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Bipartisan Budget Deal Secures Austerity Policies, Fails to Extend Unemployment Benefits

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Ryan-Murray bipartisan budget deal would not extend unemployment insurance for 1.3 million Americans, while maintaining $100 billion a year sequestration cuts after 2015.


JESSICA DESVARIEUX, TRNN PRODUCER: The budget deal is being celebrated as a symbol of bipartisanship. The lead budget architects from both parties, Democratic senator Patty Murray and Republican congressman Paul Ryan, are touting their agreement as providing Americans with certainty in Congress, which has an approval rating in the single digits.

REP. PAUL RYAN (R-WI), CHAIRMAN, HOUSE BUDGET COMMITTEE: All along I thought it was very important that we do what we can to show that this divided government can work. And by doing this, we are showing that this divided government can work at its basic functioning levels, which is paying the bills. Both Republicans and Democrats think it’s important that Congress retains the power of the purse and that we set priorities on spending.

DESVARIEUX: But what exactly are the priorities in this budget deal? The Bipartisan Budget Act funds the government through the fall of 2015. For the year 2014, it would be $1.012 trillion. That’s the midpoint between either side’s proposed budget. The 2014 budget would also provide $45 billion in relief to the $109 billion scheduled sequestration cuts.

Remember sequestration, those automatic across-the-board spending cuts to both the military and domestic programs which came out to $1.2 trillion dollars over ten years? Under the Ryan-Murray plan, cuts don’t disappear, but they are less severe. At the end of the day, that means the deal would only replace less than half of the total sequestration cuts in 2014 and a much smaller share in 2015. So, instead of the government cutting about $100 billion from discretionary spending in 2015, it would now be cutting about $80 billion. That affects programs ranging from Head Start to medical research. Then cuts will go back to $100 billion a year and stay there after 2015.

Executive director for National Priorities Project Jo Comerford says, with austerity policies, Democrats and Republicans have been able to find some common ground.

JO COMERFORD, EXEC. DIR., NATIONAL PRIORITIES PROJECT: So in a sense what this deal does is it cements in the notion that we’re in this austerity framework, the notion that sequestration and/or deficit reduction, which is really the end, you know, the end aimed for in sequestration, deficit reduction or austerity or smaller government—. Now let’s really build a budget that represents interests of the American people. This budget doesn’t do that. It doesn’t nearly go far enough.

DESVARIEUX: Comerford adds that where the deal doesn’t go far enough is in reducing military spending.

COMERFORD: Our Pentagon spending is vastly larger than the rest of the world’s. In fact, we’re more than the next 15 nations combined in terms of the magnitude of our spending. Between 2001 and 2011, we saw a 48 percent increase in Pentagon spending, you know, so huge leaps forward, much driven by the U.S. wars in Iraq and Afghanistan, but not exclusively.

So what’s interesting to us is that there is bipartisan agreement in Congress that the Pentagon is one of the places that we could, if we wanted to, if we had the will, we could look to cut spending and still leave our nation more secure. You know, folks in the Pentagon, and actually folks on the left, folks on the right, talk about the 21st-century security threats or threats to security. They’re not answered by the F-35. They’re not answered by nuclear weapons. They’re not answered by other Cold War relics that we keep paying huge sums for.

So what’s interesting in this budget deal is that it actually adds $23 billion back to the Pentagon, which is actually itself not able to track where the money is going. And it does so in a climate where there’s bipartisan support for cutting Pentagon spending, and then in a nation where the majority of Americans would like to see, actually, cuts to the Pentagon spending of 18 percent or more if they had to make a choice.

DESVARIEUX: On December 10, activists gathered on the Hill to make sure that Congress chooses to support the most vulnerable communities. They went to Congressman Ryan’s office to deliver letters and petitions asking Congress to cut the military budget and support domestic needs.

JILL STEIN, GREEN PARTY CANDIDATE: So we’re asking for the military budget to be cut by 25 to 50 percent and for us to fully fund human needs, including health care as a human right under a Medicare-for-all system, education through college, which should be a public right, and to create a jobs program.

