Double Whammy: Grim Jobs Picture, Horrible “Grand Bargain”

Obama Cuts Social SecurityWhat unfolded in the corridors of power in the nation’s capital last week portends a serious blow to the interest of country’s working people and it came hard from two directions.

“First, a terrible jobs report, then a Democratic President offers a budget that proposes cuts to Social Security and Medicare,” wrote Dave Johnson of the Campaign for America’s Future. “The only thing on the public’s mind is that we need jobs – and the President comes out with a plan to cut Social Security and Medicare. Is he telling the public that cuts to Social Security and Medicare are necessary to restore the economy and fix the jobs crisis? Because whatever the administration thinks it is doing, that is what the public will hear.”

What they actually heard was Austerity 2013 – U.S. style. President Obama’s offering up a cut in Social Security (make no mistake, that’s what it is) contravenes promises he has previously made about not undermining the program and a recent flat out pledge by Vice-President Joe Biden that it would not happen.

One unnamed “senior administration official” told a briefing last week, “The president has made clear that he is willing to compromise and do tough things to reduce the deficit, but only in the context of a package like this one that has balance and includes revenues from the wealthiest Americans and that is designed to promote economic growth. That means that the things like CPI that Republican leaders have pushed hard for will only be accepted if congressional Republicans are willing to do more on revenues. This isn’t about political horse-trading; it’s about reducing the deficit in a balanced way that economists say is best for the economy and job creation. That’s why the president’s offer – which will be reflected in his budget – isn’t a menu of options for them to choose from; it’s a cohesive package that reflects the kind of compromise we should be able to reach.”

Not “political horse-trading”? You could have fooled me. No one even maintains that the “chained CPI,” is going to reduce the federal budget deficit. It’s a chit the President has put on the negotiating table.

It’s irritating when political pundits come up, as Josh Voorhees did the other day at Slatest.com, with various versions of: “Most notably, that means significant cuts to Social Security and Medicare, and fewer tax hikes than he’d like – neither of which will please the left.” Why? Because the “grand bargain” being concocted in Washington is not between the right and the left, or between the Republicans and the Democrats. It’s between big business (capital) and labor. The losers in this case will be the elderly, orphans, veterans and people with disabilities. Slightly higher taxes on the well-to-do will send not one of them to their local food bank.

“Look, this is compromise,” White House senior adviser, Dan Pfeiffer, said last Sunday. “And compromise means there are going to be some folks on both sides who are not happy.” “Yes, legislative deals require compromise,” economist Robert Reich wrote on his blog last month. “But why is it that deals over economic policy almost always compromise away what a majority of Americans want?”

This is not “everybody doing his part,” as Gene Sperling, assistant to the President for economic policy told the nation the other day. It’s political horse-trading with the welfare of the elderly, orphans, veterans and people with disabilities on the table.

“While cutting Social Security makes no sense at all in terms of economics or public policy, it makes excellent sense in terms of the selfish class interests of the super-rich,” wrote Michael Lind in Salon.com April 5. “They have extracted about half the gains from economic growth in the U.S. in the last half-century and recycle some of their profits to fund politicians, and lobbyists, as well as mercenary propagandists who pose as neutral think tank experts.”

“This morning’s jobs report was a big negative surprise and underscored the fact that a robust jobs recovery, even now, has not yet solidified,” observed Economic Policy Institute economist Heidi Shierholz April 5. “The job growth of 88,000 in March was far lower than the 2012 average increase of 183,000. It is important to keep in mind that the month-to-month numbers can be volatile, however; in this case the first quarter average growth rate is likely a better measure of the underlying trend. But at 168,000 per month, the average growth rate of the first quarter is not even close to what we need – at that rate we would not get back to the pre-recession unemployment rate until late 2019.”

“The unemployment rate ticked down to 7.6 percent in March, but not for good reasons,” continued Shierholz. “The decline is due to people dropping out of the labor force, not an increase in the share of the working-age population with jobs. In fact, the labor force participation dropped to its lowest point of the downturn, 63.3 percent. What’s more, the weak labor force participation is not due to demographic factors like retiring baby boomers; the labor force participation rate of the ‘prime-age’ population, people age 25-54, is also at its lowest point of the downturn, 81.1 percent. It’s the lack of job opportunities – the lack of demand for workers – that is keeping these workers from working or seeking work, not other factors.”

African-American unemployment slipped from 13.8 to 13.3 percent in March and black teen joblessness fell from 43.1 to 33.8 percent. How much of that is the result of black people finding sought after jobs was not immediately clear. However, the labor participation rate for African Americans as a whole remained about the same over the month.

“What’s most concerning about these trends is the prolonged double-digit rates of unemployment for African American, Latino and less-educated workers,” Tamara Draut, Vice President of Policy and Research at Demos and author of Strapped: Why America’s 20- and 30-Somethings Can’t Get Ahead , recently observed. “While much attention has been paid to the challenges facing indebted college graduates who are now much more likely to be working in jobs that don’t require a college degree, the deep and persistent high levels of joblessness and under-employment among young people without four-year degrees (the majority of the generation) is a silent crisis facing our nation. And it demands a robust and national response.”

