Obama’s Bad Budget Math

The New York Times called the federal budget proposed by President Barack Obama “encouraging.” “It makes a number of tough choices to cut the deficit by a projected $1.1 trillion over 10 years,” the paper said in an editorial on Feb. 15, the da after the president unveiled his spending plan, “which is enough to prevent an uncontrolled explosion of debt in the next decade and, as a result, reduce the risk of a fiscal crisis.”

But federal debt, a potentially significant issue down the road, is not the chief problem we face. While the political classes continue to talk about a burgeoning economic recovery as though we are out of the water and all is well financially in the nation, American workers and their families remain on the precipice of financial ruin.

Official unemployment stands above 9%, which is still among the highest rates in recent memory. But even that number does not tell the true story of what American families are facing as we move deeper into the second decade of the 21st century. A broader array of statistics is needed to show this more fully:

• For every unemployed American included in the official statistics, there is a second one who either wants full-time work but can only find a part-time job, is working a job below his or her skill and pay level or has given up on finding a job altogether.

• Foreclosures remain a huge, if forgotten, problem. About 250,000 Americans have been entering foreclosure proceedings per quarter and it remains likely that one in 200 homes in the country will be foreclosed on.

• Health-care costs continue to rise - we pay nearly twice what other industrial nations pay for incomplete coverage and lesser outcomes, at least for those with money troubles.

For most Americans, therefore, evidence of the recovery is pretty limited. And yet, the talk in Washington has shifted from stimulus — injecting government money into the economy by creating government-sponsored jobs in construction, technology, etc. — to slashing the federal budget to avert a debt crisis that remains years away.

What’s worse is that the debate that is occurring has shifted so far to the right that the president — the man that the Tea Party calls a socialist — is talking about dismantling much of what’s left of the nation’s social safety net. On Obama’s chopping block: heating assistance for the poor, community-service block grants that provide (among other things) housing assistance for low-income Americans, funding for existing environmental infrastructure, college loans and far too many other important programs tomention.

Mike Lux, on The Huffington Post, called Obama’s budget “classic D.C. centrism” — which is being generous, I think — and compared it to the “truly far, far, far-right, extreme conservatism” of the Republican plan.

“A truly progressive budget is not being seriously considered by either party,” Lux says, with Obama staking out the very Obama-like allegedly reasonable center. Politically, that may “play pretty well for at least a while,” but it sets the president up for failure and dooms the poor and middle class to fend for themselves.

Robert Reich, former labor secretary under Bill Clinton and one of a handful of high-profile progressive economists, describes the Obama budget as fighting fire (the GOP cut-till-it-hurts budget plan) with gasoline. It is a debate, he says, between Democratic and Republican deficit hawks at a time when bold thinking and new spending is needed. “The Republican bromide — cut federal spending — is precisely the wrong response to this ongoing crisis, which is more analogous to the Great Depression than to any recent recession,” he wrote on “Herbert Hoover responded the same way between 1929 and 1932. Insufficient spending only deepened the Great Depression.

“The best way to revive the economy is not to cut the federal deficit right now. It’s to put more money into the pockets of average working families. Not until they start spending again big time will companies begin to hire again big time.” Don’t expect anyone in Washington to listen. The left in America has been neutered, for the most part. It has allowed itself to be drowned in electoral arguments that have little to do with making the lives of average Americans better. This is especially the case when a Democrat is in the White House.

The left’s tepid response to Obama’s consistent right turns has been a somewhat muted displeasure that leaves the president free to genuflect before the gods of conventional wisdom — the Washington pundits — while tossing crumbs to his supposed base. The only hope we have is for workers to stand up and fight back. That’s what is happening in Wisconsin, where more than 10,000 government employees and their supporters “packed the Capitol Square and the inside of the statehouse to protest Gov. Scott Walker’s budget plan to strip many bargaining rights from state and local government.” The response in Wisconsin is heartening and, I hope, the beginning of an energetic effort on the part of public workers to defend themselves and rebuild ties with other groups of workers.

The destruction of the union movement in the private sector has aided the right in its attack on the public sector as beat-up private-sector employees wonder why they are the only ones taking the hit. Only by organizing, by working together, can we shift the debate back to where it belongs.

Hank Kalet is regional editor for in New Jersey. Email

From The Progressive Populist, March 15, 2011

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