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Congress Chooses Austerity Over Job Creation and Economic Growth | The Nation

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John Nichols

John Nichols

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Congress Chooses Austerity Over Job Creation and Economic Growth

US Capitol

(AP/Pablo Martinez Monsivais)

Most members of Congress were pleased with themselves Thursday.

They agreed to agree—crossing lines of partisanship and ideology—on an austerity budget that, as Oregon Congressman Peter DeFazio has noted, “won’t create jobs, get the economy back on track, or meaningfully cut the deficit.”

That’s not the worst of it.

“At the end of the day, the bill abandons 1.3 million Americans who desperately need unemployment insurance, and does nothing to promote economic growth or job creation,” Congressman Mark Pocan, D-Wisconsin, explained Thursday. “Furthermore, the legislation is paid for on the backs of the middle class and military families, while not touching the wealthiest amongst us and allowing corporations to continue to benefit from tax loopholes.”

Pocan and DeFazio could not bring themselves to back the deal.

But they were outliers, two of the thirty-two Democrats who voted no, along with sixty-two Republicans.

The vast majority of House members—from both parties—backed the deal, which prevailed on a 332-94 vote.

So where does that leave America?

Let’s turn to National Nurses United, a union that parts company with both major parties on questions of public welfare, for a diagnosis.

“There is no reason to cheer an agreement that requires unwarranted pension cuts for federal workers, including VA nurses who earned that pension, underfunds nutrition programs and fails to extend assistance for the long-term unemployed,“ says union co-president Jean Ross, RN.

NNU refused to get on board for the bipartisan deal that takes the worst ideas of Wall Street–aligned Republicans and puts a Democratic stamp of approval on them.

Why? Because they understand the agreement—which was developed by a conference committee on which House Budget Committee chair Paul Ryan, R-Wisconsin, played a defining role—as an expression of the austerity agenda that has stalled economic recovery and job growth in the United States and abroad.

“Austerity budgeting, reflected in this latest deal, continues the disturbing focus by politicians in both parties in Washington, who should be fighting for jobs at living wages, restoration of the disgraceful cuts in food stamps, healthcare for all, housing assistance, and other human needs, not simply how to please Wall Street and the banks,” says NNU’s Ross. “For our patients and our communities, it is past time to replace cuts for workers with revenues from Wall Street to revive Main Street.”

There was a time when austerity budgeting was accepted as valid—or, at least, necessary—to addressing the circumstance of countries where deindustrialization and economic setbacks have caused revenue shortfalls. But, in recent years, The Economist, the Financial Timesand the International Monetary Fund have recognized that austerity agendas based on in budget cuts and a failure to invest in infrastructure and development tend to lock in patterns of high unemployment and slow growth.

Countries fall into dysfunctional patterns, making cuts that lead to more cuts, and this stalls job creation, reduces labor-force participation and makes recovery more difficult. It is, as economist Paul Krugman suggests, an “awesomely destructive” pattern.

Congress should get this by now. Unfortunately, as an analysis from the budget analysts at the Campaign for America’s Future notes, “Somehow Washington has failed to get the message. This deal doesn’t end the cutting; it only reduces its severity. It doesn’t generate jobs; it only cuts fewer of them. It doesn’t help the economy; it only reduces the harm to it. Surely we can do better than that.”

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The nurses have an idea for how to do better. The union wants a Robin Hood Tax on high-stakes Wall Street trading—particularly speculation in stocks, bonds, derivatives and currencies. This tax is outlined in legislation developed by Congressman Keith Ellison, D-Minnesota, who proposes “a small tax on Wall Street transactions to meet the needs of our nation.”

Ellison voted against the budget deal Thursday, saying: “The budget deal passed today is a compromise—it compromises the financial security of federal employees, the long-term unemployed and working families…. This is a case where ‘compromise’ in Washington means asking Americans to sacrifice more.”

The nurses agree.

“The sham of the present debate in Washington, DC, is that real fiscal solutions to slow growth and high unemployment, hunger, disease and poverty exist, but have been taken off the table by lobbyists for Wall Street,” says Ross. “It’s time Congress proves to the American people that Wall Street doesn’t run our government.”

Read Next: John Nichols lays out what makes this a “cruel, irresponsible” budget deal.

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