Fairness in Taxation Act of 2011

Mr. Speaker, I rise today as a member of the Progressive Caucus to draw attention to the devastating effects that could be caused if the United States were to default on its debt. First, let's be clear that raising the debt ceiling will have no effect whatsoever on any new spending that the Congress might do. It's simply giving the government authority to pay its bills, to pay its bills for obligations that the Congress has already authorized.

Second, while Republicans have attempted time and time again to pin the current deficit on President Obama, the facts cannot be denied: It was the policies of the Bush years that got us here. It was just a decade ago that President Clinton left office not with just a balanced budget but a surplus, and the Congressional Budget Office declared in 2001, ``The outlook for the Federal budget over the next decade continues to be bright.'' That quote, of course, came before the 2001 Bush tax cuts were signed into law; two wars that weren't paid for, put on the credit card; two tax cuts that weren't paid for and that mainly benefited the wealthy; and a devastating recession that may have been prevented, had government regulators not turned a blind eye to Wall Street greed. The Bush policies ran up the bills. Those are the bills that our country is committed to pay, and those are the bills that need to be paid if the full faith and credit of the United States is to be protected.

So now this Republican-manufactured crisis could be solved in 5 minutes if we simply passed a clean debt ceiling increase, like we did seven, eight times during the Bush administration, 18 times under Ronald Reagan, and then turned our attention immediately to ways to put our fiscal house in order, focusing on the real crisis, which is the jobs crisis. Instead, Republicans are choosing to hold our Nation's financial standing hostage, with potentially devastating consequences.

Allowing a default on the debt would essentially be a tax on every American family. Interest rates on everything, from mortgages and auto loans to credit cards and small business loans, would immediately soar. A conservative estimate suggests that the effect of an increase in interest rates could cost a homeowner with a 30-year mortgage of $172,000 an additional $19,100 more over the life of the loan. A drop in the stock market would hit the savings and retirement accounts of middle class Americans, less available credit for small businesses and consumers, and lower economic growth that could cost hundreds of thousands of jobs.

In addition, if the country can't pay its bills, an unthinkable scenario becomes a reality, having to choose between what aspects of the government to fund and what bills to pay.

Seventy million checks are due to go out next Wednesday. Those include Social Security and veterans and our military families, and these checks are threatened. That is the threat the Republicans are willing to make, holding the full faith and credit of the United States hostage in order to push for extreme policies that would gut Social Security and Medicare and Medicaid and devastate the economy and the middle class in order to protect hedge fund managers and corporations that

ship our jobs overseas. That is what the Republicans are advocating, but they are not willing to ask for one penny more for millionaires and billionaires.

We need to deal with our fiscal challenges, and I have offered proposals for how to do that in a way that protects the social safety net and what is now the disappearing middle class.

First, we need to create jobs. Putting people back to work will raise revenues and bring down the deficit as a proportion of the economy.

Second, we need to eliminate spending we don't need, such as billions of dollars in waste spent by the Pentagon. But we need to protect spending on vital programs like Social Security, Medicare, and Medicaid.

And finally, we need to raise revenues in a fair way.

I've introduced the Fairness in Taxation Act, H.R. 1124, which would create new tax brackets beginning at 45 percent for income over $1 million a year and rising to 49 percent for income at $1 billion a year; and yes, there are Americans who make that. And according to an estimate by Citizens for Tax Justice, my legislation could raise as much as $800 billion over the next 10 years. Those are the types of proposals that should be considered so that we can achieve fiscal responsibility in a way that protects seniors and children and the middle class and all those who aspire to it.

Right now the American Dream itself is at stake. It is slipping through the hands of people that used to be middle class. We cannot tolerate that. We need to raise the debt ceiling.

On Thursday, I will join my colleague Representative Barbara Lee, Catholic Charities USA, the Jewish Council for Public Affairs, the National Council of Churches, and several other Congress Members that my colleague mentioned to participate in the Food Stamp Challenge, an effort to draw attention to the crisis of hunger in America.

As part of the challenge, participants will eat on the average SNAP allotment. That's what we call it now. There's no more food stamps. Now people get a card that they can actually use to charge the food. But we'll eat on the average SNAP allotment of $1.50 per meal for a week.

Having participated in this event in the past, I know it is extremely difficult to eat a healthy diet under such strict budgetary guidelines. Nevertheless, SNAP is the difference between chronic hunger and a basic meal for 45 million Americans.

Now, obviously, that means I'm going to give up any Starbucks coffee. But even the $1 coffee that I was able to buy in the cloakroom just before I came out here is something that will be just too precious to spend. That's almost a whole meal's worth just to buy that cup of coffee.

In 2010, 14.5 percent of American households were food insecure, meaning they lacked the capacity to put enough food on their tables. They relied on nutrition programs like SNAP to make ends meet.

In this, the wealthiest country in the world, one out of four American children is now food insecure, meaning there are nights that they go to sleep hungry. It really is a moral issue, as my colleague pointed out.

The Supplemental Nutrition Assistance Program--that's SNAP--provides an essential safety net for American families. More than half of SNAP recipients are children.

The Republican budget passed in the House--with no Democratic support, I might add--would cut $127 billion from SNAP over the next decade, a 20 percent cut. The House Agriculture appropriations bill-- passed, again, with no Democratic support--would also cut the SNAP program.

You know, these may be just numbers, $127 billion here and several billion dollars there, but their effects are very real for people across the country. I recently received dozens of messages on paper plates from EZRA Multi-Service Center in Chicago. They rely on SNAP to make ends meet, and they

fear the repercussions of further cuts. The plates answer the question: What would happen to you if SNAP benefits are cut?

Heather C. in Chicago said that it's already hard enough to feed her children as it is, and cutting SNAP would mean her kids would suffer. She says, ``My food stamps stretch out for about 2 weeks out of the month, so if I didn't have them, then it would cost me an extra $250 a month to feed my children. Food these days is so expensive, and the more help we can get to feed our kids the better.''

And, by the way, most of the people on the SNAP program are on just for a temporary amount of time, just like the Congresswoman said, to bridge a gap when they're really in need.

Jack K. worked for decades as a taxicab driver but retired with very little wealth. He says now, ``I now live in subsidized housing and depend upon soup kitchens and food pantries for food.''

An anonymous client from Chicago writes that if SNAP benefits are cut, ``it would be impossible for me to feed my four children every day. It's bad enough that because of this recession there's a lack of jobs. That alone makes it difficult to provide for them. These programs give people the temporary help they need to be okay until a job is obtained. Please take into consideration the children who depend on their parents for survival.''

One commenter said she needs the program because she lost her life savings to cover medical costs which continue to this day. ``Instead of being middle class, I am now living below the poverty level,'' she says. ``Without assistance, I would be back in a homeless shelter. As it is now, I am unable to afford utilities, between my rent and medical expenses.''

And Robert B. in Chicago said the bad economy has left him in long- term unemployment. ``I lost everything. If my benefits were cut, I wouldn't eat for awhile.''

We have options in this wealthiest country in the world. For example, I've introduced H.R. 1124, the Fairness in Taxation Act, which would raise revenues by increasing tax rates on the 1 percent richest Americans. Income over $1 million a year would be taxed at 45 percent, moving up to 49 percent for income over $1 billion. And, by the way, that's lower than during the Reagan years.

So I invite my colleagues to join me in the Food Stamp Challenge and learn, just even for a week, what it's like to live on $1.50 a meal.