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| Occupy Washington D. C. assembly |
Prepared by Occupy Washington DC
Freedom Plaza, November
2011
The disconnect between Congress and the
people is
vast. For decades, Congress has been passing laws that benefit the 1%,
their campaign donors and big business interests, rather than creating a fair
economy that serves all U.S. citizens. With this report Occupy Washington, DC
shows that Congress is out of touch with evidence-based solutions, supported by
the majority of Americans that can revive the economy, reduce the deficit and
wealth divide while create millions of jobs.
OccupyWashingtonDC.org seeks a major transformation to a participatory
democracy in the economy as well as in government. For forty years,
concentrated corporate interests have acted with intent to take over government and other institutions. We seek an
end to the rule of concentrated wealth and corporate power by shifting control,
wealth and ownership to the people.
This report puts forward evidence-based solutions that
will re-start the economy and avoid placing financial burdens on future
generations. For the most part these ideas are not new. They are
well accepted by economists and are consistent with the views of super
majorities of Americans on key issues. Further, more than
three-quarters of U.S. citizens say the country’s economic structure is out of balance and “favors a very small proportion
of the rich over the rest of the country.” They are right. The solutions to our
economic crisis are evident but they are blocked by those who profit from the
status quo and control elected officials through the corrupt U.S. political
system and its money-based elections.
The elites in Washington, DC seek to erase deficits that
were caused by increases in war and military spending, tax breaks for the
wealthy and corporations, the increased cost of health care, as well as bank
bailouts, and increased costs and lost revenue from the economic collapse. The
bi-partisan elites seek to cut $1.2 trillion in deficits even though there is
no outcry for such cuts or evidence in the economy that they are urgently
needed. They are proposing cuts in services to seniors, students, the
poor and middle-working class households who did not cause the crash but
already suffer from its consequences. This report shows that we can get the
economy moving, reduce the wealth divide and control government spending while
helping the 99%.
This report should not be considered the demand of the
Occupy Movement. It was prepared[1] by one Occupation, Freedom Plaza in Washington, DC and it does not reflect even
that Occupation’s full demands. Most of this report provides solutions to
the deficit questions the Congressional Super Committee is attempting to
address while also re-starting the economy. The difference between the
Occupied Super Committee report and the Congressional Super Committee report
will be stark and further demonstrate the corruption and dysfunction of
government. While this report’s recommendations would benefit the 99%,
the report that will come out of the congressional Super Committee will benefit
the 1%.
Creating a Fair Tax System That Shrinks the Wealth
Divide
The United States does not have a lack of financial
resources; it has an intentionally unfair distribution of resources. The
federal income tax has become less progressive and the rate paid by the
wealthiest has been cut dramatically in recent decades. From 1944 through
1951, the highest marginal tax rate for individuals was 91%, increasing to 92%
for 1952 and 1953, and reverting to 91% for tax years 1954 through 1963. In
1964, the top marginal tax rate for individuals was 77%. From 1965 through 1981
the top rate was 70%. The top marginal tax rate was lowered to 50% for tax
years 1982 through 1986 and today it is just 35%.
The tax on investment income, capital gains, has also been dramatically reduced. The maximum statutory rate on
long-term capital gains was 28% in 1991, 20% in 1997 and has been merely 15%
since 2003.
The wealth divide has become extreme over the past three decades and tax
policies have exacerbated this trend; much of the tax code exemplifies policies
for the 1% at the expense of the 99%. The wealth divide is one of the
foundational reasons why the economy no longer works and is in steady decline
for most people in the United States. The tax code inadequately funds
government, but that is the result of unfair tax cuts, not because America is
broke (it isn’t). As Andrew Fieldhouse of the Economic Policy Institute
testified “Income per capita has jumped 66% over the past 30 years, and is
projected to grow another 60% over the next 30 years.” The country needs to put
in place policies that reduce the wealth divide and share wealth fairly so that
when the economy grows it benefits all citizens, not just the 1%.
The recommendations below begin to correct the unfair
policies of the last three decades, but these are only first steps to the
transformational changes that are needed.
