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The State of the Union Is Best Served by Growth, Not Austerity | The Nation

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John Nichols

John Nichols

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The State of the Union Is Best Served by Growth, Not Austerity


(AP Photo/J. Scott Applewhite)

The great debate in America is not about the “fiscal cliff” or the “debt ceiling” or the “sequester” or whatever other fantasy pops into Paul Ryan’s head when he’s not reading Ayn Rand.

The great debate in America is between austerity and growth.

And Tuesday’s State of the Union address is the right moment for President Obama to make a clean break with the austerity lie in combination with a firm embrace of the growth agenda that is needed.

Bill Clinton, who has emerged as something of an economic “explainer-in-chief” for the Obama administration, proposed as much in an address last week to congressional Democrats. “The debt problem can’t be solved right now by conventional austerity measures,” said the former president, who reminded his attentive listeners that “everybody that’s tried austerity in a time of no growth has wound up cutting revenues even more than they cut spending because you just get into the downward spiral and drag the country back into recession.”

Clinton is right. But he has only provided the president with the talking point. Obama will need more than that to counter the determined campaign of Ryan and the Republicans—along with the “Fix the Debt” astroturf scam promoted by free-spending CEOs—to advance their austerity agenda as part the of coming sequester and debt-ceiling debates. Ryan and the Republican proponents of austerity are for making deep cuts in order to balance budgets at any cost—except, of course, taxing their wealthy campaign donors. As such, they are more than ready to render cherished programs such as Social Security, Medicare and Medicaid, as well as vital services such as the Post Office, so dysfunctional that Americans will start thinking the unthinkable: that these programs should be privatized.

Unfortunately, austerity doesn’t work. Clinton says so. The Congressional Budget Office says so. Both The Economist and the Financial Times—not exactly left-wing rags—say so. Indeed, The Economist and the Financial Times decry European austerity schemes that have created high unemployment and economic instability. So it is appealing to suggest that Obama need only say “no” Tuesday tonight.

But “no”—or worse yet the compromise of “yes” and “no” that some Democrats entertain—is not a sufficient alternative to austerity.

As part of its campaign to get Obama to use his State of the Union address to oppose austerity, New York's Working Families Party says: "Truth be told, we need to expand our commitment to our fellow Americans."

That's the point. Simply opposing austerity is not enough. The president must present a specific growth agenda that has a goal of expanding job creation initiatives and strengthening families and communities.

That’s what key members of the Congressional Progressive Caucus, led by caucus co-chairs Raul Grijalva (D-AZ) and Keith Ellison (D-MN), have provided.

Obama does not have to go all-in with the progressives to get the point across. But he should recognize the value of this outline for countering the fiscal fabulism of Ryan and the Ayn Randites who would make America a nasty and brutish place.

Arguing on behalf of the progressive “Balancing Act” proposal, Ellison says that America has already gone too far down the austerity path—not just at the federal level but in states such as Wisconsin, Michigan and Ohio, where Republican governors have attacked public services, public schools, public workers and (in Michigan’s case) private sector workers.

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“Almost $2 trillion has been cut over the past two years from teachers, firefighters, police officers, loans for college students, and infrastructure investments,” the congressman says of warped federal budget priorities. “The American people shouldn’t continue to pay the price for massive tax breaks for millionaires and billions of dollars in subsidies to oil companies.”

To that end, Ellison, Grijalva, Illinois Congresswoman Jan Schakowsky, Washington Congressman Jim McDermott, New York Congresswoman Yvette Clarke and California's Jerry Nadler, Barbara Lee and Judy Chu have proposed the “Balancing Act” alternative to across-the- board cuts that would damage society and the economy.

The group’s “Balancing Act” legislation:

* cancels the across the board “sequester” budget cuts that are now looming

* achieves a fair and balanced approach to long-term deficit reduction that reduces the burden on working families

* finds needed revenues by requiring that multinational corporations pay their fair share of taxes

* makes $300 billion in judicious long-term cuts to Pentagon waste

* creates 1 million jobs nationwide by investing in infrastructure and teachers and putting money in consumers’ pockets

“We’ve cut non-defense budgets to the bone,” says Grijalva. “There are simply no major savings hiding in school lunch or nurse training programs. We need investments. The Beltway refusal to make job creation our number-one priority is a scandal, and the Balancing Act is the right way to fix it.”

The House Democrats who have the Balancing Act achieve their goals—which mirror the goals of the American people, as expressed in every major poll—by eliminating the impending “sequester” cuts (which would fall disproportionately on working families and Americans living in poverty) and replaces them with an equal amount of revenue by closing corporate and individual tax loopholes.

This, they explain, will created an equal overall cuts-to-revenue balance when looking at the budget beginning in 2011, when the Budget Control Act was passed. That will free up resources for the sort of job creation that will help families and communities while spurring the economic growth that will ultimately balance federal, state and local governments.

That’s the real alternative to austerity.

President Obama does not have to embrace the Balancing Act in its entirely. But he should make its basic premises part of his State of the Union Address, and his governing agenda.

The president, Democratic leaders in the Senate and House and responsible Republicans should recognize the importance of adopting those premises—not for political reasons, but because austerity doesn’t renew the economy or help people get jobs. Growth does.

Watch John Nichols break down Bill Clinton's recent speech to Congressional Democrats. 

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