Progressive Groups Respond to the White House Deficit Commission Report

Richard Trumka, President, AFL-CIO

“With this report the Deficit Commission once again tells working Americans to ‘Drop Dead.’ No proposal on fiscal issues is serious that leaves the Bush tax cuts for the rich in place while raising taxes on the middle class and slashing Social Security and Medicare. All commission members should vote no on this misguided plan. All members of Congress should also oppose these job-killing policies if they are raised in future legislation or budgets.

Our nation IS facing an immediate jobs crisis. Last night 800,000 Americans lost their unemployment insurance, and that number will grow to two million by Christmas. One hundred workers from across the country have come to Washington today to lobby Congress to extend unemployment insurance. It is unconscionable that this commission is proposing to slash these very workers’ Social Security and Medicare.

This whole discussion reeks of hypocrisy. The faux deficit hawks on the commission – and Senators who claim unemployment insurance must be paid for — have no problem clamoring for more unpaid Bush tax cuts for millionaires.

We need to focus now on the jobs deficit. Fifteen million people are out of work, and another eleven million have given up looking or are working part-time involuntarily. We need to end tax breaks that send American jobs overseas and invest in jobs by rebuilding our crumbling infrastructure and green technologies.

To address long-term deficit issues the AFL-CIO supports the core principles underlying the “Investing in America’s Economy Budget Blueprint.” We need to put jobs and economic growth first; we must invest in education and infrastructure to be competitive in the 21st century; Wall Street and the wealthy must bear their share of the burden; and we need to deal with the growth of health care costs.”

Mary Kay Henry, International President, SEIU

“This proposal is a jobs killer at a time when our number one priority must be putting America back to work. The American people expect real solutions to create good jobs that support a family and bring fairness to our economy.

It’s time for our policies to move beyond the Beltway to reflect the real world. For too long, we’ve forced the American people to pay the price for the failed economic policies that plunged our economy into crisis and racked up our debt. We need to reduce the deficit – and we can do so without breaking the back of American workers. We can do so without cutting the jobs of nurses, educators, first responders, fire fighters, and millions of other Americans.

What the proposals by Representative Schakowsky, EPI, Demos and the Century Foundation, and the Citizens’ Commission all demonstrate is that we can reduce the deficit without cutting jobs or undermining the safety nets of Social Security and Medicare. These proposals offer real solutions to move our economy forward, reject the failed policies that created our current crisis, and respond to the demands of the American people to create good jobs.

We can reduce our deficit, create jobs, and restore economic security to our communities. It’s time for our leaders to find the political courage to invest in real job creation and challenge those responsible for the crisis we face.”

Tamara Draut, Vice President of Policy and Programs, Demos

“The final recommendations released today illustrate how out of touch many on the Fiscal Commission, and many of those wielding influence in the Beltway, are with the everyday economic concerns and fears of Americans everywhere. This plan ignores the need for immediate public investments to spur job creation, relies too heavily on discretionary spending cuts, and slashes Social Security at a time when fewer Americans can count on a secure retirement.

Outrageously, it embarks on a job-killing austerity path next fall (fiscal year 2012), when unemployment is still projected to be near 10 percent. In addition to imperiling the recovery in the short-term, the arbitrarily low debt target also hamstrings our ability to invest in our own economy – as our global competitors are doing.

Are the $4 trillion Bush tax cuts (the same amount saved by the Commission’s proposals) worth sacrificing America’s place in the world? The Our Fiscal Security blueprint shows that we can rebuild the middle class, invest in our own economy, and put our nation’s finances on a sustainable path. The Commission’s recommendations would guarantee that America’s greatest days our behind us.”

Eric Kingson, Co-Chair, Strengthen Social Security Campaign

“Fiscal Commission Co-Chairs Erskine Bowle’s and Alan Simpson’s latest proposal to radically change Social Security once again slashes Social Security benefits for most Americans, now and in the future. Again, it disregards the will of the American people who do not want Social Security benefits cut. The Simpson-Bowles proposal was dead on arrival once; it should be considered even deader the second time around.

Their plan would reduce the COLA when it should be increased because it does not keep pace with health care costs. It would raise the retirement age from 67 to 69 for today’s young workers and cut benefits overall by 17 percent to 36 percent for young, middle-income Americans entering the workforce today. (See chart showing the benefit cut to a medium wage earner.)