•
Tax the highest income households: From 1960 to
2004, the top 0.1 percent of U.S. taxpayers — the wealthiest one in one
thousand — have seen the share of their income paid in total federal taxes drop
from 60% to 24.3%. America’s highest income-earners — the top 400 people who
have wealth equal to 154 million Americans — have seen their federal income tax
drop from 51.2% in 1955 to 18.1% in 2008. If the top 400 paid as much of their
incomes in personal income tax as the top 400 of 1955, the federal treasury
would have collected $50 billion more in revenue from just those 400 taxpayers.
If the top 0.1% of taxpayers — Americans with incomes that averaged $4.4
million — had paid total federal taxes at the same rate as the top 0.1% paid
these taxes in 1960, the federal treasury would have collected an additional
$250 billion in revenue.
•
Merely
not extending the Bush
tax cuts
would add nearly $500 billion each year in tax revenue. Thus in just over two years
the goal of the deficit committee would be met. This would be
insufficient to correct the wealth divide and does not go as far as Occupy Washington,
DC advocates.
•
A tax
of a half of a percent or less on Wall Street speculation could raise over $800 billion in a decade. The Speculation Tax on the purchase of
stocks, bonds and derivatives would be a tiny tax with a big impact.
People in the U.S. pay much higher taxes on purchases of food and clothing; it
is only fair that the wealthy pay taxes on purchasing wealth instruments.
•
A fair
tax on capital gains, treating it as ordinary income would raise $1 trillion over a decade. Wealth-based income
and work-based income should be treated equally under the law as it used to be.
Warren Buffet has received a great deal of attention for pointing out that he
pays a lower tax rate than his secretary or anyone who works for him. The reason for this is that investment income is taxed
at a much lower rate than income from labor. The United States needs to
tax wealth more and work less.
•
Congress
should enact a “pure worldwide” tax system, in which all profits of U.S.
corporations, whether they are generated in the U.S. or abroad, would be taxed
by the U.S. This would end “deferral,” i.e. where taxes are deferred until
money is brought back into the United States. U.S. corporations would continue
to receive a credit against any taxes they pay to a foreign government (the
foreign tax credit) so that profits are not double-taxed. Under a pure
worldwide tax system, corporations would have little or no tax incentive to
move jobs offshore because the U.S. would tax profits of corporations no matter
where they are generated. The Treasury estimates that deferral of U.S. taxes on
offshore corporate profits costs close to $50 billion each year, and many
experts think this estimate is substantially understated.
•
Ending
deferral does not even address the hundreds of billions lost through tax
havens. Tax
havens should be shut down through the passage of the Stop Tax Haven Abuse Act.
In fact, the U.S. Treasury estimates this costs $100 billion each year. In 2006 the U.S. Senate Permanent Subcommittee on
Investigations reported that Americans now have more than $1 trillion in assets
offshore and illegally evade between $40 and $70 billion in U.S. taxes each
year through the use of offshore tax schemes.
•
Closing
corporate tax loopholes would return the fair share of taxes paid by
corporations to the funding of government. Declining corporate taxation is another
prime factor in increasing deficits. Corporate income taxes have fallen from
roughly 4.8% of GDP in the 1950s to only 1.8% of GDP over the past decade.
Ending just two large breaks, deferral of overseas revenue and accelerated
depreciation would raise about $114 billion over a decade. The Treasury Department lists $365
billion in corporate tax breaks being gifted annually — that’s $3.65 trillion
over the next 10 years. Due to tax loopholes, corporations pay record low tax
rates — they actually pay 21% on average. Indeed, a recent report by Citizens for Tax Justice found that Wells Fargo received $18
billion in tax breaks, while both Verizon and General Electric paid negative
taxes. Earlier Citizens
for Tax Justice
reported that 12 major companies which together made $171 billion in profits
from 2008-2010 paid a negative $2.5 billion in taxes, thanks to $62
billion in tax subsidies.
The taxes described above would generate at least $600
billion annually. The goal of the Joint Deficit Committee of $1.2
trillion over ten years could be met in two years. The United States has more
than enough wealth to meet the needs of its people.
