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Big Business, Big Labor agree: Obama’s budget sucks

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Politics,Beltway Confidential,Sean Higgins

The reviews are pouring for President Obama’s budget proposal are flooding in and they are all thumbs down, at least as far Big Business and organized labor are concerned.

Here’s the Chamber of Commerce’s statement:

The Obama budget is months late and trillions of dollars short of what is needed. The budget calls for more spending and more taxation than the CBO baseline. It leaves the debt-to-GDP ratio at 73% ten years from now and is able to achieve this modest gain only by dramatic increases in taxes and economic assumptions that can only be described as optimistic.

What the country needs most is an approach by Washington that expands economic growth, creates jobs, and lifts our entire economy. Unfortunately, the president’s budget expands the government at the expense of American workers, families, and businesses. The never-ending quest for higher taxes will depress growth in the private sector and encourage more irresponsible spending, which will drive our country deeper into debt. Although we appreciate the recognition that entitlement spending is the main driver of our debt and deficits, the budget contains no serious reform to these programs to fit the demographics of the country.  (Emphasis added.)

Businesses need comprehensive tax reform, which means addressing both the corporate and individual sides of the code. Simply raising taxes on individuals and small businesses so that Washington can spend elsewhere has not worked in the past, and will be certain not to work in the future.

AFL-CIO President Richard Trumka, who worked hard to help Obama win a second term, was alternately baffled and disappointed:

A president’s budget is more than just numbers.  It is a profoundly moral document.  We believe cutting Social Security benefits and shifting costs to Medicare beneficiaries – while exempting corporate America from shared sacrifice – is wrong and indefensible.

The administration’s budget cuts cost-of-living increases for current and future Social Security beneficiaries by $130 billion over 10 years, and much more in future years.  It shifts $64 billion in health care costs to Medicare beneficiaries over 10 years.  Yet despite closing some loopholes, it calls for corporate income tax reform that is “revenue neutral” – meaning it fails to ask big, profitable corporations to pay their fair share of taxes.

The Obama budget also continues to demand more sacrifice from federal employees than from Wall Street.  Federal employees did not cause the Great Recession.  They did not cause the deficits that resulted from the Great Recession.  Yet their pay and their retirement keeps getting cut.  Why?

Putting aside the injustice of demanding sacrifice from the innocent while letting the guilty off scot free, the Obama budget falls short of putting our economy on a path towards higher wages and full employment.  As we have said many times, the greatest economic challenge facing America is the jobs crisis, not the deficit.  Yet the administration cuts the part of the budget that pays for investments in worker training and jobs, which has already been cut to its lowest level since the Eisenhower administration, by another $100 billion. This austerity budget is bad economic policy at a moment when the economy remains weak and we urgently need more job-creating investments. (Emphasis added.)

The President’s budget does include several proposals worthy of praise.  It aims to provide universal access to pre-kindergarten programs that are so important to our children.  It strengthens programs to protect workers against wage theft, unsafe workplaces and employer retaliation. It closes the outrageous loophole that allows Wall Street financial managers to pay a special lower tax rate.  And it reforms some of the tax loopholes that allow corporations to get away with shifting profits overseas to avoid U.S. taxes.

Last November, working Americans voted for jobs and growth, not for budget austerity and benefit cuts.  We urge the President to drop these cuts and build support for investing in jobs.

American Federation of Teachers President Randi Weingarten was more positive — perhaps because it spends more on rehiring teachers — but still gave it a bad review overall:

President Obama’s budget lays out a number of critical investments that will put Americans back to work, rebuild the middle class, and strengthen our communities and public schools. But we have serious concerns about any proposal that jeopardizes the Social Security and Medicare benefits seniors, veterans and disabled Americans rely on to get by. Such cuts are irresponsible and untimely, and put our economic recovery at risk. (Emphasis added.)

America is strongest when we live up to our shared responsibility to create good jobs, expand the middle class and ensure that all children have the opportunity to not only dream their dreams, but achieve them. President Obama has issued a bold proposal to provide free, public preschool to every 4-year-old and expand high school opportunities to be more hands-on and more focused on thinking rather than testing, like those at P-TECH (Pathways in Technology Early College High School) in Brooklyn, N.Y. The president’s budget also invests in our public schools and students through proposals to rehire teachers and keep them in the classroom, and to preserve Pell Grants to make college more affordable and accessible. And expanded mental health services will help keep our schools and communities safe and ensure children who need extra support can get what they need.

This moment also requires real investment in putting Americans back to work, and the president has offered tangible proposals to create good jobs while also rebuilding and upgrading our aging infrastructure. And to keep our families healthy, this budget preserves funding for community health centers, strengthens primary care and reproductive health services for low-income women, expands training for healthcare workers, and increases funding for healthcare professionals in underserved areas. The president is also proposing a balanced approach to roll back the disastrous impacts of sequestration and raise revenue by closing loopholes and asking the wealthiest Americans to do their part.

The American people deserve a budget that accelerates our economic recovery and lays the foundation for an economy built on shared prosperity and opportunity. Congress should take immediate action on these critical investments in our children, our schools and our nation while rejecting any cuts to Social Security and Medicare.

 

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Author:

Sean Higgins

Senior Writer
The Washington Examiner