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Rep. Alan Grayson Introduces the "War Is Making You Poor" Act

The bill would cut the DoD's budget and use that money to make the first $35,000 each American earns tax-free.

Last week, as Congress prepared to pass yet another “emergency” spending bill to cover America’s costly operations in Iraq and Afghanistan -- to the tune of $159 billion this time around -- Rep. Alan Grayson, D-Florida, introduced a bill that would force the Pentagon to pick up the tab out of its ample regular budget.   

The War Is Making You Poor Act is elegant in its simplicity. Instead of financing these longstanding conflicts outside of the regular budgeting process, where they’re not factored into deficit projections, Grayson’s bill would make the DoD work within its means, and the money would instead be used for an across-the-board tax cut that would make the first $35,000 each American earns tax-free. ( You can go here to tell Congress that you support the War Is Making You Poor Act.)

“The purpose of this bill,”  wrote Grayson last week, “is to connect the dots, and to show people in a real and concrete way the cost of these endless wars.” It’s not just the costs of active shooting wars; with hundreds of bases overseas, as far as the defense budget is concerned Americans have been on a permanent wartime footing, to varying degrees, since Pearl Harbor was attacked in 1941. “War is a permanent feature of our societal landscape,” wrote Grayson, “so much so that no one notices it anymore.” 

The bill already has several co-sponsors, including at least two Republicans (albeit maverick GOPers Ron Paul of Texas and Walter Jones of North Carolina). But since the Pentagon would have to take money out of its regular budget -- largely from the budget for newfangled hardware -- the DoD and influential defense contractors will no doubt fight it tooth-and-nail.  

But the War Is Making You Poor Act might have a major impact on our national dialogue regardless. It highlights in a visceral way what Americans lose by privileging money for guns over butter. “The costs of the war have been rendered invisible,” wrote Grayson. “There's no draft. Instead, we take the most vulnerable elements of our population, and give them a choice between unemployment and missile fodder. Government deficits conceal the need to pay in cash for the war.” Grayson’s measure might just shine a bright light on those “opportunity costs.”  

Budgeting is all about priorities, and the bill can raise public awareness of that fact. The Right has done a remarkable job convincing the American public that tax dollars used for programs that help the middle class or the poor are dollars “taken out of your pocket,” but no such consideration is given to the trillions spent on financing our military operations.  

That was apparent during the recent debate over the Affordable Care Act, when Republicans, Blue Dog Democrats and most of the media focused relentlessly on the costs of the bill, and its likely impact on future deficits. No such discussion took place when the invasion of Iraq was being debated. Grayson’s bill makes the same appeal to self-interest the conservatives have used to often devastating effect to oppose everything from Medicare to public education. It says: "We can pay for these wars, or we can make them take it out of the defense contractors’ hides and get our first $35K tax-free."

There’s never been a better time to educate the public about the opportunity costs of war. Virtually every mainstream voice in this country -- from Obama to the most conservative Republican to the editorial board of the New York Times -- seems to agree that we have to address our “entitlement crisis” or face budgetary doom. It’s true that if health care spending isn’t controlled, Medicare and Medicaid face very serious long-term deficits (while Social Security does not), and Americans will continue to hear all about the costs of those programs from every talking head on cable news. But far fewer will hear the perspective of economist Robert Higgs. Noting that we’re still effectively paying interest on every conflict we’ve fought since World War I, Higgs decided to see how much of our long-term public debt had accrued from unfunded conflicts in our past. He wrote: