The Globe asked both US Senate candidates to answer three detailed questions on how to reduce the deficit. Below is the response from Elizabeth Warren’s campaign.
I believe that our nation’s budget must be aligned with our goals and values as a country. Our nation went from a projected record surplus in 2000 to record deficits in 2010, and the current budgetary situation is largely a function of four factors: the Bush tax cuts, the wars in Iraq and Afghanistan, the aftermath of the 2008 financial crisis, and interest payments on the national debt.
Our first response should be to change the policies that got us here in the first place: end the Bush tax cuts on people earning more than $250,000; end the war in Afghanistan; and take steps to make sure Wall Street can never again bring our economy to its knees. The best way to decrease the deficit is get Americans back to work.
1) Please cite five substantive things you would do to cut the budget deficit in a significant way. Please be as specific as possible. For example, if you are suggesting “cutting government waste,” please list the specific programs you would cut and the amount of savings that would generate. If you are suggesting closing tax loopholes, please list the actual loopholes, along with the estimated savings.
First, do not extend the Bush tax cuts on those earning more than $250,000 and return the estate tax rates to the 2009 level. This would save $968 billion over ten years.
Second, end the subsidies given to some of the most profitable companies in the world – big oil and gas. This would save $41 billion over ten years. And end the special carried interest tax break for those working at hedge funds, which allows them to pay a far lower rate than most Americans. This would save $13 billion over ten years.
Third, eliminate agriculture subsidy payments made directly to producers. This would save $23 billion over a decade.
Fourth, pass the Buffett rule so that billionaires are not paying a lower tax rate than their secretaries. This would increase revenue by $46.7 billion over ten years.
Fifth, cut waste and duplication with measures big and small, such as, streamlining the government’s use of information technology. By reducing duplicative spending, increasing productivity, and lowering the cost of operations, efforts to optimize data centers are expected to yield between $3 billion and $5 billion in savings. Sell or otherwise get rid of unnecessary federal government properties. This is projected to save $4 billion over 10 years. And reduce waste in health care spending. Don Berwick, the former Administrator of the Centers for Medicare and Medicaid Services, has recently estimated the cost of health care waste to Medicare and Medicaid at between $197 and $402 billion for 2011.
And finally, we should end the war in Afghanistan. As of last year, Pentagon estimates had the cost of the war at $2 billion per week.
2) Most independent deficit analysts say entitlement projected spending will need to be reduced to solve the budget deficit. Which programs would you cut, and what cuts would you make? If you decline to cut entitlements, where would you find the savings?
Under the proposal outlined above, we will save billions of dollars over the next decade. We should start there before we even consider breaking the promises we made to our seniors. It would be a breach of trust—and just plain poor economic policy—to jeopardize these programs with unnecessary cuts or risky privatization schemes, especially when the wealthy and well-connected continue to enjoy special tax deals.
Too many have been using scare tactics when it comes to Social Security. Social Security can pay 100% of benefits for at least the next 20 years. Instead of taking on special interests, too many politicians have proposed privatizing Medicare, turning it into a voucher program, or cutting it altogether. Cutting Medicare won’t keep people from getting sick or having heart attacks. Regardless of what Washington does, people will need care. Pushing those costs off to families doesn’t change the basic calculation, and it certainly won’t cut overall health care costs. I will not support privatizing Medicare, turning it into a voucher program, or cutting benefits.
The real issue here is the rising cost of health care that is squeezing working families all across Massachusetts—the same costs that contribute to roughly half of all bankruptcies. The solution isn’t to cut Medicare and bankrupt more families. Instead, we need to cut health care costs across the board, and do so in a way that improves quality. The Affordable Care Act starts this process by streamlining our health care delivery system and making it more efficient. It also funds the research needed to find more ways to deliver better health outcomes for lower total costs. For example, a recent study from Children’s Hospital showed that the Hospital’s Community Asthma Initiative saved money while improving health for asthmatics. By making sure patients correctly took their medicines and providing them with vacuum cleaners, health workers reduced the number of asthma-related emergency room visits for kids by 68%, and the number of hospitalizations by 85% -- and in the process, they saved $1.46 in hospital care for every $1 spent on prevention. Although the Affordable Care Act did not fund this particular study, the study shows that we can reduce health care costs while achieving better outcomes.
3) Most independent deficit analysts say net revenues would also need to be raised. Which revenues would you raise, specifically, and how much do you expect that would raise? If you decline to raise revenues, what credible substitute would you offer?