Reich: Avoiding a shutdown

Robert Reich

TEXT OF STORY

Kai Ryssdal: The Senate's voting on another budget plan today. Two of them actually: one from the Democrats, one from the Republicans. Both with the theoretical goal of keeping the government running when the current stop-gap spending bill runs out next Friday.

Politicians call all the back and forth they're doing now "negotiations." Commentator Robert Reich has another word.


Robert Reich: It's called ransom. That's what Republicans are demanding from the White House and congressional Democrats for not pulling the plug on the government. The problem is, when you pay ransom once, you're almost begging to pay it again. And that's exactly the pickle the Obama administration is finding itself in.

In order to avoid a shutdown last week and buy time until March 18, the White House agreed to more spending cuts for the remainder of this fiscal year than it originally put on the table. Now, in order to get past March 18, Republicans want even more. Democrats have offered to cut an additional $10.5 billion but Republicans want $61 billion. The White House is hinting it will go further.

Both sides want to look as if they're willing to compromise because neither side wants to be blamed by the public if a shutdown happens. And that means going half way. They'll probably agree to split the difference -- which will result in around $35 billion of additional cuts. Not in Social Security or Medicare or national defense -- no, these programs are too popular for any short-term political deal. The $35 billion will come out of what's called 'non-defense discretionary spending' for the rest of this year.

This is ludicrous. Yes, fix the budget deficit when we're safely out of the gravitational pull of the Great Recession. But not now -- not with unemployment still hovering around 9 percent, and 15 million people without jobs. Not just as the federal stimulus is coming to an end. Not at a time when state and local governments are slashing their own budgets to a total of more than $125 billion this fiscal year.

Where will demand come from? Consumers can't make up the shortfall. They're still under a huge debt load. A quarter of homeowners are still underwater. Housing prices are still dropping. And with fuel prices heading toward $4 a gallon, consumers will have no choice but to pull in their horns.

Compromising over budget cuts this year compromises the fragile recovery, and puts the entire economy at risk. Democrats should never have started paying ransom. Once ransom starts, there's no end to it.

Ryssdal: Robert Reich was Secretary of Labor for President Clinton. His most recent book is called "Aftershock: The Next Economy and America's Future." David Frum's up in the rotation next week. Send us your comments -- click on the link that says "contact."

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...