S. 365, the Budget Control Act of 2011, is a landmark in American history, but for the wrong reasons. It is a fake solution to a phony crisis. It provides for a radical transformation of the structure of government. It is an attack on the principle of government of the people. All this in the name of fiscal accountability.
The choice we have today, default or dismantling of the social compact through draconian spending cuts, is a false choice. The President could have simply told Congressional leaders back in December of last year that the debt ceiling was not negotiable, and invoked the 14th Amendment as a backstop.
The “debt crisis” was spurred on by credit rating agencies of dubious integrity threatening a downgrade of the nation’s credit unless the government cut spending. Most of the cuts are guaranteed to hurt those who live at society’s margins, while S. 365 protects the investor class whose interests are served by the rating agencies.
Unelected credit ratings agencies like Standard and Poor’s, the self-declared arbiter of U.S. government creditworthiness must themselves be subjected to a new level of scrutiny absent in the run-up to the Wall Street crisis. The credit raters helped to create that crisis too by procuring business through selling rating marks. The very idea that the sovereign United States must genuflect to dishonest rating agencies is antiquated and counterproductive to America’s economic recovery.
This bill fails on its own terms, which are allegedly about fiscal accountability. The debt has three main drivers:
The first is the recession. If we want to reduce the debt, we have to stimulate the economy, which is hobbled by a jobless recovery. America has 14 million people out of work. We have over three trillion dollars of infrastructure which must be replaced or rebuilt. We should be investing in America, rebuilding America, stimulating the American economy, priming the pump of our economy instead of capping our economic water well. Our GDP is lagging. This bill cuts nearly three trillion dollars in government spending, which is one of our main tools for fighting the recession. So much for the recovery. So much for putting America back to work.
The second reason for the size of the debt is the Bush tax cuts. This bill fails to end the Bush tax cuts for the rich, which added a trillion dollars to the deficit. Not only are the wealthy not paying a fair share of the taxes but their privileged position is locked in, to the detriment to the rest of the society. This single action makes clear that this bill is a vehicle for the rich to get richer and the poor to get poorer.
That working Americans are being offered a tax holiday is one of the cruel ironies of this bill in that the tax holiday adds more to the deficit on one hand, while requiring cuts to pay for it on the other. Those very cuts will undermine the social and economic position of those whom the tax holiday is alleged to help.
The third reason for the size of the debt is the wars. This bill fails to realize savings from ending the wars. Instead it continues the wars in Iraq and Afghanistan at current funding levels for at least another 10 years. According to the Congressional Budget Office (CBO), “The caps would not apply to spending for the wars in Afghanistan and Iraq and for similar activities (sometimes referred to as overseas contingency operations). . . " If this bill required a slow drawdown of troops as the Reid bill did, it would save at least $1.2 trillion.
It is inexplicable that we are creating more space for war and less space for jobs, housing, education, caring for our elderly, home heating assistance and a wide range of activities of any government which truly cares for its people.
A policy of no limits for war and hard limits on domestic spending, coupled with hundreds of billions of dollars in tax cuts for the rich, disproportionately affects the poor and middle class. Wall Street has swelled with bailouts, multiple editions of largesse through quantitative easing, skyrocketing executive pay and bonuses, and freedom to gamble the public’s money through hedge funds. Main Street has suffered a massive loss of retirement savings, housing security, access to affordable health care, real wages and benefits, full employment and massive loss of small businesses. The wealth of America is being accelerated to the top and this bill pushes that acceleration.
This bill is a direct assault on representative government. The House of Representatives and the Senate consist of 435 and 100 Members, respectively. With the creation of a super-committee, the Congress has been reduced to a czardom where 7 of 12 members are given the power to determine the course of the American economy, with hordes of K Street lobbyists already poised to swoop in to protect their narrow interests against $1 trillion dollars in deficit reduction measures.
The Congressional committee and subcommittee process, with its membership composed of individuals with expertise in specific areas, is designed to encourage thorough consideration of measures which affect the lives of hundreds of millions of Americans. This process is now abandoned. Abandoned with it is the intent of the founding Fathers when they established the House of Representatives specifically to avoid such a dangerous concentration of power. The super-committee is poised to cut Medicare, Medicaid and Social Security while limiting accountability.
We could have avoided this hostage-taking if the President chose to apply his expertise in Constitutional law to invoke the 14th Amendment of the Constitution to raise the debt ceiling. Instead, we are taking America from the New Deal of 1932 to the Raw Deal of 2011. We should be focusing on strengthening Social Security, Medicare and Medicaid and creating jobs. The Democratic Party is running away from its traditional role of protecting the poor, the elderly, and the working class. To whom do these groups now turn?