Cutting Spending for Economic Security
•
Military
spending, found in the Department of Defense and other departments, has
increased dramatically during each year that George W. Bush and Barack Obama
have been president, roughly doubling during the past decade both as measured
in real dollars and as a percentage share of discretionary spending.
Military and related “security” spending is now at over $1 trillion per year
and comprises well over half of federal discretionary spending. It is
also very nearly equal to the military spending of all other nations on earth
combined. Ending our two most costly wars in Iraq and Afghanistan before
the 2013 fiscal year budget would save $1.8 trillion, as compared with ending those wars
on the currently planned schedule, with savings of $108 billion per year.
•
The
U.S. should only spend what it needs to defend itself. The military budget can
be cut significantly by replacing private contractors, closing some of the more than 1,100
foreign military bases and outposts and eliminating weapons systems many of which the Pentagon says it
does not need.
•
The Sustainable Defense Task Force recommended modest cuts of $1 trillion
over the next decade, not counting savings from ending the current wars. U.S.
military spending could be cut by 80% and still be comfortably well ahead of
any other nation's military spending. See Creating Jobs and Restarting
the Economy below on
how these funds could be used to create jobs, restart the economy and provide
much-needed services and infrastructure to the country.
•
Corporate
tax subsidies through tax breaks and giveaways are a form of spending that
needs to be cut.[2] The U.S. needs to end corporate tax subsidies and repatriate
overseas funds. According to Citizens for Tax Justice, the 280 most profitable U.S.
corporations received tax subsidies amounting to $222.7 billion from 2008-2010.
These companies sheltered half their profit from taxes. The result: 30
companies paid less than 0 taxes despite $160 billion in pre-tax profits; 78 of
the 280 companies enjoyed at least one year in which their federal income tax
was zero or less; weapons maker’s paid a mere 10.6 percent rate in 2010;
financial services received the largest share (16.8 percent) of all federal tax
subsidies over the last three years.
•
Negotiating better prices with Big Pharma would save more than
$200 billion over ten years in pharmaceutical costs. Reforms of Medicare could
offer much larger savings. Expanding to an improved Medicare
for all system would control the cost of health care spending while covering
all in the United States reducing significant financial burdens often resulting
in bankruptcy and foreclosure.
Creating Jobs and Restarting the Economy
One in six people who would like a full-time job are
unable to find one. The unemployment rate of 9% greatly underestimates
unemployment. If the pre-1994 measures were used, e.g. including
discouraged workers who want jobs, as well as part-time workers who want full
time jobs the underemployment and unemployment rate would be 23%. The measures listed below would
effectively create jobs and restart the economy. Job loss means less tax
revenue and more expenditure by the government. A critical ingredient to
reducing the deficit is job creation.
•
One
million jobs could be created annually by writing down all underwater mortgages
to market value. Correcting housing mortgages to the real value of homes
would inject $71 billion per year into the economy and save families $6,500 per
year on mortgage payments. This would also fix the housing crisis which is an
anchor holding back any recovery, according to a new report by The New Bottom Line. One in five mortgage holders owe more on their
mortgage than their home is actually worth. Banks should not continue to be
able to profit from housing bubble prices – a bubble they created with their
poor and unethical lending practices. Adjusting mortgages to the real value of
homes is a fair way to fix the housing market.
•
Failure
to stop the foreclosure crisis will ensure a stalled economy. It is an
essential step to economic repair. This could be done without Congress as Fannie and Freddie together hold
$1.5 trillion in housing loans or mortgage-backed securities which could be
directed to fix the mortgages. The Federal Reserve has just under a
trillion and could unilaterally correct loans to reflect real value. And, the
banks could be pressured. Last year, the nation’s top six banks paid out more
than twice the cost of re-writing mortgages to make them fair ($71billion per
year) in bonuses and compensation alone ($146 billion in 2010). The nation’s
banks are sitting on a historically high level of cash reserves of $1.64
trillion.
