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The next item on the agenda is filibuster reform. The filibuster rule must change. Hopefully Democrats will insist on a rule where a senator must talk in order to filibuster anything. Only if the filibuster seen in “Mr. Smith goes to Washington” is implemented will the filibuster truly be reformed.

Following filibuster reform one comes to the debt ceiling – sequester issues. I hope that Pres. Obama takes action to deal with the debt ceiling immediately. The action I recommend is to start deciding what parts of the executive branch will be shut down once the debt ceiling is reached. For example, he could shut down funding for research including our national laboratories, NIH. NIST, NSF, . . . The executive branch should also shut down the passport service. Next the executive branch should release all illegal aliens waiting for deportation and stop deporting illegal aliens. The drug enforcement agency should be shut down. The weather service should be shut down. The departments of education and interior should be shut down. Gitmo should be shut down. Non-violent criminals should be released from federal prison. . .. The safety net should continue to be funded including food stamps Social Security, Medicare and Medicaid. The debt ceiling gives the president tremendous power to decide what will remain open and what will be closed. He should use that power. In order to get a bargain the president should inform the public how he is going to use that power. The Pres. should insist that the debt ceiling be raised for the entire four years of his term in office.

So how should the president deal with the sequester? First, the president should remove Social Security, Medicare and Medicaid from the discussion. Second, the president needs to make clear that the current deficit problem is due to high unemployment and people dropping off the unemployment rolls because they cannot find jobs. The lack of jobs is due to a lack of demand. The lack of demand is fueled by austerity measures in state and local governments as well as working force income not keeping up with increases in productivity. To deal with unemployment the president should ask for $1 trillion. 500 billion of the dollars will be given to the states to pay for state and local government employees such as teachers and firefighters. Some of the money may be used to pay for state infrastructure. The other $500 billion should be used to pay for national infrastructure including subways, road repair, electrical grid, universities, and research centers.

The president should acknowledge that there is a salary problem in the US. To deal with this we need legislation getting rid of right to work laws in the states and enabling workers to form unions more easily. Further, we must modify trade agreements so that workers are paid more in foreign countries. Next, we must deal with, countries that artificially deflate the value of their currency. Finally, we must pass a law increasing the taxes on companies that do not increase worker salaries in proportion to increases in productivity.

The president should acknowledge that there is a long term deficit problem. He should propose to deal with the deficit caused by Social Security by removing the payroll tax cap. Once this is done we can increase the amount given for Social Security and lower the age for receiving the maximum amount of Social Security. The president should acknowledge the long-term deficit problem with Medicare and Medicaid. He should make clear that those problems are due to a general problem of rising healthcare costs. To deal with this problem he should offer two solutions. First, a private insurance solution consisting of 1) low administrative costs of less than 10%; 2) a fixed profit rate no higher than 2% above the prime interest rate; and 3) an option to join the federal employees health insurance program. Second, the president should offer a single payer or Medicare for all solution. As VP Biden would say this would truly be “a big fucking deal.”

Finally, the president should acknowledge that there is a tax problem. He should propose that capital gains and dividends be taxed at the same rate as other income. He should propose that the marginal rate for income between $250,000 and $500,000 be increased to 40%. The marginal rate on income between $500,000 and $1 million should be increased to 45%. The marginal rate on income between the million dollars and $10 million should be increased to 50%. The marginal rate on income above $10 million should be set at 55%. Alternatively the president should offer a wealth tax on wealth above $10 million. That tax would be 1%. Such a tax structure combined with reducing defense spending would guarantee surpluses to pay down the debt for the foreseeable future.

Now rgua would be a place to start negotiating.

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