DESVARIEUX: On the Hill, Progressive Democrats have argued for similar budget priorities, like cutting the military spending and cutting corporate tax loopholes. But despite the fact that the Murray-Ryan deal does neither, there are some Democrats saying that they’ll likely support the bill, but for different reasons.

REP. JIM MCGOVERN (MA-D): I’m leaning toward voting for it at this particular point because it begins to, you know, chip away at sequestration. You know, the needle’s starting to move in the right direction—not where I want it to be, but, you know, it will alleviate some of the terrible impacts of sequestration next year, which means that fewer kids will lose Head Start, there’ll be more money for NIH. I think there should be deeper cuts in the military. I think that the fact that unemployment insurance is not part of this deal is unconscionable.

But, you know, I’m still kind of going through all the details. But, you know, it’s better than the status quo.

DESVARIEUX: Some argue that the status quo is still very much a part of this deal. There will be no cuts to mandatory spending like Social Security and Medicare, and there will be no closing of tax loopholes for corporations or an increase on income taxes for the wealthiest Americans who earn $250,000 or more, which according to an AP report is one in five American households.

Interestingly enough, the people who will be paying more are air travelers. If passed, you would pay an additional $5 surcharge to TSA next time you book a flight. Also, federal employees and military veterans will have to contribute more to their pensions. These policies are seen as two ways to increase revenue.

But according to a recent poll conducted by Americans for Tax Fairness, 67 percent of Americans want to see a closing of corporate tax loopholes and an increase on taxes for the wealthy.

The Real News asked Congressman McGovern, since this deal does neither, does the bill serve the interests of the majority of Americans?

MCGOVERN: If we can, you know, increase the NIH budget so we can support research programs to find a cure to Alzheimer’s or Parkinson’s disease, that’s in our interest. You know. You know. If we can make sure we don’t cut education as severely as the sequestration budget does, that’s in our interest.

So, look, you know, you fight the good fight and you fight as hard as you can, but at the end of the day, you know, you have to come up with a finished product. And I think the question is, no product would mean that sequestration continues as is. And I think that that’s unconscionable. I think—and that’s—we can’t do that.

DESVARIEUX: Economist Bill Black agrees that any step to scale back sequestration is positive, but it certainly isn’t perfect. He notes that conservatives are more likely to be vocal about their dissatisfaction over the deal than progressives.

BILL BLACK, ASSOC. PROF. ECONOMICS AND LAW, UMKC: And the administration, of course, has emphasized this as well. It has acted like it’s a complete betrayal every time the progressives try to hold the Obama administration to traditional Democratic policies. Right? And so, instead you could view it as the Obama administration betraying the traditional Democratic policies that have been A) very successful economically and B) have been enormously successful politically.

So, you know, people like me think the Obama administration have blundered, and blundered in ways that hurt the nation as well as their own Democratic party. So I agree.

But, you know, this is how different the right and the left are. In the Republican Party, all the attention is paid to making the most conservative Republicans happy. In the Democratic Party, for the last two presidents, the Clinton administration [and the] Obama administration, all of the emphasis is on deriding and making fun of the base and celebrating the most conservative wing of the Democratic Party, and in particular, of course, the Wall Street wing of the Democratic Party.

DESVARIEUX: The House is likely to vote on the Paul-Murray budget deal by the end of the week, considering the House will be going on vacation.

What has not been scheduled for a vote is an extension of unemployment benefits for the 1.3 million Americans who will lose their benefits after Christmas if no extension is passed. But the House will be voting to relieve physicians from scheduled cuts in the Medicare payment rate.

The blueprint budget is being fast-tracked for fear of another potential government shutdown on January 15. But Comerford says that this rushed process undermines democracy.

COMERFORD: This budget resolution that we just got out, you know, the blueprint, this was supposed to be done in March or April of last year. So the fact that we’re doing it now in December is unconscionable. And it can’t be done this way again, because Americans can’t weigh in properly. This was a backdoor closed-door deal. And we can’t let this 15th budget go the same way. That’s what I would say.

DESVARIEUX: For The Real News Network, Jessica Desvarieux, Washington.

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