About 60 percent of the House Democratic caucus – 136 members – have written to President Obama opposing all Social Security cuts, including raising the retirement age. Cuts to Social Security are opposed by 8 out of 10 Americans – from Tea Partyers to union households, young and old – according to a recent poll of Election Day voters by Lake Research Partners. And 2 out of 3 Americans support lifting the payroll tax cap so that all earnings are subject to the tax, which currently taxes income up to $106,800.

Yesterday the Strengthen Social Security Campaign members made tens of thousands of calls to their Senators and Representatives. Their message: Do not cut Social Security. Social Security did not cause the federal deficit. Cutting benefits will not fix the deficit. It is time for the Fiscal Commission and elected officials who would undermine the economic security of Americans to heed this call. If elected officials do not, the 2012 elections could be very ugly indeed.”

Justin Ruben, Executive Director, MoveOn.Org

“The Fiscal Commission report confirms that elites in Washington intend to ask middle class Americans to once again shoulder the burden to make up for the irresponsible spending of the Bush-era. Raising the retirement age and cutting Social Security–a program that cannot by law contribute to the deficit—for hard-working Americans while giving giant corporations a tax break is irresponsible and immoral. If it hopes to maintain credibility with 98 percent of Americans who are not millionaires, Congress must reject this plan and instead focus on reigning in the deficit by ending tax cuts for the richest Americans and corporations.”

Ben Cohen, Founder, TrueMajority.org

“To the editor:

We have a big problem in this country and it looks like the co-chairs of the President’s fiscal commission are ready to face it. For decades we have wasted the money we should have been spending on kids and the environment by buying overpriced weapons that don’t work and staffing Cold War-era military bases around the world. Now it seems those bad ideas are on the chopping block to the tune of $100 billion in cuts.

Groups as diverse as the Center for Defense Information, CATO, Tea Partyers, TrueMajority.org and USAction all agree. These cuts don’t need to be a partisan issue. Many of the Republicans elected to the new Congress have pledged to put Pentagon spending under a microscope, and I know many Democrats would rather spend our tax dollars on essential things like education and health care – or perhaps programs to create jobs and bring down the unemployment rate. (Recent studies indicate that the Pentagon is just about the worst jobs generator of all federal expenditures.)

Politicians on both sides of the aisle should welcome a real debate on Pentagon spending. Every weapon system, every proposal to increase the size of the force, every plan for deploying our military abroad or expanding current operations must be scrutinized.

Thank you President Obama for taking these cuts seriously. Our children thank you too.

Ben Cohen”

John S. Irons, Research and Policy Director, EPI

“Today, the co-chairs of the National Commission on Fiscal Responsibility and Reform presented a revised version of their plan, but also announced that a final vote would be delayed until later this week.

With the delay, it is becoming increasingly clear that the Bowles-Simpson plan will not receive the required 14 votes to send the report to the President and Congress. The rejection of the proposal should not be seen as a failure to take deficit reduction seriously, but rather that the policy approach adopted by the co-chairs is flawed.

Most fundamentally, the report fails to fully acknowledge the current economic crisis. The report states that the reductions in annual appropriations would require “serious belt-tightening” beginning in just 10 months, despite the fact that the unemployment rate is expected to remain between 9% and 10% at that point. Despite paying lip-service to a payroll tax holiday, the plan includes no concrete, immediate action to create jobs or to spur economic growth in the near term.

We sometimes hear that having a long-term plan for attaining fiscal balance opens up the possibility for a rigorous near-term intervention to create jobs, which requires deficit spending. In this plan we get extensive long-term pain for no short-term gain.

The Bowles-Simpson plan also continues to misdiagnose the problem by focusing on cutbacks in domestic investments and Social Security—neither of which is a prime driver of the deficit in the short- or long-run. Nearly one-quarter of the near-term reductions (2012-15) in the report come from blunt-force cutbacks to domestic investments; however, the report is short on specific recommendations about how to accomplish this. Instead the proposal primarily recommends budget process changes, agency reviews, and even the creation of yet another committee to identify savings. Rather than taking on the hard choices, the Bowles-Simpson plan kicks the deficit-reduction can down the road. But the plan’s failure to explicitly reject a continuation of the Bush tax cuts for the wealthiest Americans—a giveaway that will add $700 billion to the deficit—is perhaps the clearest example of ducking hard choices.

Although the overall direction remains flawed, this proposal does have some positive elements. In particular, its recommendation to reduce spending by the Department of Defense, its attempts to build on cost-savings measures included in the Affordable Care Act, and some of its illustrative tax policies, such as its treatment of capital gains and dividends as ordinary income. However, it falls short of a comprehensive proposal in two critical ways: its inadequate approach to revenue collection and its counter-productive approach to job creation and economic growth.”

