Best deficit-reduction plan? Put Americans back to work

For the congressional supercommittee established by the Budget Control Act to truly succeed, it must define success in terms that really matter to working Americans. I am disturbed by the Washington groupthink that defines success narrowly in terms of maximizing deficit reduction. Members of the supercommittee need to embrace a broader and more powerful definition of success that includes boosting the economy and creating jobs.

After all, the most effective way to reduce the deficit is to help 25 million unemployed and underemployed Americans find jobs and become taxpayers again. There can be no sustained deficit reduction without a recovery of the economy and a return to normal levels of employment. Indeed, on Oct. 4, the Congressional Budget Office released an analysis showing that if our economy were not in recession and employment were at normal levels, the deficit would be reduced next year by an estimated $343 billion —nearly one-third.

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So I have a simple but urgent message to the supercommittee: Go big on jobs! 

Inside the Washington bubble, most have persuaded themselves that the No. 1 issue is the budget deficit. Ordinary Americans are focused on a far more urgent deficit: the jobs deficit. But I am also concerned about a third deficit — the deficit of imagination and vision in Washington today. I am dismayed by our failure to confront the current economic crisis with the boldness that earlier generations of Americans summoned in times of national challenge. 

Our nation remains mired in the most protracted period of unemployment since the Great Depression. Federal Reserve Chairman Ben Bernanke recently described this as a “national crisis.” This is exactly why an exclusive, single-minded obsession with slashing spending and reducing the deficit is not just misguided, it is counterproductive. If the supercommittee cuts the deficit by $1.5 trillion and does nothing to create jobs, this would amount to a massive dose of anti-stimulus. It would further drain demand from the economy and destroy jobs. It’s the equivalent of applying leeches to a patient who needs a transfusion.

We must stop this mindless march to austerity. Smart countries do not just turn a chainsaw on themselves. Instead of the current slash-and-burn approach, which is being sold through fear and fatalism, we need an approach that reflects the hopes and aspirations of the American people. 

To be sure, we must agree on necessary spending cuts and tax increases. But we also must continue to invest in things that will spur economic growth, create jobs and strengthen the middle class, knowing that this is the only sustainable way to bring deficits under control.

I stand with President Obama in support of passing the American Jobs Act, which would dramatically ramp up investments in infrastructure in order to boost U.S. competitiveness and directly create millions of new jobs. Specifically, the bill includes $30 billion to renovate some 35,000 schools and community colleges nationwide, and $50 billion for immediate investment in transportation infrastructure. It also includes $30 billion to help local school districts hire and retain teachers, which would save or create nearly 400,000 education jobs.

How do we pay for these and other investments to keep our teachers in the classroom, to renovate infrastructure and to get our economy back on track, even as we act aggressively to reduce deficits in the long term? In poll after poll — by 2-to-1 margins — Americans favor tax increases on those who can most afford it: those whose incomes have skyrocketed in recent years even as middle-class incomes have fallen.

Some will argue that tax increases of any kind will wreak havoc on the economy. But these assertions are part of the same market fundamentalism, now discredited, that tells us that wealthy people are all so-called “job creators,” and that if we shove enough tax breaks their way, jobs will magically bloom. This is the same old theory of trickle-down economics — and it has never worked. For ordinary Americans, the only things that have trickled down are wage cuts, mass unemployment, upside-down mortgages, personal bankruptcies and disappearing pensions. 

Instead of this failed trickle-down economics for the rich, it’s time for percolate-up economics for the middle class. It’s time to invest directly in jobs by renovating our crumbling infrastructure, rebuilding our schools and putting laid-off teachers back in the classroom. And, by all means, it’s time to ask those who have benefited the most from our economy to pay their fair share to help finance these urgent investments. Let’s put America back to work.

Harkin chairs both the Senate Health, Education, Labor and Pensions Committee and the Appropriations subcommittee that funds health, education and labor initiatives.