John Nichols | The Nation

“Fix the Debt” bankroller Pete Peterson. (Reuters/Jason Reed)

There is a great deal of talk about how Republican senators have gone off the rails in their opposition to the nomination of former Senator Chuck Hagel to serve as Secretary of Defense. And there have been some bizarre deviations, with senators making pronouncements based on internet rumors and unfounded speculation.

But none of the fantastical filibustering of the Hagel fight can compare with the delusional dialogue regarding the federal budget.

To hear the billionaire proponents of austerity tell it, America is teetering on the brink of economic ruin. America, we are told, is broke. And the only answer is to “Fix the Debt” with deep spending cuts followed by the radical reordering of Social Security, Medicare and Medicaid.

But America is not broke.

America has broken priorities.

That’s what the billionaire proponents of cuts-at-any-cost economics won’t acknowledge as they advance a “Fix the Debt” agenda that imposes austerity on everyone else, while stacking the deck in their favor.

It is vital to understand that there is an economically and socially viable alternative to austerity cuts. It’s a growth agenda that addresses waste, fraud and abuse while finding new revenues to invest in job creation, education and expansion of access to healthcare.

The growth agenda, as proposed in the “Balancing Act” advanced by leaders of the Congressional Progressive Caucus, asks billionaires to pay their fair share in order to expand employment and opportunities.

The austerity agenda asks everyone but the billionaires to pay: via cuts not just to benefits and services but to jobs.

The anticipated March 1 sequestration, which proposes across-the-board cuts, is an example of austerity.

It continues a two-year-long process of slashing federal programs that are of value to Americans.

But it demands nothing new of billionaires and corporations that are on the winning end of rapidly expanding income inequality.

If we have learned anything from cuts in Europe it is that with austerity comes unemployment.

Even Barack Obama’s critics tend to shy away from arguing against the reality that the president was right when he said: “These cuts are not smart, they are not fair, they will add hundreds of thousands of people to the unemployment rolls. This is not an abstraction. People will lose their jobs. The unemployment rate might tick up again.”

The only place for quibbling is with the word “might.”

Austerity, in the form of the sequestration of federal spending that is set to begin March 1, will result in job losses.

Austerity in the the form of a renewed push by Alan Simpson, Erskine Bowles and the billionaire-backed “Fix the Debt” campaign to assault Social Security, Medicare and Medicaid, has the potential to lead to even more significant job losses.

How many jobs? The most hopeful estimates begin in the range of the 700,000 losses predicted by the Macroeconomic Advisers research group. But they could go much higher, according to an October report to Congress by the Congressional Research Service.

But the sequestration is not the worst of it.

The sequestration is the start, not the finish, of a process that undoes economic recovery and causes job losses to spike by even greater numbers.

Simpson and Bowles are back, promoting schemes such as “chained CPI,” the slashing of cost-of-living increases for Social Security recipients that will squeeze the buying power of seniors and people with disabilities and further impede economic growth.

That will cost even more jobs. And why?

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In the case of the sequestration fight, to preserve tax loopholes that benefit millionaires and billionaires and multinational corporations that shift jobs overseas.

In the case of Simpson-Bowles, to lower top marginal tax rates that benefit millionaires and billionaires and multinational corporations that shift jobs overseas.

This is what austerity is all about: exploiting fiscal challenges in order to redistribute the wealth upward.

Louis Brandeis argued in another era of wrangling over economic and fiscal policy: “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”

Today we may say, extending upon the wisdom of Justice Brandeis, that “we must make our choice. We may have a measure of economic democracy and with it job growth, or we may have austerity with the purpose of further concentration of wealth in the hands of a few, but we can’t have both.”

Sequestration? How about ending childhood poverty, Greg Kaufmann asks. 

Debbie Halvorson chats it up at a farmer's market in Bloomington, Illinois. (Flickr/Gemma Billings)

Chicago—Most countries take special elections to fill vacant seats in their national legislative chambers far more seriously than does the United States.

In Britain, in particular, off-the-clock “by-elections” are recognized as testing grounds not just for candidates and parties but for issues. They are thoroughly covered by the media and often treated as mini-referendums that can send powerful signals regarding hot-button policy debates.

