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Working In These Times

Tuesday, Apr 19, 2011, 10:43 am

Labor Looks Behind Obama’s Budget Pitch, Finds Risky Policies

BY Roger Bybee

President Barack Obama speaks on fiscal policy April 13, 2011, in Washington, DC. Obama met key congressional leaders ahead of the showpiece speech on his vision for constraining the fiscal gap.   (NGAN/AFP/Getty Images)

President Obama’s big budget speech last Wednesday was the first time since his election that I can recall him showing any serious recognition of the savage inequality dividing American society.

At some moments, Obama explicitly spotlighted the greedy and hammered away at provisions in House Budget Committee Chairman Paul Ryan's (R-WI) utterly regressive deficit-fighting plan:

In the last decade, the average income of the bottom 90 percent of all working Americans actually declined. Meanwhile, the top 1 percent saw their income rise by an average of more than a quarter of a million dollars each.

That’s who needs to pay less taxes? They want to give people like me a $200,000 tax cut that’s paid for by asking 33 seniors each to pay $6,000 more in health costs. That’s not right. And it’s not going to happen as long as I’m President. 

After more than two years of Obama repeatedly conceding so much ground to the Republicans and deeply disillusioning his own base, my initial reaction was emotional catharsis. But many labor and progressive observers, while agreeing wholeheartedly with Obama’s belated statement of a coherent political philosophy, immediately spotted huge problems with the policy directions outlined in his proposed deficit reduction plan.

FOCUS ON BUDGET DEFICIT, NOT JOBS DEFICIT

In particular, the ranks of the outraged includes AFL-CIO leaders, which are infuriated with Obama’s emphasis on deficit-cutting rather than job creation.They see Obama accepting too many of the conservative assumptions of the budget hawks and believe that, while proclaiming that he will protect Social Security and Medicare, he is undermining his own position.

With this and other issues as the backdrop, Trumka was unusually critical of President Obama in his appearance on MSNBC's Andrea Mitchell Reports, noted Ben Smith of Politico. Trumka criticized what he and others have viewed as Obama's failure to align his philosophy with a consistent program that would prioritize job creation and lift the nation out of its feeble economic  “recovery.”

Instead, Trumka saw a capitulation to a senseless debt-elimination preoccupation that threatens to create a double-dip recession by cutting off crucial government spending. Trumka declared firmly that the President's budget plan had "too much cuts, not enough revenue."

He also stressed, “The labor movement is an independent voice for workers. We're always going to try to fight and voice our concerns over what's happening and to try to prioritze kitchen table issues."

NEW TRADE DEALS BETRAY OBAMA'S CAMPAIGN SPEECHES

Further, Trumka expressed disgust with the administration’s call for the Colombian free trade deal, because its elites have presided over the deaths of some 2,500 union leaders in recent years:

The Colombian trade bill, for instance, it's outrageous. Fifty-one labor leaders were assinated last year. They either lacked the will or they lacked the ability to protect trade unions.

The AFL-CIO president also mocked the one-sided portrayal of the South Korean trade deal, known widely as KORUS, by its avid backers throughout the Obama administration:

The Korean trade bill...is going to cost this country another 150-160 thousand jobs. When you say to somebody that the Korean trade agreement is gonna create 75,000 jobs, that's like saying the score of the Superbowl was 'Pittsburgh 25.' When you net it out, we're going to lose jobs.

Obama's budget plans were scrutinized by the respected director of the Center on Budget and Policy Priorities, Robert Greenstein, who ignored Obama's comforting rhetoric and focused squarely on the plan's implications. 

While positive about Obama inserting tax breaks and defense into the argument over government spending, Greenstein notes the similarity between Obama's plan and the utterly reactionary plan hatched by Erskine Bowles and Alan Simpson, chairs of what rightly has been disparaged as the "Catfood Commission" because their attacks on Social Security and Medicare would certainly result in renewed, severe poverty for seniors.

“First, like the plan of his fiscal commission (the Bowles-Simpson plan), the President’s plan takes two-thirds of its deficit reduction from budget cuts and one-third from revenue increases,” Greenstein stated.

With budget cuts of this scale, Obama's policy of self-deluding budget "centrism" could help to choke off the recovery—and his re-election chances, if a recovery doesn't materialize.

