Op-Ed, 633 words

The Fake Debt Crisis

The latest standoff may trigger a new round of cuts to programs low-income Americans depend on most.

Martha Burk

As the American people tried to celebrate last year’s holiday season while mourning the loss of 26 lives in Newtown, Connecticut, Congress and the White House were duking it out over the “fiscal cliff.”

Our leaders reached a temporary solution on New Year’s Day that averted some of the self-imposed toxic mix of mandated tax increases and discretionary spending cuts that threatened to trigger a new recession. In the end, they couldn’t agree on a comprehensive deal, so the sequester went into effect two months later with relatively little fanfare.

burk-debtceiling-Tax Credits

Tax Credits/Flickr

We’re still living with those $80 billion across-the-board cuts, which slashed research spending, kicked nearly 60,000 kids out of Head Start, and forced Meals on Wheels to provide less help for the elderly and others in need.

Now they’re at it again. After October’s government shutdown, a new congressional committee got a Friday, December 13 deadline to reach an agreement on a budget for the 2014 fiscal year — which began more than two months ago. Come January 15, federal spending authority will run out again and we could begin 2014 with another shutdown.

On the surface, the conflict between President Barack Obama and the Republican Party is over how to cut yearly federal deficits, which pile up over time and increase the national debt. Republicans cite a “debt crisis” and construct economic doomsday scenarios to justify their insistence that Medicaid, Medicare, and Social Security should be cut.

Obama says no — we need more revenue, and it needs to come from the very wealthy and corporations who don’t pay their fair share in taxes. Besides, the deficit is already much smaller — thanks to the ongoing sequester and two provisions in that New Year’s fiscal deal: a payroll tax cut for all workers and the end of the Bush-era tax cuts for the very richest Americans.

There are a couple of things wrong with this picture. To begin with, while the government is indeed operating at a deficit (albeit a much lower one) and as a consequence piling up debt, there is no debt “crisis.”

According to leading economists like Nobel Prize winner and New York Times columnist Paul Krugman, deficit spending can improve ailing economies, and we should actually have more of it until ours fully recovers from the deepest crisis we’ve seen since the Great Depression.

Secondly, Republicans don’t really care about deficits and debt. After all, they created both — largely through tax cuts for the wealthy and unpaid-for wars during the George W. Bush administration. Their whole argument is a smokescreen for their core agenda — massive wealth transfers from the poor and what’s left of the middle class to the rich — through regressive tax policies and dismantling the safety net.

This isn’t new. It’s been the Republican agenda for at least 30 years.

In 2011, Republicans brought the country to the brink of default for the first time in history by insisting that a raise in the debt ceiling (historically bipartisan and routine) be offset by program cuts. This year, they shut down the government because they didn’t get their way.

Obama has said that strategy won’t work again, and the current need to once again raise the amount the government can borrow is non-negotiable. And he has upped the ante with a new demand that any future cuts be offset by tax increases on the wealthiest and corporations.

We don’t yet know if the latest standoff will trigger a new round of cuts to programs low-income Americans depend on most. Right now the House is asking for a $40 billion cut in food stamps over the next decade, and Medicare and Social Security are always on their hit list.

What we do know is that Republicans seem bent on causing one “crisis” after another, and the country loses in the bargain.

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Martha Burk is the director of the Corporate Accountability Project for the National Council of Women’s Organizations (NCWO) and the author of the book Your Voice, Your Vote: The Savvy Woman’s Guide to Power, Politics, and the Change We Need. Follow Martha on twitter @MarthaBurk.
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