealthiest people doing phenomenally well. If you look at the stock market and you look at corporate profits, corporate profits are also in many cases at record breaking levels. Corporations are doing phenomenally well. And here is the kicker, the effective tax rate that corporations are paying today is about 12% of profits which is the lowest that it has been since 1972. You have one out of four major corporations in America paying nothing in taxes.
Let me give you some examples of what I mean by that. In 2010 Bank of America, set up more than 200 subsidiaries in the Cayman Islands. They did that not because they liked the climate in the Cayman Islands, which is no doubt very sunny and nice, but it’s how they avoided paying U.S. taxes. And it worked. So in 2010, not only did Bank of America not pay anything in federal income taxes, it received a rebate from the IRS worth $1.9 billion dollars. Citigroup, one of the large financial institutions in this country which we bailed out when their greed and recklessness brought them to the edge of bankruptcy, paid no federal income taxes for the last four years after establishing 25 subsidiaries and off shore tax havens and receiving more than 2.5 trillion in total financial assistance from the Fed and the Treasury as part of the bailout. They received huge amounts of money and bailouts and have not paid federal income taxes for the last four years. In 2009 Exxon Mobil, which has historically been one of the most profitable corporations in the world, made 19 billion in profits and not only did Exxon avoid paying Federal income taxes that year, they actually received a $156 million dollar rebate from the IRS. You’ve got the energy companies, you’ve got Wall Street either paying nothing or very very little in Federal taxes.
So the debate that we’re having right now is a pretty simple one. You have the Republicans saying that all these corporations who are paying nothing in taxes and some of them getting rebates is fine and that the real way to do deficit reduction is to cut Social Security, Medicare, Medicaid, education, nutrition, infrastructure, etc. etc. But some of us Progressives are saying, we have already seen massive cuts as part of deficit reduction, well over a trillion dollars, and now we have to ask the wealthy and large corporations to help us with deficit reduction. That’s the big debate. Unfortunately, on this issue, the President has not been playing a particularly good role. As you know, he is out to dinner and lunch with a bunch of Republicans and what they’re talking about is some type of grand bargain which would almost definitely include cuts in Social Security and cuts in benefits for disabled veterans. And that is something as chairman of the Veterans Committee that I will very very strongly oppose. So what if the debate about deficit reduction is number one, how do you do it in a way that’s fair? Number two, to make sure that we do not forget that while deficit reduction is a serious issue and we are making some progress, what’s a more serious issue is creating the millions of jobs that working families need to make a living wage.
Listen to the interview with Thom Hartmann and Senator Bernie Sanders.
Thom’s Guest: Bernie Sanders, U.S. Senator from Vermont.
Take a look at Bernie Sanders’ website.
SONALI KOLHATKAR IS ON MATERNITY LEAVE.