•
A fundamental reason for job stagnation is relying on the
private sector to create jobs and refusing to engage in direct government job
creation in the public sector. According to Business Week, “Since the end of the recession,
government employment--including federal, state, and local jobs--has fallen by
roughly 600,000. State and local governments have particularly felt the pain,
according to a report released this week by the Census Bureau, which shows that
there were over 200,000 fewer state and local government jobs in 2010 than in
2009.” The most recent jobs report shows a continued downward trend in
government jobs. State deficits and federal inaction ensure these job losses
will continue.
•
In
addition to our need to rebuild the nation’s physical infrastructure, there is
an even more urgent need to rebuild its human infrastructure. The drastic
rise in inequality and joblessness has torn apart the social fabric, destroying
countless individual lives, families, urban neighborhoods, and rural
communities across our country. For more than a generation, the major “growth
industry” in impoverished communities has been the illegal drug industry.
Persistent, trans-generational poverty is directly responsible for the fact
that the U.S. now leads the world in imprisoning its own people: 2.5 million, by the latest count, with more than
5 million more under some form of
court supervision.
(China, with its 2.5 billion people, runs a poor second.) Although most of the
prison population is white, people of color are
disproportionately represented, leading many analysts to declare that the mass incarceration of African-Americans and Latinos has created a new caste
of unemployable "untouchables." Only a massive public works,
community development, and job training program can end the destruction of
American communities and stop the shameful criminalization of poverty.
•
As
public sector jobs are created, the country must also strengthen the public
sector in ways that will require new democratic reforms to put publicly owned
or financed enterprises under popular control. A long-term goal should be to
democratize the economy so the people of the United States share in wealth and
ownership as well as influence over the economy. See below Democratizing the
Economy, Shifting Economic Power, Wealth and Ownership to all in the United
States. There is a
desperate need for a mass public works program, not only to create jobs, but
also to meet the urgent needs of the country.
•
The
American Society of Civil Engineers estimated that failure to fix the nation’s
infrastructure has created serious damage so extensive that $2.2 trillion will
be required by 2014 just to meet current demands. The ASCE gave the nation’s
infrastructure an overall grade of “D.” Its report cited cracking levees, a
quarter of the nation’s existing bridges sagging, leaking pipes losing billions
of gallons of drinking water per day, aging sewers releasing human waste into
rivers and lakes, horrendous traffic congestion and air and water pollution.
This is not “make work” but urgently needed work. A public works program modeled after
the depression era Works Progress Administration would create 15 million jobs and
build the infrastructure needed to create a sustainable economy.
•
Spending
on the military is a drag on the economy, not just because it makes up 55% of
federal discretionary spending, but because more jobs would be created by spending on
education, infrastructure, green energy, or even on tax cuts for
non-billionaires. Converting a fraction of current military spending to
other industries and tax cuts could produce 29 million new jobs, one for every unemployed or
underemployed person in the United States, even after finding new employment
for everyone displaced during the conversion.
•
Putting
in place improved Medicare for all would provide a major stimulus for the U.S. economy not only by
controlling the cost of health care and reducing deficits but by creating 2.6
million new jobs, and infusing $317 billion in new business and public
revenues, with another $100 billion in wages into the U.S. economy.
•
Erasing
student loan debt would have an immediate stimulating effect on the economy. As
Mychal Smith writes: “[C]onsider the potential
impact on the economy if all of a sudden 35 million people were able to add to
their monthly budget anywhere between $400 and $1000 that they no longer needed
to satisfy exorbitant student loan repayments. . . . Debt free degree holders
would allow for more risk taking and innovation.” As Robert Applebaum, an advocate of forgiving student
loans writes: “the ‘educated poor’ are not buying
homes, not starting businesses or families, not inventing, investing or
innovating and otherwise engaging in economically productive activities.”
And, as Cryn Johannsen of All Education Matters points out,
this would be a long term stimulus because college debts are multi-decade in
length. Johannsen describes a “crisis that is affecting millions of educated
Americans. We are indebted for life. Most of us will never be able to pay off
our loans for college.” Education is a critical building block for the economy
and going forward the United States must develop a system of higher education
that does not require students to go into debt just to receive an education.
Rather than a loan-based system the U.S. needs a system based on grants,
scholarships and public funding.
