Citizens' Commission on Jobs, Deficits and America's Economic Future

When health care reform was signed into law, President Barack Obama correctly described it as "biggest deficit reduction plan since the 1990s." In fact, the Congressional Budget Office projected it would save more than $1 trillion during the next two decades. more »

In general, macroeconomic policies cut two ways on inequality — one via effects on economic activity, which if favorable, can reduce inequality by creating more jobs and raising wages, and the other through effects on the stock market, which can make inequality worse if stock prices rise.

Thus in the 1990s the technology boom reduced inequality by increasing employment and low-end wages, while the NASDAQ bubble drove up incomes for a few. The second effect dominated the statistics, but the first dominated the experience most working people had: it was a good time.

The premature and excessive deficit-cutting plans now being framed will almost surely hurt working and retired Americans: they will increase unemployment, decrease hours and overtime, place downward pressure on wages, and in all these ways make low-income workers worse off.

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The following was originally published at Politico.

"The era of deficit denial is over," crowed former Sen. Alan Simpson, the garrulous co-chair of President Barack Obama's deficit reduction commission. But the debate about what is to be done has just begun. Simpson likes to describe his position as the center against ideological extremes, reason against the "greediest generation."

Matt Bai in The New York Times Wednesday says Obama must choose between "centrist reformers" and the "traditional liberals," who resist change. But the choice is better described as between a developing Beltway establishment consensus and the vast majority of the Americans.

On jobs, austerity, Social Security and Medicare, tax reform and where to cut spending, most Americans don't support the proposals of the deficit commission co-chairs, which are echoed in other inside-the-beltway elite reports from the Bipartisan Policy Center and the Pew-Peterson Commission. In fact, popular support for a road to fiscal balance and national revival may be best reflected in a group of liberal responses – laid out by Rep. Jan Schakowsky (D-Ill.), a member of the deficit commission; the Campaign for America's Future Citizen's Commission Report, and a detailed plan from three progressive policy groups, Demos, the 21th Century Fund and the Economic Policy Institute.

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The co-chairs of the Presidential Deficit Commission released the final draft of their report today, and it's now scheduled for a Friday vote by members of the Commission. We're being told that it's a fairer and more reasonable document than its predecessor. It's nothing of the kind. In many ways this document is worse than the draft that preceded it, and those much-lauded "compromises" evaporate in the cold light of reality. This new draft is lipstick on a piggy-bank robber, a package of cosmetic changes meant to disguise its true purpose: To raid the future financial security of most Americans in order to benefit a few.

This proposal would still cripple government's vital role in society by imposing arbitrary limits on spending. It would still place great financial burdens on lower- and middle-class Americans while easing those of the wealthy. All in all, it's the most profoundly right-wing policy prescription the nation has seen in decades. Democrats who lack the political courage to oppose it will be remembered for it for a long time to come.

There are more balanced and effective ways to balance the budget. Instead, this plan is so ideologically driven that it actually increases the deficit at times, while the reductions it does achieve are needlessly unfair and destructive. Here are ten reasons why this proposal remains unacceptable and must be opposed - not just by progressive or Democrats, but by anyone of good conscience who wants to reduce the deficit in a responsible way: more »

The co-chairs of the White House National Commission on Fiscal Responsibility and Reform released its deficit-reduction ideas earlier today, and a range of progressive leaders are united in saying its proposals, particularly on Social Security, should be rejected outright. more »

It's come to this: At a strange and bitter press conference this afternoon (where they even accused their opponents of "racism"), the co-chairs of the Presidential Deficit Commission laid out a proposal that literally meets the dictionary definition of extremism. They've apparently rewritten the Executive Order creating their Commission, too, so if enough Commission members back their proposal it could become law. That would spell long-term defeat for the Democratic Party. More importantly, it would create misery for generations to come.

The only four people who can prevent this disaster are the four Democratic members of the Deficit Commission who have yet to stake a clear position on this proposal: Sen. Kent Conrad, Sen. Max Baucus, Sen. Dick Durbin, and Rep. Xavier Becerra. They need to hear from intelligent, sober-minded people who will encourage them to take a brave stand against these destructive ideas. (Their phone numbers are below.) more »

Members of the Citizens' Commission on Jobs, Deficits and America's Economic Future formally released their report earlier today with a declaration that the commission created by the White House to come up with a deficit-reduction plan is poised to make the economy worse. more »

On Wednesday, the White House deficit commission is expected to take a final vote of the recommendations of its co-chairs Alan Simpson and Erskine Bowles. Then the battle for public opinion really begins. more »