The People's Budget

By Robert Reich, Robert Reich's Blog

17 May 11

The battle is squared, and why we need budget jujitsu.

echnically, the federal government has now reached the limit of its capacity to borrow money.

Raising the debt ceiling used to be a technical adjustment, made almost automatically. Now it's a political football.

Democrats should never have agreed to linking it to an agreement on the long-term budget deficit.

But now that the debt ceiling is in play, there's no end to what the radical right will demand. John Boehner is already using the classic "they're making me" move, seemingly helpless in the face of Tea Party storm troopers who refuse to raise the ceiling unless they get their way. Their way is reactionary and regressive - eviscerating Medicare, cutting Medicaid and programs for the poor, slashing education and infrastructure, and using most of the savings to reduce taxes on the rich.

If the only issue were cutting the federal deficit by four or five trillion dollars over the next ten years, the President and Democrats wouldn't have to cave in to this extortion. That goal can be achieved by doing exactly the opposite of what radical Republicans are demanding. We can reduce the long-term budget deficit, keep everything Americans truly depend on, and also increase spending on education and infrastructure - by cutting unnecessary military expenditures, ending corporate welfare, and raising taxes on the rich.

I commend to you the "People's Budget," a detailed plan for doing exactly this - while reducing the long-term budget deficit more than either the Republican's or the President's plan does. When I read through the People's Budget my first thought was how modest and reasonable it is. It was produced by the House Progressive Caucus but could easily have been generated by Washington centrists - forty years ago.

But of course the coming battle isn't really over whether to cut the long-term deficit by trillions of dollars. It's over whether to shrink the government we depend on and to use the savings to give corporations and the super-rich even more tax benefits they don't need or deserve.

The main reason the "center" has moved so far to the right - and continues to move rightward - is radical conservatives have repeatedly grabbed the agenda and threatened havoc if they don't get their way. They're doing it again.

Will the President and congressional Democrats cave in to their extortion? When even Nancy Pelosi says "everything is on the table" you've got to worry.

We can fortify the President and congressional Democrats and prevent them from moving further right by doing exactly what the Tea Partiers are doing - but in reverse.

Call it budget Jujitsu.

The message from the "People's Party" should be unconditional: No cuts in Medicare and Medicaid or Social Security. More spending on education and infrastructure. Pay for it and reduce the long-term budget deficit by cutting military spending and raising taxes on the rich. The People's Budget is the template.

But what if the President and Dems show signs of caving? This is the heart of the progressive dilemma. Are we prepared to say no to raising the debt ceiling if our demands aren't met? That way, the responsibility for rounding up the necessary Republican votes shifts to Wall Street and big business - arguably more eager to raise the debt ceiling and avoid turmoil in credit markets than anyone else. They're also better able to push the GOP - whom they fund.

Which leads to a more basic question: Are we ready and willing to mount primary challenges to incumbent Democrats who cave?

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including "The Work of Nations," "Locked in the Cabinet," "Supercapitalism" and his latest book, "AFTERSHOCK: The Next Economy and America's Future." His 'Marketplace' commentaries can be found on publicradio.com and iTunes.