RECOVERY DEPENDS ON MORE ECONOMIC FAIRNESS

Already, Americans are anxious, restless and at the end of their financial ropes amidst continuing wage cutting and the downgrading of jobs from middle-class security. Yet Obama fails to address the need for a fairer distribution of income needed not only for justice, but to sustain the recovery, as Robert Reich argues persuasively:

By focusing the public's attention on the budget deficit, the president is still playing on the Republican's field. By advancing his own "twelve year plan" for reducing it -- without talking about the economy's underlying problem -- he appears to validate their big lie that reducing the deficit is the key to future prosperity.

The underlying problem isn't the budget deficit. It's that so much income and wealth are going to the top that most Americans don't have the purchasing power to sustain a strong recovery.

The underlying problem isn’t the budget deficit. It’s that so much income and wealth are going to the top that most Americans don’t have the purchasing power to sustain a strong recovery.

By focusing the public’s attention on the budget deficit, the President is still playing on the Republican’s field. By advancing his own “twelve year plan” for reducing it – without talking about the economy’s underlying problem – he appears to validate their big lie that reducing the deficit is the key to future prosperity.

The underlying problem isn’t the budget deficit. It’s that so much income and wealth are going to the top that most Americans don’t have the purchasing power to sustain a strong recovery.

By focusing the public’s attention on the budget deficit, the President is still playing on the Republican’s field. By advancing his own “twelve year plan” for reducing it – without talking about the economy’s underlying problem – he appears to validate their big lie that reducing the deficit is the key to future prosperity.

The underlying problem isn’t the budget deficit. It’s that so much income and wealth are going to the top that most Americans don’t have the purchasing power to sustain a strong recovery.

By focusing the public’s attention on the budget deficit, the President is still playing on the Republican’s field. By advancing his own “twelve year plan” for reducing it – without talking about the economy’s underlying problem – he appears to validate their big lie that reducing the deficit is the key to future prosperity.

The underlying problem isn’t the budget deficit. It’s that so much income and wealth are going to the top that most Americans don’t have the purchasing power to sustain a strong recovery.

By focusing the public’s attention on the budget deficit, the President is still playing on the Republican’s field. By advancing his own “twelve year plan” for reducing it – without talking about the economy’s underlying problem – he appears to validate their big lie that reducing the deficit is the key to future prosperity.

The underlying problem isn’t the budget deficit. It’s that so much income and wealth are going to the top that most Americans don’t have the purchasing power to sustain a strong recovery.

By focusing the public’s attention on the budget deficit, the President is still playing on the Republican’s field. By advancing his own “twelve year plan” for reducing it – without talking about the economy’s underlying problem – he appears to validate their big lie that reducing the deficit is the key to future prosperity.

The underlying problem isn’t the budget deficit. It’s that so much income and wealth are going to the top that most Americans don’t have the purchasing power to sustain a strong recovery.

By focusing the public’s attention on the budget deficit, the President is still playing on the Republican’s field. By advancing his own “twelve year plan” for reducing it – without talking about the economy’s underlying problem – he appears to validate their big lie that reducing the deficit is the key to future prosperity.

The underlying problem isn’t the budget deficit. It’s that so much income and wealth are going to the top that most Americans don’t have the purchasing power to sustain a strong recovery.

Writing in Alternet, Joshua Holland perfectly captured the dangerous sleight-of-hand maneuver in Obama's budget speech:

By focusing the public’s attention on the budget deficit, the President is still playing on the Republican’s field. By advancing his own “twelve year plan” for reducing it – without talking about the economy’s underlying problem – he appears to validate their big lie that reducing the deficit is the key to future prosperity.

The underlying problem isn’t the budget deficit. It’s that so much income and wealth are going to the top that most Americans don’t have the purchasing power to sustain a strong recovery.Writing in Alternet, Joshua Holland perfectly captured the underlying dangers to workers and the economy contained in the Obama speech:

In tone, the speech was classic Obama – reasonable, informed and seductive to a degree that one might forget that we're debating to what degree we're going to put the brakes on this tenuous, jobless economic recovery. But that is what we're debating.

Even the very moderate cuts agreed to last week will cost the economy about 400,000 jobs, according to models developed by Moody's chief economist Mark Zandi. Nobel laureate Joe Stiglitz called the Simpson-Bowles recommendations – several of which Obama embraced in his speech – a “suicide pact.” He predicted that it would cost the economy millions of jobs.

Roger Bybee is a Milwaukee-based freelance writer and University of Illinois visiting professor in Labor Education. Roger's work has appeared in numerous national publications, including Z magazine, Dollars & Sense, The Progressive, Progressive Populist, Huffington Post, The American Prospect, Yes! and Foreign Policy in Focus. More of his work can be found at zcommunications.org/zspace/rogerdbybee.

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