Program cuts bleed the nation

By Will Parry

Here’s what we’re up against, and it’s not pretty.

We’ve got a new law on the books, the Budget Control Act (BCA) of 2011. The BCA cuts the discretionary programs people need by nearly one trillion dollars over ten years, but leaves untouched the massive wealth of giant corporations and the nation’s millionaires.

Those cuts are only the beginning. BCA has created a new “super committee” of six Republican and six Democratic members of Congress, and given it until November 23 to seek majority agreement on any combination of spending cuts and increased revenue that produces an additional $1.5 trillion in deficit reduction.

If seven or more members of the 12-member committee can agree, their deficit reduction package will be submitted to Congress for an up-or-down vote, with no amendments allowed. If the plan is not adopted, or if it fails to reduce the deficit by at least another $1.2 trillion, the BCA requires even deeper automatic cuts in federal programs to take effect beginning in 2013.

The deficit hawks have effectively cut the regular committees of Congress out of the action. And they have narrowed the focus of the national discussion to: “How can we cut our way to a balanced budget?”

Progressive Democrats and respected economists say flatly it can’t be done, that slashing the funding for government programs is exactly the wrong medicine. With the economy mired in a long-term recession, with 25 million unemployed Americans, they are calling for a jobs program that’s big and bold, commensurate with the seriousness of the crisis.

The same Republicans who won’t slap so much as a five-cent tax on millionaires are ready to make the millions who depend upon Social Security, Medicare and Medicaid pay for a deficit caused by two wars, multi-billion dollar tax cuts for the wealthiest Americans, and the worst recession since the 1930s.

The threat to the integrity of those basic social programs is ominous. House Majority Leader John Boehner wants the age for full retirement benefits bumped up to 69 or 70. Rep. Jeb Hensarling (R-Texas), co-chair of the Supercommittee, derides the three programs as “cruel ponzi schemes.”

And all six Republicans on the Super Committee advocate deep cuts in Social Security, ending the Medicare protections seniors rely upon, and cutting $1.4 trillion from Medicaid, the sole health care resource of millions of the frail, impoverished elderly.

It does not help that President Obama supports a revision of the Social Security COLA formula that would cruelly tighten the screws on the income of retirees as they grow older, cutting benefits by $560 a year at age 75 and by a full $1,000 a year at age 85.

The grim reality is that the six Republicans on the Supercommittee are not about to be swayed by appeals to bipartisanship. The danger is that they will pick up the vote of one defecting Democrat to create majority support for a proposal laden with still deeper cuts in the programs people depend upon. With seven votes from the committee, the proposal would then go to the full Congress for an up-or-down vote with no amendments.

President Obama is preparing to address the jobs issue as we go to press. Thus far, he has proposed small-bore initiatives that don’t measure up to the deepening crisis created by unemployment on this scale.

“Right now, the old booster rockets are gone,” says the economist Robert Reich. “The original stimulus is over….Combine the budget cuts state and local governments continue to make with the slowdown in consumer spending, the reluctance of businesses to expand or hire, and the magnitude of unemployment and under-employment, and you need a big new booster rocket.”

Reich then outlines his own bold 10-point “booster rocket.” He’d exempt the first $20,000 of income from payroll taxes for two years and make up the shortfall by “scrapping the cap” so that the wealthy pay their full share of the Social Security payroll tax.

Reich would also recreate the Works Progress Administration and the Civilian Conservation Corps to put the long-term unemployed directly to work. He’d create an infrastructure bank to fund the repair and upgrading of everything from roads to schools to sewer systems.

He’d provide relief for homeowners on their mortgage loans and make low-interest loans to cash-starved states and cities. He’d impose a “severance fee” on any big company that lays off an American worker and outsources the job abroad.

“A bold jobs plan is also good politics,” Reich says. “With more than 25 million Americans looking for full-time jobs, the wages of people with jobs falling, and an economy on the verge of a double dip, the President has to come out fighting on the side of average people.”