American media outlets and pundits are less inclined toward that sort of analysis. But a crucial Democratic primary to fill a vacant Illinois US House seat is shaping up as test that could well meet the “by-election” standard when it comes to providing an indication of popular sentiment. This race will test the question of whether ties to the National Rifle Association have become politically toxic among Democrats. Of course, it is not the only test, or even the perfect one, as this is an predominantly urban and close-in surburban district. Many of the Democrats who have NRA ties—or who try to walk a middle line with regard to its demands—represent districts and states that are more rural and have strong hunting traditions. But the dynamics in this race, and the moment at which it is playing out, have the potential to send a message of consequence.

Timing is everything when it comes to the question of whether a special election serves as a mini-referendum, as Republicans learned when they lost a historically Republican seat in upstate New York during the 2011 debate over Congressional Budget Committee chairman Paul Ryan’s schemes to assault Social Security, Medicare and Medicaid.

And the timing of this primary contest makes it a big deal, as there are still many Democrats who, even after the horrific Newtown slayings of December and the January killing of Chicago high school student Hadiya Pendleton just days after she performed at President Obama’s second inaugural, seek to play the margins on the gun debate.

Illinois’s 2nd congressional district, which takes in Chicago’s southeast side and the city’s south suburbs, will fill the seat vacated by the resignation of Congressman Jesse Jackson, Jr. The district is overwhelmingly Democratic. A majority of the voters are African-American, as are most of the seventeen candidates competing in the Democratic primary to replace Jackson. But one of the leading contenders, former Congresswoman Debbie Halvorson, is a white Democrat who represented a nearby district before losing to a Tea Party Republican in 2012.

In the 2012 Democratic primary, Halvorson challenged Jackson but won only 29 percent of the vote. At least one January poll suggested she was attracting about the same level of support this year. However, as a former congresswoman running in a crowded Democratic field, she is seen as a serious contender.

This is where the “by-election” measure comes in.

Halvorson has a history of working closely with the National Rifle Association, and received NRA endorsements in her 2008 and 2010 races, winning special praise for her vote to allow concealed weapons in national parks. In this race, Halvorson has tried to distance herself from the NRA, yet she continues to oppose many gun-control proposals, including an assault weapons ban.

One of Halvorson’s opponents, former state representative and current Cook County (Chicago) Chief Administrative Officer Robin Kelly, has done everything in her power to make the election a referendum on the gun issue.

Kelly’s media campaign is all about the issue, which is a critical one in a district that has mourned many of the deaths that have made the Chicago area a focus of debates about how to address America’s staggering rate of firearms deaths.

“Help me fight gun violence,” declares Kelly, who is running on “Robin’s Pledge,” a five-point commitment to:

1. Pass a comprehensive ban on assault weapons.

2. Eliminate the gun show loophole.

3. Never receive support from groups that oppose reasonable gun safety legislation.

4. Ban high capacity ammunition magazines.

5. Support laws that prohibit conceal and carry permits.

Kelly is no newcomer to the issue. A decade ago, as a newly elected Illinois legislator, she sponsored legislation to reduce gun violence by banning straw purchases of firearms. It was co-sponsored by then–Illinois State Senator Barack Obama.

Obama, who made the gun issue central to his 2013 State of the Union Address and to a recent visit to Chicago, is not backing anyone in the Illinois special election. But a number of top Democrats, including Illinois Congresswoman Jan Schakowsky and Congressmen Bobby Rush and Danny Davis, have taken the rare step of entering the race to back Kelly. So, too, has New York Mayor Mike Bloomberg’s Independence PAC, which has spent more than $1.3 million on ads that blister Halvorson for her past ties to the NRA and that highlight Kelly’s candidacy. A Kelly win will provide more evidence that Bloomberg's willingness to move money into races around the country, including Democratic primaries, is redefining the gun debate as it plays out in electoral politics.

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There are other credible candidates in the race, including Chicago Alderman Anthony Beale. But on Sunday, a top contender who had attracted significant labor backing, State Senator Toi Hutchinson, quit the contest and endorsed Kelly.

“I am simply unwilling to risk playing a role going forward that could result in dividing our community at time when we need unity more than ever,” said Hutchinson, a former aide to Halvorson. “In the wake of horrendous gun related crimes all across our country, I agree with Robin that we need to stand together to fight gun violence, but Debbie Halvorson been wrong headed in her refusal to moderate her views on banning dangerous assault weapons.”