Regarding the March jobs numbers, Congressional Black Caucus Chair Marcia Fudge said, “The African American unemployment rate fell .5 percent to 13.3 percent, the most it has fallen in six months. However, that number remains at nearly double the national rate with 2.4 million African Americans still out of work.”

“While the private sector has steadily added jobs for 37 months, the public sector, where many African Americans are employed, continued to lose them. Last month, 385,000 more requests for unemployment benefits were made and by year’s end, sequestration threatens to put an additional 750,000 people with full time jobs out of work,” Fudge added.

Daniel Gross, global business editor at Newsweek’s Daily Beast, wrote that he had found a “small potentially optimistic note” in the latest government employment report. A major problem, he wrote is that while the private sector has been recently adding jobs to the economy cutbacks in the public sector have been “holding back the recovery in overall employment,” having eliminated millions of jobs “in part by firing police officers and teachers.”

Gross noted the situation with regards to public sector jobs at the state and local levels, last month: “The federal government cut about 14,000 positions, with most of those coming from the postal service.” “The non-Washington austerity hit to payrolls may finally be coming to an end,” he continued. “That’s the good news. The bad news? The Washington austerity looks like it is just beginning.”

If and when the “grand bargain” being pushed by the White House goes into effect it will make matters even worse.

“The optimist in me sees that yet again we had upward revisions and simply wants to believe that these March numbers are wrong and will be revised upward,” wrote columnist Matthew Yglesias at Slate Moneybox. “But hope is not a plan.”

Nor does anyone seem to have one.

No, that’s not true. There’s the Congressional Progressive Caucus budget that is far more sensible and humane than anything the White House is proposing. But since the “serious” people in Washington don’t cotton to it, the serious mainstream media won’t give it the time of day. Oh, yes, and there’s the President’s Jobs plan, which seems have to have evaporated into thin air.

As Jim Dean, the chair of Democracy for America, said, Obama’s move is a “profoundly disturbing shot across the bow for the progressives who called their neighbors, spent weekends knocking doors and donated millions to reelect [President Obama].”

“With this move, Obama gives progressives one less reason to work for Democrats – and every American citizen one less reason to vote for them,” Progressive magazine editor, Matthew Rothschild, wrote last week.

According to the AARP, its polling says 70 percent of voters age 50-plus are opposed to the chained CPI gambit and two-thirds of them – including 60 percent of Republicans – say they would be “considerably less likely” to support a congressional candidate if he or she supported it. As Solon’s Joan Walsh reported, “On every single question, Republicans lag only a point or two behind Democrats in their opposition to Social Security cuts.”

And, just in case, the Washington plotters are banking on the “grand bargain” being upsetting only to the elderly and people with disabilities, Derek Pugh of Campaign for America’s Future, has an important observation and reminder.

“Remember the catastrophe of 2010, when millennials stayed home in large numbers,” Pugh writes. “Polling data shows that a solid majority of young adults (53 percent) wanted a Democrat-controlled Congress. However, only 20.9 percent of all eligible young people voted in the 2010 midterms. More than half of the people who voted in 2008 (51 percent) shied away from the polls. In the months leading up to November 2014, Democrats will have to try even harder to win the millennial vote. Republicans are already poised to make some headway: note the thousands of young people at the Conservative Political Action Conference a few weeks ago.”

“As the most diverse generation (39 percent are people of color), millennials are more civically engaged, progressive, open to change and tolerant non-meddlers on social issues. Overwhelming, they support same-sex marriage (78 percent), abortion rights (68 percent), and immigration reform (78 percent). Democrats’ stance on social issues are the main draw for young voters.”

“But demography isn’t destiny. It would be suicidal for Democrats to take for granted a group that will comprise almost a quarter of the electorate in 2014. Progressive views on social issues are appreciated, but are not sufficient. The number one priority of millennials and the rising American electorate is still economic recovery – and millennials need to see Democrats being the champions of a recovery that will allow them to rise.”

Carl BloiceLast week, the very perceptive Grio managing editor and MSBC commentator Joy-Ann Reid said the President is probably confident that if he cuts the proposed deal “Nancy Pelosi can deliver the votes in the House and Harry Reid can do so in the Senate.” Precious few of the people the two of them are supposed to represent favor the Social Security Medicare concessions, and they and their colleagues ought to be reminded of that fact.

Carl Bloice
The BlackCommentator

Thursday, 11 April 2013

Published by the LA Progressive on April 11, 2013
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About Carl Bloice

Carl Bloice is a writer in San Francisco, a member of the National Coordinating Committee of the Committees of Correspondence for Democracy and Socialism and formerly worked for a healthcare union.