Karen Higgins,Co-President, National Nurses United

The revised, final report by the president’s National Commission on Fiscal Responsibility is an “unwarranted, outrageous attack on the health, safety, and retirement security of millions of nurses and tens of millions of other working people and should be immediately rejected by the Obama administration and Congress,” said the nation’s largest union and professional association of registered nurses today.

“It is time for the White House and Congress to stand up and send a clear message to the American people that they will not agree to further erode our retirement security and standard of living while continuing to promote further tax breaks and concessions to Wall Street and the most wealthy among us,” said Karen Higgins, RN, co-president of the-160,000-member National Nurses United.

Among its most egregious proposals, the report calls for raising the retirement age to 69 and the age for early retirement to 64, which especially targets workers with the most physically demanding jobs, including nurses who suffer more back injuries, for example, than any other employment group. NNU also opposes the proposal to cut benefits of up to 36 percent of younger workers, reducing the annual cost-of-living adjustment, and the decision to put far more of the burden of deficit reduction on working people than those on the top.

“Most long-term RNs worked for years with substandard pensions, and many now face new demands by employers to sharply erode their retirement plans. Therefore, cuts in Social Security would hit nurses especially hard. Raising the retirement age to 69 would force nurses, like other working people with physically demanding, stressful employment to delay retirement, at risk to themselves and their patients,” Higgins said.

Cook County RN Dorothy Ahmad, a Chicago resident, criticized Illinois Sen. Dick Durbin, a commission member, who said that raising the retirement age to 69 would be “acceptable to me.”

“How would he like his nurse to be 69, rolling into his hospital room in a wheelchair or scooter with his medication, trying to take care of him? At 69 years old, a nurse should be able to retire in dignity with security for herself and her family, not be forced to still be working at risk to her patients and herself. Chicago nurses are disappointed with Sen. Durbin’s response,” Ahmad said.

Higgins, who works in critical care, said she “cannot even fathom nurses at 69 still being required to work. You need to have the highest mental and physical alertness to be able to provide safe care. The idea that nurses would be able to do that at 69 is dangerous to patients, but forcing us to be in a position that we would have to is disgraceful.”

Retired California RN Elizabeth Pataki of Sacramento said protecting Social Security is vital for the many RNs who have been forced to “retire early with back injuries and a long work history that involved great stresses on their backs and joints. Most nurses cannot work to the usual age of retirement.”

Too many RNs, said Pataki, “have seen their pensions lessened and their savings lessened, and don’t have a comfortable margin to retire on. So Social Security is critical. To require them to work longer is unacceptable and will further handicap a nurse for the rest of her life.”

Women are also particularly threatened by the proposal, said Higgins. “More women are living below the poverty level and must depend on Social Security. They are frequently paid less than men and are also likely to move in and out of the workforce as they raise families and therefore the benefits they receive are less.”

“We see elderly people coming in who are just trying desperately to hold on, to provide for themselves and sometimes others. They are trying to pay their rent, put food on the table, and pay for their medications. It is often the medications that they give up, running the risk of being declared ‘noncompliant.’ Many are helpless, having nowhere to turn.”

“I think it is disgusting that we should even consider cutting back on Social Security benefits or reducing Medicare provision.”

Craig Jennings, Director of Federal Fiscal Policy, OMB Watch

OMB Watch today panned the plan proposed by the co-chairs of the National Commission on Fiscal Responsibility and Reform to reshape the nation’s fiscal priorities. While the plan contains some praiseworthy provisions targeted at the tax code and the federal budget process, overall, it represents an unfortunate step backward in meeting the needs of the nation’s working families.

Craig Jennings, Director of Federal Fiscal Policy at OMB Watch, said, “The commission, in its zeal to balance the budget in what it sees as a politically palatable way, failed to equitably distribute the burden of deficit reduction among all Americans.”

Certain elements of the commission’s plan, “The Moment of Truth,” deserve to be highlighted for the improvements that they would make in the federal budget process, including ending the abuse of emergency spending and setting aside funds to pay for unforeseen disasters. Also praiseworthy is the commission’s recognition that the $1 trillion in tax breaks found in the tax code, known as tax expenditures, are a form of spending and should be treated as such by Congress.

Unfortunately, as a whole, the proposed plan is a misguided attempt to confront the nation’s short- and long-term fiscal challenges. It ultimately balances the budget on the backs of the middle class, cripples the ability of the federal government to protect Americans, and diverts revenue enhancements to decrease tax rates for the wealthy instead of to reduce the deficit.