These recommendations would create millions of jobs and
get the economy moving again. As the economy develops and expands,
programs need to be put in place so that new wealth is shared more fairly;
workers have greater control over their work through employee ownership and
protections for collective bargaining; and so some of the profits created by
public investment (i.e. by tax dollars) are shared among all U.S. taxpayers.
See below Democratizing the Economy, Shifting Economic Power, Wealth and
Ownership to all U.S. Citizens.
Protecting and Improving Social Security
Saving Social Security is not a traditional left-right
battle. Polls consistently show that people across the political spectrum overwhelmingly support Social Security and do not want to
see it cut. Even the vast majority of Tea Party Republicans support these programs. Cutting Social Security is a Wall
Street agenda of the 1% that opposes the interests of the rest of us. As Dean Baker writes “There is a bipartisan consensus
among the elites that these programs should be cut. The guiding philosophy of
this drive is that public money that goes to programs for middle income and
poor people is money that could be in the pockets of the wealthy.”
Social Security does not contribute to the deficit.
Social Security is financed by a designated Social Security tax and there is
more than $2.5 trillion in the Social Security trust fund. The efforts to
cut Social Security to fix the deficit are a fraud designed to enrich Wall
Street financiers by forcing people into the private retirement market.
The temporary payroll tax cut will create some jobs, but not
enough to get the economy moving and is not the most effective tax cut stimulus. Further, it
unnecessarily puts Social Security in jeopardy by reducing taxes designated for
Social Security. The Congressional Budget Office estimates the cut will reduce federal revenues by $112
billion over
the next two years. The government will have to borrow to fill that hole in the
Social Security trust fund, giving opponents of Social Security another
argument against the program.
Social Security faces no immediate threat of insolvency.
The Congressional Budget Office just released new projections showing that the Social Security
trust fund is fully solvent through the year 2038. Even after that date, the
program would have enough money to pay 81% of scheduled benefits for the rest
of the century. Below are recommendations that would strengthen social
security.
•
The
funding of Social Security is easy to fix. Currently, the tax on wages subject
to the tax is capped at $107,000. The upward redistribution of income over the
last three decades has caused a large share of wage income to escape taxation.
If all wage income were subject to the tax, then it would leave Social Security
fully solvent for its 75-year planning period.
•
The
Social Security tax has not kept up with the wealth divide. In 1983, the Social Security tax
ceiling was set so the tax would hit 90% of all wages covered by Social
Security. That 90% figure was built into the 1983 Greenspan Commission’s fix of
Social Security. Requiring the ceiling to rise with inflation was expected to
result in the Social Security tax continuing to hit 90% of total income. But,
in 1983 no one predicted the extreme wealth divide that exists today. The
richest 1% of Americans got 11.6% of total income in 1983. Today the top 1%
takes in more than 20% of total income and as a result the Social Security
payroll tax hits only about 83% of their total income. The tax should go back to
covering 90% of income. That would mean the ceiling on income subject to the
Social Security tax would need to be raised to $180,000.
•
Social
Security should be strengthened in ways that increase the retirement security
of people in middle-and working-class. Particular attention should be paid to
improving the living standards in retirement of workers in poorly compensated
jobs, who typically have little or no retirement savings outside of Social
Security. The average Social Security benefit of $14,000 is only about
30% above the poverty line. Indeed, 21% of Social Security beneficiaries
receive Social Security benefits that fall below the poverty line. In 2011, the Commission to Modernize Social
Security
proposed increasing benefits for all retirees by a uniform amount equal to 5%
of the average benefit, about a $700 annual increase for beneficiaries today;
that workers who have worked at least 30 years should receive benefits equal to
125% of the poverty threshold when they retire at the full retirement;
providing at least five years of dependent care credits through Social
Security as women (and some men) spend part of their working years caring for
children and elderly parents; reinstating the post-secondary student benefit
that existed until 1983 and allowed students who were receiving Social Security
due to a parent’s death, disability, or retirement to continue until they were
22 years old if they were in college; and increasing the survivor’s benefit for
widowed spouses to ensure that they receive at least 75% of the benefit amount
they received when their spouse was still alive.
