Main Street

What’s Right in the President’s Deficit Plan

In a White House speech today, President Barack Obama put forth a proposal to deal with long-term deficits, a proposal that should play a role in negotiations of the deficit “supercommittee” which holds its next meeting on Thursday.

We’re still looking at the details of his proposal to see how it would affect people like Working America’s members, but a few things stand out positively. Obama puts jobs first in line, requesting the passage of the American Jobs Act. This makes a lot of sense, because we can’t hope to make progress on deficits without broadly-shared economic growth.

The other noteworthy thing is that Obama’s proposal puts tax fairness on the table. Part of the cost of reducing deficits, in Obama’s proposal, will be paid for with common-sense tax changes—letting the tax cuts for the very wealthiest expire and closing a loophole that allows many finance-industry millionaires pay a lower tax rate that middle-class families do.

The benefits of economic growth have gone increasingly to a smaller and smaller segment of society, even as the median income for the rest of us has dropped and poverty has increased. The ideological talking point that miniscule taxes for the very wealthiest are the key to job growth is contradicted by the simple reality of our lost decade. It’s only fair to ask that the small minority of people who have actually gotten ahead in the past decade to contribute their fair share.

It’s also important to note what’s not in the proposal—President Obama is not proposing cuts to Social Security, which would be a devastating blow to seniors and to future retirees. He’s also not proposing the oft-discussed, economically unsound idea of raising the Medicare eligibility age. This makes a real difference to people like Working America’s 3 million members, many of whom are retired or approaching retirement. We can’t afford to sacrifice our promises to retirees while pursuing a discredited ideology on taxes.

A proposal that relies on drastic cuts to needed services is exactly the wrong step for our economy—we can’t make short-sighted cuts that will cost jobs for teachers and public safety officers and leave our communities vulnerable, nor can we balance the budget by undermining the guarantees we’ve made to seniors through Social Security and Medicare. To his credit, Obama has promised to veto bills that rely entirely on those kinds of cuts.

Contrast this proposal to the talking points of the House GOP leadership: they claim that the way to create jobs is to double down on Bush-era policies by slashing programs, cutting taxes and removing regulations that protect workers and consumers. It is, as economist Jared Bernstein notes, “their usual agenda, now opportunistically mapped onto the current jobs crisis…the arguments lack substance.”

The fact is that corporations aren’t broke from taxes. They’re sitting on literally trillions in cash because of a gap in demand due to millions of under-employed and underpaid Americans. Working America members get this—they know that their local businesses can’t hire without customers and that people can’t keep the economy going when they can’t make ends meet.

The usual talking points from House leadership have been proven drastically wrong by the past decade of light taxes, increasing inequality and stagnant wages. Yet they keep repeating them and trying to tilt policy further and further in the direction of their wealthy funders. It’s no wonder that working people like President Obama’s jobs proposals, but don’t trust Congress to pass them.

The bottom line is that we need to focus on the immediate crisis of jobs before we worry about the longer-term impact of deficits. Every day, Working America canvassers talk to thousands of middle-class and working-class people whose top concern is the ability to find work, stay in their homes and provide for their families.

The conversation in Washington D.C. needs to start with those concerns—not with slashing away the safety net for retirees or continued giveaways to the very wealthiest.