The Budget Misdeal: An Agreement That Solves Nothing

Robert Borosage

The Beltway breathed a huge sigh of relief with the announcement of the budget deal cobbled together by Senator Patty Murray and Rep. Paul Ryan. It is the deal, not the substance, that is being applauded. If it overcomes opposition from a hostile right and largely resigned liberals, it could provide a two-year truce from the budget wars, hostage taking, and threatened government shutdowns. But business as usual is hardly a virtue when that business isn’t addressing what needs to be done.

And that is the reality of this misdeal. It keeps government open (at least until March, when the borrowing authority is exhausted and another debt ceiling crisis looms), but it punts on any of the pressing challenges this country faces, a failure that only adds to the hole we are in.

Every assumption of the deal is wrong-headed.

1. It assumes that deficits are still America’s fundamental problem. Wrong. Our fundamental problem is that Americans are struggling to find decent work. We are halfway into a lost decade marked by mass unemployment, stagnant wages, rising inequality, growing insecurity and a sinking middle class. As President Obama stated in his address on inequality, “A relentlessly growing deficit of opportunity is a bigger threat to our future than our rapidly shrinking fiscal deficit.”

This deal says that for two years, the federal government will do nothing to address that opportunity deficit.

2. The deal refuses to repeal the mindless sequester cuts that were designed to be abhorrent. Instead it “pays for” alleviating less than half of them over the next two years. And it insists that the relief be allocated equally between a bloated Pentagon, the largest source of waste, fraud and abuse in the federal government, and threadbare vital domestic programs like infant nutrition, support for schools and clean energy R&D.

3. The deal accepts the bizarre Republican position that no billionaire’s tax rate can be raised, no multinational’s tax dodge shut down to provide resources for investments vital to our future. So investments that even the Chamber of Commerce would agree are essential to an efficient economy – like rebuilding our decrepit infrastructure — will not be made.

4. The deal accepts the risible Republican position that the rich have too little money and workers too much. So new federal workers will pay more for their pensions and military retirees will get a cut in their pensions. But none of the global corporations that ship jobs and report profits abroad to evade taxes will pay a penny more.

5. The deal accepts the Republican refusal to include renewal of unemployment benefits, insuring that over a million unemployed workers and their families will be cut off at the end of the year. And it excludes any pledge to sustain funding for food stamps, even as the right is pushing for harsh cuts in the farm bill. This is a deal that shelters the wealthy and exposes the vulnerable.

Consider what a sensible budget might look like. It would:

• Repeal the sequester cuts as mindless and harmful

• Protect Social Security, Medicare, Medicaid and programs for the most vulnerable still struggling in the midst of a lousy economy. Lay out plans to expand Social Security to provide the security seniors need to retire in dignity.

• Detail the investments we need to make for our future – in education from pre-k to affordable college, in modernizing our infrastructure, in clean energy R&D, in job training to increase the skills of workers, in service programs to put the young to work – and determine how to pay for them by insuring that the rich and multinationals pay their fair share of taxes, and rolling back subsidies for entrenched interests from Big Oil to Big Pharma.

• Take the next steps to fix the long-term source of rising deficits – our broken health care system. There, the Obama reforms are already slowing the rate of cost increases. A sensible next step would be to end the drug company rip-off, empower the government to negotiate bulk discounts in drug prices and crack down on patent abuses.

Due to popular organizing and massive public opinion, Social Security, Medicare and Medicaid were protected in the current deal, but nothing else was accomplished.

And everyone should be clear why this is so. Despite the fact that President Obama won reelection, and Democrats received more votes than Republicans in House races, Republicans scorned the mandate of voters. Despite the fact that Republicans could not afford another shutdown of government, Democrats somehow negotiated from weakness, not strength.

We are not moving on the agenda America needs because Republicans are standing in the way.

Republicans opposed repeal of the sequester. They won that.

Republicans oppose any tax increases. They won that.

Republicans oppose expanding investments vital to our future. They won that.

Republicans oppose focusing on our problems here at home, while getting Pentagon spending under control. They won that.

Republicans want deep cuts in Social Security, Medicare and Medicaid. Democrats stopped that.

One thing is clear. We will never get to the priorities we need so long as Republicans have the power to stand in the way.

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