Raw Deal

By Robert Reich, Robert Reich's Blog

12 December 13

bout the only good thing that can be said about the budget deal just patched together by House Republican budget chair Paul Ryan and Senate Democratic budget chair Patty Murray is that the right-wing Heritage Foundation and the Koch brothers' Americans for Prosperity oppose it.

But that doesn't mean it's a good deal for the country. In fact, it's a bad deal, for at least three reasons:

First, it fails extend unemployment benefits for 1.3 million jobless who will lose them in a few weeks. These people and their families are still caught in the worst downturn since the Great Depression.

Almost three Americans are jobless for every job that's available - a ratio worse than it was at the bottom of the last downturn.

Moreover, the nation still harbors an unprecedented number of long-term unemployed. In past recessions emergency benefits continued until the rate of long-term employment hovered around 1 percent or less. But the current level of long-term unemployed is 2.6 percent.

The second reason this deal is bad is it contributes to the nation's savage inequality. The deal doesn't close a single tax loophole for wealthy, and it doesn't restore food stamps to the poor.

Third, the deal makes no fiscal sense. It's topsy-turvy: The deal contains no short-term stimulus, and does nothing about the long-term deficit.

Although the deal overrides the dread "sequester" that mindlessly cuts domestic spending (except for Social Security, Medicare, and Medicaid), it doesn't put an end to the sequester. It merely postpones the sequester for two years.

The deal does remove the threat of another government shutdown January 15, when the stopgap spending resolution that reopened the government in October runs out. But it doesn't prevent another standoff over the debt ceiling next March when the borrowing authority of the government is exhausted.

I can understand why Republican leaders like this deal. They don't want to risk another government shutdown, given how badly they got burned by the last one earlier in the fall. As the midterm elections loom, they'd rather keep attention focused on whatever they can find that's wrong with the Affordable Care Act - or, more accurately, whatever trumped-up charge they and their megaphones at Fox News and yell radio can bring against the Act.

But America would do better with another temporary spending resolution than with this raw deal.

On hearing of the deal yesterday, President Obama said, "that's the way the American people expect Washington to work." Sadly, he was not being ironic.

Robert B. Reich, Chancellor's Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers "Aftershock" and "The Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.