LaborTalk for August 22, 2011

$1.5 Trillion Cuts in Government Spending
Will Leave Scant Funds for Job Creation

By Harry Kelber

During the six months of mostly secret negotiations to raise the federal debt limit, President Barack Obama made two important concessions to the Republicans in order to get their bi-partisan support:

1. The agreement would cut government spending by at least $1.5 trillion over ten years and

2. There would be no decision on raising taxes.

What the President got in return was that Republicans would agree to raise the federal debt limit, and that the Treasury's authority to borrow would be extended beyond the 2012 elections.

The spending cuts would come from hundreds of federal programs that are supported by the government. It would leave Obama with the lowest level of discretionary spending in more than a half century.

According to inside sources, Social Security, Medicaid and food stamps would be exempted from automatic cuts, but payments to doctors, hospitals, nursing homes and other providers could be trimmed, as could subsidies to insurance companies that offered an alternative to government-run Medicare.

Obama's request to extend the current payroll tax exemption beyond the end of 2011 was not included, nor his call for extending unemployment benefits for victims of the recession.

Why Hasn't the AFL-CIO Fought the Trillion-Dollar Spending Cuts?

As part of the agreement on raising the debt ceiling, a new "super" congressional committee of 12, equally divided between Democrats and Republicans, was charged with recommending $1.5 trillion in deficit reductions by the end of November, and put its conclusions to a vote in Congress. The cuts could come from benefit programs, including Social Security, Medicare and Medicaid, as well as from an overhaul of the tax code.

It is highly likely that the Republicans will use the trillion-dollar spending cuts to block, cripple or kill Middle Class programs that benefit workers, retirees, veterans students, working women and people of color, as well as shred the network that protects the poor, sick and elderly.

Why haven't AFL-CIO leaders insisted on having Obama publicly inform them at every stage of the negotiations? Why didn't they protest at the size of the trillion-dollar spending cuts or whether this was an appropriate time to propose them? Why were we not told about the contents of the spending cuts, so labor would have a voice in deciding whether they were fair or necessary?

* * * * *

What were AFL-CIO leaders doing during these negotiations that were deciding our future? Why were they silent while Obama and the Republicans were focusing for a half-year on deficit spending and not saying a word about creating jobs?

Will our leaders tell us where will the government get the necessary funds to create jobs, when Obama and he Republicans have agreed to deplete domestic spending by trillions of dollars through spending cuts?

LaborTalk will be posted here on August 26, 2011 and on our two web sites and on

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