So the Debt Ceiling Has Been Raised;
Let Us Get Back to Our REAL Crisis

There was no wild jubilation either in the White House or Congress at the passage of a law to raise the federal debt ceiling that allowed the U.S. government to pay its bills and avoid default before an August 2 deadline.

It took six months and secret negotiations, as well as continuing debate by Congressional lawmakers, to accomplish a procedure that used to be done routinely dozens of times under past presidents.

On Wall Street, financial investors were not impressed by the rise in the budget debt ceiling. The Dow Jones industrial average dropped 266 points by the close of trading, and all of the major Wall Street indexes lost more than 2 percent.

European and Asian stock markets also took a beating on Tuesday, August 2, the day that Congress approved the rise in the budget deficit ceiling. Lower stock market numbers were reported everywhere: in London, Paris, Frankfurt, Japan, Hong Kong and other countries.

What was of major concern to economists and many business executives was the effect that the rise in the debt ceiling would have on the nation's economic growth. Specifically, the new law calls for spending cuts of$900 billion, with at least another 1.5 trillion, possibly before the end of 2011.

There is no provision for a tax increase to provide the revenue to promote investment in infrastructure, energy, job creation and education. This means a shrinkage in the functions of government, a tenet of Tea Party activists. Consumer spending would fall off substantially, as the price of goods and services increased, raising the specter of inflation.

Trillion-Dollar Spending Cuts Will Stunt U.S. Growth

The Republicans are aiming at spending cuts of more than $2 trillion, but they haven't specified where the cuts will be imposed. President Obama and the Democrats have not challenged the spending cuts, which are aimed at programs that provide services for middle class and working class families and retirees.

While Medicare, Medicaid and Social Security are not mentioned in the debt limit agreement, there is no doubt that they will be targeted by the newly-created 12-member congressional committee that will figure out what changes to make in the three entitlements to slash their costs, even at the expense of their effectiveness.

Labor leaders must change the national conversation back to the economic crisis, with a demand that Congress find the money to create jobs for millions of workers and preserve the benefits of retirees. Most Americans have suffered enough without having to endure spending cuts on program that have made life tolerable.

If AFL-CIO and Change to Win leaders want to be believed when they talk, talk and talk about a campaign to create jobs for the unemployed, they have to initiate dramatic actions that will make themselves credible to their rank-and-file.

With both the Republican and Democratic parties in disarray, now is the time for unions to mobilize their members for a series of bold actions on jobs that Congress can't ignore.

Are there any labor leaders who will step forward and take on the challenge?

LaborTalk will be posted here on August 8, 2011 and on our two web sites www.laboreducator.org and on www.laborsvoiceforchange.org.