Improving Medicare and Expanding it to Provide Health
Care to All in the United States
•
Former
Labor Secretary Robert Reich writes “Medicare isn’t the nation’s
budgetary problems. It’s the solution. The real problem is the soaring costs of
health care that lie beneath Medicare. They’re costs all of us are bearing in
the form of soaring premiums, co-payments, and deductibles. Medicare offers a
means of reducing these costs.”
•
Medicare
bears the burdens of existing within an insurance-based health care that fails
to control costs and creates tremendous bureaucracy. While there are
short-term fixes to Medicare, what is needed is an end to the current
insurance-based approach. The United States spends the most per capita per year
on health care yet a third of the population is either uninsured or
underinsured so that they face financial ruin if a serious accident or illness
occurs. Health care spending in the U.S. is rising 2.5% faster than GDP.
•
Expanding
and improving Medicare so it covers all in the United States is a key component
to controlling health care costs and government spending; as well as ending the
deficit problem of state and federal budgets. Estimates of how much would be
saved on administrative costs alone by extending Medicare to cover the entire
population range up to $400 billion a year. This savings plus the inherent
cost-controls of a single payer health system would offset the cost of
providing everyone in the United States with access to lifelong, comprehensive,
quality health care. Controlling health care costs would sharply reduce the
long-term budget crisis, as well as foreclosures and bankruptcy.
•
Even
without improving and expanding Medicare to cover all, the program is not in
crisis. The Medicare Trustees say that the program faces a modest
shortfall over its 75-year planning horizon. The projected shortfall is around
0.3% of GDP or less than one-fifth of the amount that annual military spending
was increased since September 11th, 2000.
•
Economist
Jack
Rasmus points
out that all it takes to cover the Medicare
shortfall is
a mere 0.25% increase in the Medicare share of the payroll tax for the next ten
years and another 0.25% starting in the eleventh year. The Medicare tax rate is
currently 2.9% for the employee and the employer. These tiny tax
increases would make Medicare secure.
•
In
fact, the Congressional Budget Office (CBO) calculates that the Medicare system
in its current form is far more efficient than the privatized system advocated
by a bi-partisan consensus of political elites. CBO’s projections show that switching from Medicare to a
privatized system would add $34 trillion to the cost of buying Medicare
equivalent policies over the program’s 75-year planning period.
•
Medicare
provides efficiency. Reich reports: “Medicare’s administrative costs
are in the range of 3%. That’s well below the 5% to 10% costs borne by large
companies that self-insure. It’s even further below the administrative costs of
companies in the small-group market (amounting to 25% to 27% of premiums). And
it’s way, way lower than the administrative costs of individual insurance
(40%). It’s even far below the 11% costs of private plans under Medicare
Advantage, the current private-insurance option under Medicare.”
Democratizing the Economy, Shifting Economic Power,
Wealth and Ownership to all Citizens in the United States
Big finance corporate capitalism is failing. It is
concentrating ownership and wealth as well as domination of the economy in the
wealthiest Americans. New approaches are needed to share wealth, ownership and
economic power more fairly. The grass roots protests, whether from the Occupy
Movement or the anger from the conservative Tea Party, are based on the same
realities: economic insecurity and economic unfairness. A full discussion of
these issues is beyond the scope of this report but it is time for the people
of the United States to be asking critical questions:
•
What is
the next evolution of the economy?
•
What
can be done to reduce economic insecurity and economic unfairness?
•
How can
it be reshaped so that people gain greater control of their lives and greater
influence over the economy?
•
What
new forms of ownership can be developed to shift economic power to the people?
The answers to these questions lie in the conflict of
our era – participatory democracy vs. concentrated wealth. There is growing
evidence and experience that shows a democratized economy is the fairest, most
sustainable and effective approach which results in a shared prosperity.
