The Nov. 10 preliminary report from the federal budget deficit commission “tells working Americans to ‘Drop Dead,'” according to Richard Trumka, the president of the United States’ largest labor federation, the AFL-CIO.
“It is unconscionable to be proposing cuts to the critical economic lifelines for working people, Social Security and Medicare.”
Trumka rejected even the idea that the commission’s preliminary report, prepared by co-chairs Alan Simpson and Erskine Bowles, is just a “starting point.”
“Let me be clear,” Trumka said. “It is not.”
The report calls for deep spending cuts in programs considered vital by labor and its allies, reduced Social Security benefits, a higher retirement age, tax code changes, including reduced corporate tax rates and lower tax rates for the wealthy, along with tax cuts for middle and low income workers.
It also calls for a 10 percent cut in the Pentagon budget, historically a sacred cow to lawmakers. None of the military spending for the two deficit-feeding wars in Afghanistan and Iraq is included, however.
“The report shows the commission is running severely off the track,” declared John Irons, policy director at the Economic Policy Institute. “Nearly half of the adjustments come from cuts to discretionary spending – a portion of the budget that is not responsible for long-term deficits. The suggested reductions include a wide range of cuts that would cost jobs and increase financial burdens on working families.”
Irons said a major flaw in the report is that, ignoring high unemployment and the expectation that jobless rates will remain high for several years, it initiates huge spending cuts in 2012.
“It does not allow enough time for the economy to recover, nor does it call for the policies necessary to get the economy back on track,” he said. “The spending reduction of over $68 billion in 2012, ramping up to $140 billion in 2015, would mean a slower economy and higher unemployment for an already weakened labor market.”
The labor movement is saying that a serious effort to fix the economy requires a focus, instead, on eliminating what it says is the real deficit in the country – the jobs deficit.
“Working families already paid for the Wall Street’s party that tanked our economy,” Trumka said. “If we actually want to address our economic problems, we need to end tax breaks that send American jobs overseas and invest in creating jobs by rebuilding our crumbling infrastructure and green technologies.”
The commission’s final report, due Dec. 1, must be approved by 14 of the 18 commission members. If it is, it will go to Congress for a vote before the end of the year.
As it stands, the report may not get the support of 14 commission members. House Speaker, Nancy Pelosi joined opposition voiced by several commission members Nov. 10 and called the plan “unacceptable.”
“This is not a package that I could support,” said commission member Rep. Jan Schakowsky, an Illinois Democrat. “Seniors have spent their working lives paying for these benefits and we owe them what was promised. Worsening the situation, the co-chairs propose to increase out-of-pocket costs for Medicare beneficiaries who already spend more than 30 percent of their income on health care. The gap between rich and poor has never been greater in our country. These proposals will only make the situation worse.”
Sen. Bernie Sanders, I-Vt., said “It is reprehensible to ask working people, including many who do physically-demanding labor, to work until they are 69 years of age. As they compete for jobs with 25-year-olds, many older workers will go unemployed and have virtually no income.”
Sanders called upon the American people to “vigorously oppose the Simpson-Bowles deficit reduction plan. The huge increase in the national debt in recent years was caused by two unpaid wars, tax breaks for the wealthy, a Medicare prescription drug bill written by the pharmaceutical industry, and the Wall Street bailout. Unlike Social Security, none of these proposals was paid for.”