Union chief warns of job losses from debt-ceiling deal

The agreement to lift the debt ceiling will lead to job losses, according to the president of the nation’s main public workers union.

Gerry McEntee, president of the American Federation of State, County and Municipal Employees (AFSCME), said the compromise was “economic malpractice.”

“The deal forced upon the White House and the nation represents a form of economic malpractice,” McEntee said in a statement. “At the least, it will slow economic recovery and impose more joblessness, wage cuts and hardship on America’s working families.

But McEntee did not announce opposition to the agreement negotiated by President Obama, and several other labor groups, including the AFL-CIO, were notably silent in the hours leading up to votes Monday in the House and Senate on a deficit-reduction package that would also raise the $14.3 trillion debt ceiling.

The public sector union also is not scoring the vote.

“While our statement expresses major concerns about the deal, we are not taking a position on how lawmakers should vote,” said Chuck Loveless, the union's legislative director.

The deal includes no tax hikes, which unions had demanded as part of a balanced package that would also include spending cuts.

It does allow for possible entitlement reforms, another problem for unions.

Under the agreement, a committee of 12 lawmakers will be created that will be charged with recommending additional deficit-reductions in November.

McEntee said his union would press for that committee to not cut Social Security, Medicare and Medicaid “in order to preserve tax breaks for the wealthy and prosperous corporations.”

McEntee also accused the Tea Party of holding the “nation hostage” to advance its ideology “at the expense of what is good for the nation and our economy.”

As the White House and GOP and Democratic congressional leaders sought votes for the package, a number of unions stayed quiet. Many did not respond to emails from The Hill asking them for their reaction to the compromise.

One union official said labor did not feel pressure to support the debt ceiling deal during calls on Monday with White House officials and Democratic lawmakers, who were busy briefing labor on the agreement.

“They were explaining the agreement. There was no effort to sell it to us and there was no effort by us to convince them to vote against it,” said a union official.

Unions are a key political constituency for Democrats, helping to boost the party’s get-out-the-vote effort come election time. But labor has often been frustrated by Democratic lawmakers in Washington this year as Republicans looked to cut government spending and restrict union rights.

Other unions expressed unhappiness with the deal.

The American Federation of Government Employees (AFGE), a union for federal workers, said the deal would lead to job losses and possibly to cuts to social programs.

“More spending cuts are just around the corner, and this debt deal lays the groundwork for substantial cuts to vital federal programs like Social Security, Medicare and Medicaid,” John Gage, AFGE’s president, in a statement.

“In the meantime, this agreement does nothing to roll back the Bush-era tax cuts that have benefited the wealthiest Americans and corporations.”

Still, an AFGE spokesman said the union was not urging lawmakers to vote no on the deal.

At least one union, National Nurses United called on President Obama to raise the debt ceiling on his own.

“President Obama could avoid this current high wire act by invoking the 14th amendment to raise the debt ceiling, as many have proposed, and start this process over with solutions designed to address the real economic problems facing American families,” said Rose Ann DeMoro, executive director of National Nurses United, in a statement.

A spokeswoman for the National Education Association said the teachers' union was not urging lawmakers to vote against the debt ceiling deal, though they too released a lengthy statement criticizing it.

More in Finance

Rand Paul eyes debt-ceiling fight in Audit the Fed push

Read more »