Debt Ceiling Delusions
As the partisan fight over the debt ceiling approached the August 2 deadline, President Obama presented Republicans with what, at almost any other time in recent history, would be seen as a conservative’s dream: $4 trillion in spending cuts over ten years, and the offer to restructure core pieces of the Democratic legacy, including Social Security and Medicare. GOP House Speaker John Boehner walked away from the deal not because the cuts weren’t steep enough but because they would be achieved, in part, through tax increases on hedge-fund managers, private jet owners and oil and gas companies.
The Republicans have once again shown themselves to be a party, to paraphrase Nobel laureate Joseph Stiglitz, of the 1 percent, by the 1 percent, for the 1 percent. It is a party that accepts no new taxes, no closing of loopholes, no crackdowns on overseas tax havens and no increase in corporate tax rates, even as the biggest corporations pay little or no taxes on billions in profits. It is a party that embraces savage cuts in the social safety net but then draws a line in the sand to protect the wealthy. To Republicans, shared sacrifice is anathema. Now, as before, the global economy may be their victim.
What’s worse is that, rather than being chastised, the GOP has been empowered by an establishment media obsessed with debt and deficits. When Republicans decry tax increases, it is all too rare to hear the media respond with facts or to offer historical perspective. In the 1950s, the corporate sector accounted for an average of 27.6 percent of all federal revenues; in 2010 it was 8.9 percent. And individual tax rates for the richest are now lower than in all but five of the past seventy-nine years.
At press time, the GOP had retreated from its insistence on major cuts, instead offering a cynical and circuitous plan that would allow Obama to increase the debt ceiling in three stages while allowing Republicans the symbolic opportunity to vote against it. In the meantime, we are confronted with grim news about a jobs crisis that has spiraled into a genuine emergency, even as it is treated as the “new normal” or a mere inconvenience.
President Obama and his team have recently taken to talking about “a unique opportunity to do something big” with regard to the debt ceiling. Little, however, has been said about applying that desire for bigness to job creation. Obama wants to play the role of reasonable adult, urging members of both parties to “eat our peas.” But being reasonable means leading a nation that cries out for relief and reconstruction after months of stalled job growth—not acting like a hostage negotiator.
And if lines are being drawn in the sand, the president must draw his as well. Yes, he should demand that the rich pay their fair share, but insisting that they contribute to deficit reduction cannot be our fundamental cause. We must draw our lines on behalf of the jobless, who now spend, on average, forty weeks looking for work. We must draw ours on behalf of the elderly, who cannot afford a smaller Social Security check. We must draw ours for the hundreds of thousands of families who have already lost their Medicaid.
President Obama was elected, in part, because he challenged the smallness of our politics. But his actions on the debt negotiations suggest that he has embraced that smallness. This is a time for the president to join the millions across the country who demand solutions for the employment and economic crisis. As Obama himself said, “If not now, when?”