Nongovernmental Coalition Proposes Alternative Budget Cuts
Wednesday 01 December 2010
by: Nadia Prupis, t r u t h o u t | Report
The Citizens' Commission on Jobs, Deficits and America's Economic Future, a grassroots coalition of labor leaders and economists, on Tuesday released its own recommendations for cutting the deficit.
In a press conference call, the Citizens' Commission recommended spending $1 trillion over the next two years to stimulate the economy and deferring budget cuts until after unemployment has dropped to 5.5 percent.
The Citizens' Commission proposal aims to reach a sustainable deficit of 3 percent of Gross Domestic Product (GDP) through a "gradual reduction in the deficit-to-GDP ratio over the coming decade" fueled by a short-term period of economic stimulus.
Implementing budget cuts too early could prevent future growth even if the economy begins to recover as early as 2015, the Citizens' Commission report states. The target of a 5.5 percent unemployment rate "will enable us to stabilize the level of debt as a proportion of GDP at sustainable levels, because with high employment GDP will be growing faster than the debt."
"One voice has been conspicuously absent from most discussion of deficits - that's of the American people," the report stated. "The public agrees with economists who warn that deficit reduction must be performed judiciously, without restricting government's ability to create jobs and without damaging needed social programs."
Stimulating the economy and investing in sustainable growth for the future are "not just moral imperatives. They are economic prerequisites for successful deficit reduction."
The Citizens' Commission report was endorsed by the Communication Workers of America (CWA) and the Campaign for America's Future, among other labor leaders.
"Most of labor endorses and is totally committed to pushing this report," said CWA president Larry Cohen.
The Citizens' Commission plan is also supported by the Service Employees International Union (SEIU). Following the release of the more austere plan by National Commission on Fiscal Responsibility and Reform co-chairs Alan Simpson and Erskine Bowles, SEIU International president Mary Kay Henry stated, "We cannot balance our budget on the backs of seniors and people who keep our communities safe and healthy, teach our kids, and plow and repair our roads."
Like Representative Jan Schakowsky's (D-Illinois) proposal, the Citizens' Commission report runs contrary to the Simpson-Bowles plan and instead recommends protecting and strengthening Social Security rather than cutting its services.
As the main source of income for most retirees, the report states, Social Security benefits lead to economic growth without adding to the deficit, as it is "prohibited by law from drawing on the general budget." The report calls for an increase in modest benefits and states that Social Security "has played no role in our current deficit."
Echoing its arguments against Social Security cuts, the Citizens' Commission also opposes capping, cutting, or "voucherizing" Medicare or Medicaid. Controlling medical costs should come through the "immediate establishment of a robust public option plan available to all Americans [and] direct government negotiation of drug prices," among other measures.
Robert Borosage, co-director of the Campaign for America's Future, said that the Citizens' Commission hopes its recommendations will become part of the Congressional Progressive Caucus' platform next year. "There will be a lot of pressure from the Democratic base to draw a clear line around Social Security and Medicare and to make sure that the president stays focused on creating jobs and not on austerity," Borosage said.
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