In the aftermath of last week’s cliffhanger budget deal, pundits focused on the size of the cuts, about $38 billion. But while that number sounds large, it is small compared to the cuts that will be debated in the coming weeks, as Republicans try to pass parts of Rep. Paul Ryan’s (R–Wis.) long-term budget plan.
If Democratic and Republican leaders really care about shrinking the federal debt and improving employment prospects they will drop the foolish narrative of austerity that has prevailed in recent months. The American economy needs growth, and massive spending cuts will do nothing to bring that about.
In the months after their midterm shellacking, Democrats have slowly abandoned economic principles and joined with Republicans in espousing the idea that immediate deep spending cuts and austerity measures are necessary for prosperity. In reality, such measures will weaken the economy and threaten the nascent recovery. Back in February, Sen. Harry Reid (D–Nev.) said that slashing spending by around $30 billion would be “draconian.” Unfortunately, since then, he has begun to refer to the $38 billion in cuts he helped pass as “historic.”
Republicans claim that deep cuts are necessary to maintain investor confidence and avoid a debt crisis like Europe’s. While the size of the U.S. debt is a problem, there is no indication that it requires immediate reduction or that investors are worried about the government’s ability to make good on its payments. Rather, rates on U.S. bonds are at an all-time low. Cuts will be needed, but they must come only after the economy has returned to stable ground.
The first step in rejecting the cutting frenzy will be forcefully countering Ryan’s budget plan. Seventy percent of his cuts would affect low-income families, while tax cuts go almost entirely to corporations and the wealthy.
President Obama’s plan presents a more balanced approach. In vowing not to renew the Bush tax cuts a second time, the president made clear that the disadvantaged cannot be made to bear the burden of sacrifice alone. Equally important was his promise to cut military spending, something Ryan’s plan essentially ignored. The president has backed down on these issues before, but this time he, and the country, cannot afford to compromise.
It is crucial that our leaders denounce the false promises of austerity and fight to defend the essential tenets of the President’s budget plan: a commitment to protect crucial social services and a promise that serious cuts will come when the economy has regained steam. If they do, then last week’s unfortunate budget deal won’t even amount to a line in the history books, and Democrats will be vindicated by robust economic recovery.