Democratizing the economy would move the United States away
from concentrated corporate capitalism and create an economy in which wealth is
more equitably shared. This change is already happening under the
radar of U.S. media coverage. A democratized economy already has a foothold in the United States. There is a lot
of experimentation going on regarding worker ownership, democracy in the work place and sharing in the profits of
corporations; with communities working together to control development through non-profit land trusts; with public banking, democratizing money and community
banks; with
public utilities and democratizing energy; and with participatory budgeting. These are a few examples of
the democratization of the economy that is building a new economic model of
more widespread ownership of assets and participation and wealth. As one
of the witnesses of the Occupied Super Committee, Gar Alperovitz writes:
“Over the last three decades, for instance, more workers
have become owners of their own companies than are members of unions in the
private sector; indeed, 5 million more. Simultaneously, there has been
increasing experimentation with unions within such firms, and with new ways to
increase participation and control. There are also more than 4,500 nonprofit
community development corporations that operate affordable housing and other
neighborhood programs. Approximately 130 million Americans are members of
co-ops. In Cleveland, an innovative group of linked cooperatives has set new
standards for community-building economic change. ‘Social enterprises’ are developing
in communities throughout the nation that transform the ownership of capital
into businesses, the sole purpose of which is to provide community services.
One form of new ownership is cooperatives. There are 130
million Americans who are members of some types of co-ops, most commonly credit unions. Another widely shared
experience is joint-ownership is Employee Stock Ownership Plans (ESOPs) which give employees
ownership of companies through stocks, while these do not usually include
management by employees they do provide a share of the profit. There are
more than 13 million people who are part of ESOPs – meaning
there are more employee stock owners than there are members of private unions.
Worker-owned co-ops go further and give workers a say in the management of the
company. Worker owned co-ops are at the cutting edge of democratizing the
economy and provide some of what we need to transform the economy.”
At a national level, despite comments of some in the
corporate media and some elected officials who speak for big business
interests, the truth is that national programs like Social Security and
Medicare have worked well. As described in previous sections of this
report, these programs can be improved and expanded but they are also models on
which to create programs that respond to national needs. Further, the
bail out of the automobile industry, which included some public ownership, has
succeeded in saving that industry and returning it to profit. However,
more could have been done to serve the public good by continuing public
representation on the boards of automobile companies, requiring taxpayers share
in the profit as investors and directing those industries to build mass transit
and create jobs.
The Occupy Movement seeks a radical transformation to a
new economy and political system. A close examination of what is
happening in the United States shows that this transformation is already
underway.
The Lessons of the Super Committee: Corruption Rules
Dysfunctional Government
The proposals in this report show that it would not be
difficult for the so-called “Super Committee” to achieve the requirement of at
least $1.2 trillion in savings over the next decade. And, that it can be done
in a way that corrects wealth disparity and re-starts the economy. But, in many
ways, the super committee is “occupied” by corporate interests and cannot act
for the people. The make-up of the committee and the tens of millions of
dollars members have received from entrenched corporate interests ensure that
the committee will exemplify the corruption in Congress – which is why people
are occupying public spaces across the country.
The Occupation of Washington, DC at Freedom Plaza
expects the commission’s recommendations, if they are able to make
recommendations, to reflect the interests of their donors. We urge the
public and the media to review their recommendations with these political
donations in mind.
The twelve Members of the Joint Committee on Deficit
Reduction have received $41 million from the
financial sector
during their time in Congress, according to a report by Public Campaign and
National People’s Action, “Wall Street and the Supercommittee:
The $41 Million Question.” At least 27 current or former aides for the “super committee”
members have lobbied on behalf of financial firms.
•
The 12
members of the super committee have received at least $41 million from the
finance, insurance, and real estate (FIRE) sector during their time in
Congress.
•
They
have received nearly $900,000 from three of the top U.S. banks—JPMorgan Chase,
Bank of America, and Wells Fargo
•
Since
2000, the industry has spent over $4 billion lobbying elected officials.
•
Nearly
30 former aides to the 12 members work as lobbyists for financial industry
interests.
