Fix the Debt 'solution' is bad news for the middle class
Deficits are the result – not the cause – of our economic crisis
There is a saying that “in crisis there is opportunity,” and Wall Street and big corporations are taking that to heart as negotiations over how to address the “fiscal cliff” heat up.
Major players on Wall Street have sought to turn the negotiations to their advantage by selling “solutions” to the fiscal crisis that reward their own interests, while saddling everyday people with the bill.
One of these players, the Campaign to Fix the Debt, presents itself as a grassroots, bipartisan organization that is committed to lowering our debt. It sounds good, especially in today’s environment of extreme partisanship and political maneuvering.
Yet Fix the Debt’s major contribution to the conversation over the fiscal cliff is that while the George W. Bush tax cuts for the wealthy and corporations should be off the table, Americans’ retirement security and health care most definitely should be.
The Fix the Debt corporations that are publicly held stand to gain as much as $134 billion in windfalls from this new corporate tax break. And Fix the Debt is prepared to spend up to $60 million to get its way.
Fix the Debt’s advisory board is a virtual who’s who of Wall Street and Big Business. It includes the managing director of Bain Capital, the firm where Mitt Romney made his millions liquidating companies and sticking them with the bill.
Its advisory board includes leaders from 35 financial services firms, such as Goldman Sachs, Morgan Stanley and JP Morgan – some of the same corporations that drove our economy into the ground in 2008 and then took millions of dollars in federal bailouts. The CEOs backing Fix the Debt also took home $41 million in savings last year thanks to the Bush tax cuts.
One of the leading figures behind Fix the Debt – Lloyd Blankfein of Goldman Sachs – is demanding that we “lower people’s expectations” about their retirement and health care.
It is unfair to put programs like Medicare, Medicaid, Social Security, unemployment insurance and other safety nets for our middle class on the table, if groups like Fix the Debt are cooking up what amounts to yet another Wall Street giveaway.
Deficits are the result – not the cause – of our economic crisis. High unemployment, household debt, stagnant wages and a towering trade deficit all weaken middle-class buying power. These are our most urgent problems. Budget cuts only will make them worse.
We can avert the fiscal crisis easily – by agreeing to extend tax cuts for the middle class, continue unemployment benefits for another year, cancel the across-the-board budget cuts scheduled for January, and replace the expiring payroll tax cut with a refundable income tax credit.
We do need to address the deficit – and the most effective way to do that is to develop a high-wage strategy for shared prosperity in our country. We can make that a reality by addressing economic inequality, fueling consumer demand, shrinking our bloated financial sector and making things in America again.
Solving the crisis of the fiscal cliff matters, but it matters even more how we do it. We should not force New Hampshire families and seniors who have played by the rules to pay for the party that Wall Street millionaires didn’t invite us to.
Mark MacKenzie is president of the New Hampshire AFL-CIO.