The plan also fails to confront the primary driver of the long-term fiscal imbalance – rapidly rising health care costs. While the commission recommends certain changes in Medicare and Medicaid that would curtail some costs through 2020, it has no solutions to stem the doubling of federal spending on health care between 2020 and 2050. Additionally, the commission has seen fit to put forward benefit reductions and tax increases to “fix” Social Security, yet Social Security plays no significant role in the degradation of the nation’s short- and long-term deficits.

The commission’s plan also unwisely places an arbitrary cap on federal revenues. Jennings noted, “By restricting the federal government’s ability to provide sufficient revenue for our national priorities, the plan would make it even harder to responsibly balance the federal budget, especially if unforeseen circumstances arise.”

At the same time, setting random caps on discretionary spending, like the ones in the proposal, would seriously hinder the ability of the federal government to provide working families with vital services such as education, employment resources, transportation infrastructure, and access to nutrition.

Jennings added, “Should the commission vote to approve this plan for congressional consideration, OMB Watch would strongly encourage Congress to reject it.” He noted that other plans, such as those by Rep. Jan Schakowsky (D-IL) (see http://schakowsky.house.gov/images/stories/1118_Schakowsky_Deficit_Reduction_Plan.pdf), the Citizens’ Commission on Jobs, Deficits and America’s Economic Future (see http://www.ourfuture.org/files/documents/citizens-commission-report-final.pdf), and Our Fiscal Security (see “Investing in America’s Economy: A Budget Blueprint for Economic Recovery and Fiscal Responsibility,” http://www.ourfiscalsecurity.org/storage/Blueprint_OFS.pdf), do far more to address the actual budget problems we face today while strengthening that which makes our nation great.

Nancy Duff Campbell, Co-President, National Women’s Law Center

“The plan proposed today by the Co-Chairs of the President’s National Commission on Fiscal Responsibility and Reform contains the same flaws as the one they released a few weeks ago: it threatens the economic security of women and their families as well as efforts to rebuild a strong economy.

The nation’s most crucial priorities in the short term should be to create jobs and promote a sustainable recovery. In the long term, the priority should be to reduce the deficit by a far greater reliance on additional revenues from a fair and responsible tax system than the Co-Chairs propose.

The Co-Chairs’ plan relies heavily on deep cuts to federal programs that are especially important to women, including Social Security, Medicare, Medicaid, and critical domestic discretionary programs. Overall only one-quarter of the nearly $3.9 trillion in deficit reduction that the plan claims to achieve by the end of the decade would come from revenue increases.

Although one stated principle is that the plan should not disrupt the economic recovery, the plan’s spending cuts are scheduled to take effect before a full recovery is likely. These cuts will jeopardize that recovery and inflict further harm on the victims of the economic downturn. The vast majority of the plan’s revenue reforms—already smaller than its spending cuts—would not start until after the program cuts begin.

The cuts proposed to Social Security would be particularly painful for women, who depend more on Social Security than men do. The plan would cut benefits for current retirees by reducing the cost of living adjustment, eroding the value of benefits for women who live longer than men. It would reduce benefits for all types of beneficiaries, including retired and disabled workers, widows and children, by changing the benefits formula. It would increase the retirement age, further reducing benefits for today’s young workers. And it would reduce benefits below scheduled levels for all but the poorest beneficiaries.

In addition, many of the plan’s health cuts would disproportionately hurt women and simply shift costs and cut programs that women depend on. Among the harmful cuts, the plan would transfer more Medicare costs to beneficiaries, requiring low-income beneficiaries to pay higher out-of-pocket costs. For example, a recipient at 200 percent of poverty would have to spend a shocking 35 percent of income on medical costs before reaching an out-of-pocket cap. This cost-shifting threatens the financial and physical health of vulnerable seniors on Medicare—the majority of whom are women.

The Co-Chairs’ proposal stands in stark contrast to more responsible alternatives released by Representative Jan Schakowsky (D-IL), Our Fiscal Security, and the Citizens’ Commission on Jobs, Deficits, and America’s Economic Future. These proposals address the nation’s immediate needs by promoting short-term spending to stimulate growth and create jobs. They also simultaneously reduce the deficit while preserving Social Security benefits, reducing inequality in the tax code and providing effective options for controlling the growth of health care costs.

The Commission members need to stand up for women and their families and reject the Co-Chairs’ proposal. Jeopardizing the well-being of women and families is no way to improve the nation’s bottom line.”