Since I started writing for the Independent Weekly in January, three issues have garnered much of my attention: the misleading and counterproductive national conversation we’ve been having about deficits, the declining economic fortunes of many Americans and the weakening of meaningful representation in our political system.
The debt ceiling deal consummated last week by the president and Congress is a depressing encapsulation of all of those problems. To briefly recap the deal: It includes an initial agreement to cut roughly $900 billion from the federal budget over 10 years with the promise to cut an additional $1.5 trillion over that same period. That additional $1.5 trillion in cuts is to be negotiated by a “super congress” comprising six Democrats and six Republicans.
If, as many observers believe may happen, the super congress deadlocks on a framework for the further cuts, so-called triggers kick in to automatically cut an additional $1.5 trillion from the budget. One noteworthy aspect of the arrangement is that a significant proportion of the cuts, both the initial ones and the automatically triggered subsequent reductions, will come from the “security” budget, including the Pentagon. This stipulation is meant to ensure that the GOP members of the super congress will be forced to seriously consider raising some taxes to forestall cuts in military spending.
Social Security, Medicaid and Medicare benefits are exempted from the short-term cuts and the long-term triggered cuts, though the super congress could agree to reductions in those programs (which would then have to pass both houses of Congress and meet with the president’s approval). The protectionfor nowof those big programs, and the fact that the majority of the initial cuts don’t kick in until 2013–2014, have led many liberal and progressive commentators to argue that, while this deal is not great, it’s not quite as bad as it first appeared. Nonetheless, House Speaker John Boehner said after the deal’s approval that he got 98 percent of what he wanted.
But the deal remains deeply problematic. The agreement failed to include either an extension of a “holiday” on payroll taxes for workers or unemployment benefits, and the overall reduction in spending will only worsen the bleak economic picture, depressing further already very weak demand. In fact, on the day the Senate passed the debt ceiling deal last week, new economic data revealed that manufacturing was at its lowest levels in two years. Economic growth in the first half of 2011 had been revised downward to an anemic 1 percent on an annualized basis, and consumer spending fell for the first time in 20 months. According to economists at JPMorgan Chase and Deutsche Bank Securities, the combination of the immediate cuts in the debt ceiling deal and the exhaustion of the remaining stimulus funds could drag down growth in 2012 by as much as 1.5 percent, enough perhaps to throw us into another official recession.
And while many liberals are comforting themselves with the thought that “defense” comes in for significant cuts, so do education, job training, air traffic control, health research, border security, physical infrastructure, environmental and consumer protection, child care, nutrition, law enforcement and so on.
If there were real concern about our long-term deficitsand virtually everyone agrees that we do need to address them at some pointwe would focus on the main causes of the long-term deficit. No. 1 on that list is health care costs, which are astronomical in the United States compared with all other wealthy countries. The debt ceiling legislation, of course, has nothing to say about that. Additionally, the disappearance of jobs from the public discourse over the past few months isn’t just a disaster in human and moral terms. It’s entirely counterproductive to the goal of deficit reduction, since a large proportion of our deficits in the past three years derive from the downturn, mass unemployment, the subsequent hit to our tax base and our greater reliance on social safety net programs to ameliorate the effects of the downturn.
One might suppose that the focus on deficits and debts was a response to popular demands for austerity. The evidence, however, simply doesn’t bear out that supposition. One recent poll, conducted jointly by leading Democratic and Republican pollsters, found that 67 percent of Americans surveyed think Washington should focus on job creation, while only 29 percent said the focus should be on deficits. A wide range of polls have asked Americans what they consider to be the No. 1 priority for political action right now. Typically, between 40–60 percent of Americans say jobs should be the top concern, while deficits typically garner less than half that support. These findings are especially noteworthy since there has been a relentless tide of news stories, commentary and political speechifying in the past six months about the imminent peril of our deficits, while jobs have garnered very little attention.
In other words, Americans have not been clamoring for action on the deficit. On the contrary, they’ve made it clear in poll after poll that they consider jobs to be a more pressing concern. One can argue that the debt ceiling legislation is relatively lukewarm as deficit reduction. But it is inarguably an anti-growth, anti-jobs bill.
So what explains this? The public prioritizes job creation and explicitly prefers tax increases, especially on the rich, if that means greater funding for a wide range of social programs. So how did we get legislation that does literally nothing to address those preferences? One obvious answer is the intransigence of the GOP and its specific political interest in ensuring that the economy continues to lag through 2012, the better to knock off Obama. This is, as Senate Minority leader Mitch McConnell has clearly stated, the Republicans’ priority. But it takes two to tango: Democrats in general, and Obama in particular, not only accepted the austerity frame, but also embraced it. Perhaps they did so because, as the respected political analyst Ruy Teixeira says, “lacking any clear economic philosophy of their own, many Democrats are easily swayed by elite media pressure and bogus economic arguments that rely on ‘common sense’ notionsdebt is bad, Americans are tightening their belts and so should the federal government, etc.rather than facts and logic.”
Regardless, the key point is that elite demands for austerity, not public preferences, have driven this debate and outcome. It would take significant contortions to assert that, in such a dire time, the president and the Congress passed legislation that meets the needs or the desires of a clear majority of Americans. At best, the debt ceiling imbroglio was a senseless diversion and, at worst, a further drag on an already sputtering economy. As a symbol of how broken and unresponsive our political system has become, it is perhaps the clearest indication yet of the state of our democracy.