fresh voices from the front lines of change







The raw deal on the budget ceiling has been cut. The Tea Party terrorists – the extremist faction willing to hold the economy hostage to get their way – have won. The Republic, common sense and decency have been trampled.

With the economy deeply depressed, 25 million people in need of full time work, the raw deal will impede any recovery. It precludes any serious action on jobs from the federal government. It will cost jobs as spending is cut. Instead of getting serious about a plan to revive this economy and put people back to work, Washington will remain fixated on what and how much to cut. From the President to the Tea Party zealots, politicians will tell Americans that this agreement is “important to our economy.” Yes, it is important – important in the way a virus is important to a sickly patient. It will make things worse.

With Gilded Age inequality, and hedge fund billionaires paying a lower effective tax rate than their secretaries, the deal contains no tax hikes. Poor and working Americans are asked to pay to clean up the mess that Wall Street’s excesses created.

Although the terms of the agreement are complicated, the capitulation is clear. There will be deep cuts in discretionary spending—$900 billion over 10 years, one-third from the Pentagon—in the first step. There are no tax revenues, much less higher taxes on millionaires in that mix. (The President touts that domestic discretionary spending will be slashed to levels not seen since the Eisenhower administration, presenting a travesty as if it were a victory.)

Then a rump congressional committee—a gang of 12, split between Republicans and Democrats—will be given the charter and extraordinary powers to find another $1.5 trillion over 10 years, from cuts in Medicare and Medicaid or possibly with revenues from closing loopholes (raising tax rates seems to be off the table.) Republicans have already pledged to allow no revenue increases.

If the committee gridlocks, there will be an automatic $1.2 trillion in across the board spending cuts, with the Pentagon and Medicare on the chopping block, while Medicaid, Social Security, veteran’s pay and programs for the poor are exempted.

The raw deal sets a precedent that Republican leaders are already celebrating: from now on, they boast, every debt ceiling vote will be the occasion for holding the economy hostage to more extreme demands. A balanced budget constitutional amendment. A two-thirds vote for any tax hike on the rich. Privatization of Social Security. The demands will get more extreme over time.

No progressive can or should vote for this capitulation. Republicans have won big. They should be forced to produce the votes to pass this in the House. If they can’t, the president should do what he should have done from the beginning. Stop the negotiations, demand a clean lift of the debt ceiling, and invoke his constitutional powers to avoid default.

If the deal passes the Congress, then congressional Democrats should insure that no Democrat named to the Gang of 12 will accept any agreement that does not include more revenues than spending cuts, while defending Medicare, Medicaid and Social Security from a rump process.

Given Republican intransigence, that will force deadlock, triggering deep spending cuts that won’t go into effect until January of 2013. Americans can then decide in the election whether they want to vote for those who would gut Medicare and Social Security to protect tax breaks for the wealthy.

The media will trumpet the agreement; the markets will exhale; the pressure to fall in line will be great. But when the dust clears, the economy will still be in trouble, and the federal government will be less able to help. Americans will see investments in schools, research, public health, clean energy, transportation cut back. Inequality will grow; poverty will spread.

Voters will have to decide. They know Republicans are prepared to go to the mat to protect the wealthy from tax hikes, even to the point of endangering the economy. Will voters have any clue about what Democrats are prepared to fight for?

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