Club for Growth $990,066
Microsoft Corp. $810,100
University
of California $629,495
Goldman Sachs $592,684
EMILY’s List $586,835
Citigroup
Inc. $561,081
JPMorgan Chase & Co. $494,316
Bank of America $349,566
Skadden,
Arps, et al. $347,356
General Electric $340,935
The largest donor, the Club for Growth, opposes any new
taxes on the wealthiest in the United States. As a result, despite the
abhorrent wealth divide, the committee is unlikely to recommend the obvious,
fair taxes on the wealthiest people who fund their campaigns.
The members of the committee received more than $3 million total during the past five years in
donations from political committees with ties to weapons contractors, health
care providers and labor unions. They received more than $1 million overall in
contributions from the health care industry and at least $700,000 from weapons
companies. This presents a problem for the super committee because if they fail
to find $1.2 trillion in savings over the next decade it will result to
mandatory cuts that will impact health care and weapons makers. This
means the committee is likely to make a bad deal for the United States, in
order to avoid cuts to their major donors.
Throughout the time when the committee has been meeting
they have been holding fundraisers across the country. This open money-taking while
making decisions that affect those who are giving money is the kind of open
corruption that has led to a loss of faith in government.
It is not only donations that will impact the committee,
but a major lobbying onslaught by 400 groups who report lobbying the Super Committee. About 30%
of these organizations — 118 groups in total – were from the health
sector. The finance insurance and real estate
sector ranked
third, with 40 companies within that sector reporting lobbying activity during
the third quarter that targeted the super committee. And 39 groups in the energy sector reported lobbying the super
committee. Both the communications and electronics sector and the general business sector saw 26 companies and organizations
explicitly mention the super committee in their third-quarter lobbying reports.
These are many of the same concentrated corporate interests that have funded
the campaigns of super committee members.
Conclusion: Revolt against Economics for the 1%
Once again, the people of the United States will see
corruption reign supreme. Despite evident solutions to the deficit and
the economic collapse, the Congress will show its corruption and dysfunction
and be unable to put forward real solutions.
We issue this report to alert everyone – the political
system is broken. It is corrupted by the power of concentrated wealth,
campaign donations and corporate power. The job of the occupations across
the country is to build an independent nonviolent movement that replaces this
corrupt system with one in which the people rule. The battle between
concentrated wealth and participatory democracy will be heightened by the
evident corruption of the Super Committee which will not challenge the unfair
policies of the 1% while requiring austerity for the 99%.
The economic and political elite should expect protests
to grow. We are at the beginning of what will be seen as a historic revolt
against status quo elites that will transform this economy as well as how the
United States is governed.
[1] The evidence-based solutions in this
report come from people who are experts in the fields addressed as well as the
views of people affected by the policies. We relied on a range of sources
and have provided links to those sources in the on-line version of this report.
In addition, Occupy Washington, DC held a public hearing on Wednesday, November
9th. You can see the public hearing at: CSPAN Coverage of Occupied Super
Committee Hearings. Participants included: Kevin Zeese an organizer of Occupy Washington, DC and co-director of It’s Our Economy and co-chair of Come
Home America;
Andrew Fieldhouse of the Economic Policy Institute; Carl Conetta of the Project on Defense Alternatives; Kenneth Peres is an economist with
the Communications
Workers of America; Dean Baker of the Center for Economic and Policy
Research;
Margaret Flowers an organizer of Occupy Washington DC and congressional fellow for Physicians for National Health
Program; Gar
Alperovitz is a founding principal of the Democracy Collaborative and with the National Center for Economic and
Security Alternatives.
[2] This is commonly known as corporate
welfare. All corporate welfare should be stopped until the Congress
passes laws transforming corporate welfare into taxpayer investment.
There are reasons for government to invest in building the economy, for example
there is a need to invest in a new energy economy, but the profits from these
investments should not only go to the 1% who own energy companies, they should
be treated as taxpayer investment and all taxpayers should share in the profit
from the investment. Such a system could be modeled after the Alaska
Permanent Trust which has existed for oil exploration on state lands in Alaska
since 1980. Such a system could develop into a guaranteed national income
that would lift people out of poverty and provide a safety net to all.
This is a critical part of a democratized economy. See: Agenda for a
Democratized Economy, http://itsoureconomy.us/issues/.
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