No crowded election contest can ever be a pure referendum on a particular issue, especially in a diverse district that faces many challenges. But if Kelly prevails, the result will send a strong signal regarding the ongoing emotional and political power of the gun issue and the extent to which an NRA tie can become a primary problem for Democrats—and some Republicans—who align with the group.

As Sam Kleiner writes, the NRA has reversed its stance on states’ rights.f

(AP Photo)

President Obama was right in his State of the Union Address to declare that “we can’t just cut our way to prosperity.”

Now it is time to act on that understanding that the austerity agenda being promoted by Congressional Budget Committee chairman Paul Ryan and his “Fix the Debt” allies poses a fundamental threat not just to Social Security, Medicare and Medicaid but to essential services that are necessary to economic renewal.

And there is no better place to begin than with a rejection of the plan to dramatically downsize the US Postal Service by curtailing Saturday mail delivery.

Too much of the media coverage of the postmaster general’s announcement that Saturday service will end in August accepted the fantasy that there is no alternative to postal austerity.

There is an alternative.

Congress has the authority—outlined in the Constitution, no less—to preserve Saturday mail delivery and to create a stronger, better Post Office that will maintain vital services in rural communities and central cities across this country.

There is no question that the Postal Service faces financial challenges that threaten its future.

But Congress created most of the problems. And it can fix them.

“While we all understand that the Postal Service is experiencing financial problems today and that changes need to be made as the Postal Service adjusts to a digital world, these issues can be dealt with in a way which strengthens the Postal Service rather than initiating a series of cuts that could eventually lead to a death spiral,” says Senator Bernie Sanders (I-VT).

With Congressman Peter DeFazio (D-OR), Sanders has introduced legislation that will save Saturday service and renew overnight delivery standards while giving the Postal Service a new lease on life.

They do this by coupling a modernization plan with the repeal of the congressional mandate that has caused most of the fiscal woes now facing the USPS.

Sanders and DeFazio correctly note that “the most critical financial reform” for the postal service’s future is their proposal to “rescind an onerous 2006 law pushed through a Republican-controlled House at the behest of President George W. Bush. Unlike any private business or other government agency, the law makes the post office pre-fund seventy-five years of future healthcare benefits for retirees over the course of 10 years. The $5 billion annual payments have been piling up in a fund that experts say already has more than enough in reserve. Since 2007, the pre-funding mandate is responsible for $4 out of every $5 in Postal Service debts.”

“Most of the financial issues facing the United States Postal Service are due to short-sighted actions by Congress,” says DeFazio. “Congress must unshackle USPS so we can deal with these problems and allow the Postal Service to better compete.”

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Rescinding the 2006 law that required the prefunding of benefits will return a measure of financial stability to the USPS. But removing barriers to the Postal Service’s ability to compete is the key to its future.

Sanders and DeFazio would allow the Postal Service to seek new sources of revenue by: (1) lifting legal bans on services such as notarizing documents, issuing hunting and fishing licenses and allowing shipments of wine and beer; (2) clearing the way for the Postal Service to help customers take advantage of e-mail and Internet service; and (3) establishing a commission—composed of business specialists and representatives from small business and labor—to make recommendations regarding strategies for the Postal Service to utilize its infrastructure to compete.

Among the prospects that have been proposed by postal workers and their allies are the restoration of postal banking, which would allow Americans to establish savings accounts at local post offices—as they do in the successful postal banks of other countries (such as Japan) and as was done in the United States until the 1960s. There are also proposals for making post offices hubs for helping Americans—especially those living in rural areas—access federal, state and local public services.

Additionally, the Postal Service can and should be in the forefront of working with state and local election officials to expand postal voting and absentee-ballot programs.

The point of the process is to build on the strengths of a postal infrastructure that is immensely valuable, and that has immense potential to sustain and enhance communities across the United States.

The Sanders-DeFazio plan, which has already attracted substantial support in the Senate and House, rejects the austerity lie that would make keep making cuts until the Postal Service is so weakened that Americans will give up on it—and privatization will become inevitable.

And it begins in the right place: with immediate action to block the deepest cut of eliminating weekend service.

“Providing fewer services and less quality will cause more customers to seek other options,”  says Sanders. “Rural Americans, businesses, senior citizens and veterans will be hurt the most by ending Saturday mail.”

TAKE ACTION: Implore Congress to Reinstate Saturday Delivery.

(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.