Wayne O'Leary

Up the Down Staircase

The odd couple of contemporary politics, tall, athletic Paul Ryan (R-Wis.), conservative chairman of the House Budget Committee, and itty-bitty Patty Murray (D-Wash.), liberal chairwoman of the Senate Budget Committee, reached a compromise deal on the federal budget just before Christmas, and all is now right with the world. “God bless us every one,” as Tiny Tim might have said to the news that another government shutdown had been averted.

Predictably, the mainstream media were euphoric over the results of the inter-party budgetary tête-à-tête, which has since been given full congressional approval. The steadfastly centrist Christian Science Monitor was typical in its reaction: “The Ryan-Murray deal was achieved in the spirit of principled compromise. ... Washington may yet change its ways.” Establishment figures from House Speaker John Boehner to President Barack Obama were properly enthusiastic over Capitol Hill’s version of a group hug.

So what exactly is it that Ryan and Murray produced to such acclaim? Basically, they kicked the sequester can down the road, not eliminating the 10 years’ worth of mandatory, across- the-board spending cuts baked into the rigid 2011 Budget Control Act, but marginally reducing them for the next two years by shifting some of the money to the discretionary part of the balance sheet and moving $23 billion in deficit reduction to the out years by back-loaded bookkeeping. This adds a chintzy 4.7% a year bump to the stringent austerity budgets for 2014 and 2015, increasing next year’s discretionary spending level from $967 billion to $1,012 billion (Wow!), equally split between defense and nondefense outlays.

The Ryan-Murray duo paid for their wild-and-crazy extravagance by raising government airline-passenger fees, increasing annual pension contributions from new federal workers, cutting COLAs for military retirees, and extending Medicare-provider reimbursement cuts for an additional two years. Significantly, the budget agreement did nothing to extend unemployment-insurance benefits for the long-term jobless, which ended for 1.3 million unemployed on New Year’s Day. It likewise did nothing to provide funding for major infrastructure repairs, a problem that’s reaching the critical stage nationwide, as this winter’s widespread power outages placed in stark relief.

Budget compromise, such as it is, became a reality for only one reason: it was in the best political interest of Republicans. The inevitable government shutdown it forestalled would have hurt the GOP even more than last fall’s fiscal stunt. Better to give Democrats something they could interpret as a small victory and avoid another shutdown-induced drop in the polls, while allowing the public to focus (with Republican help) on the shortcomings of Obamacare, which has damaged Democrats as much as closing the government damaged Republicans.

So a nickel-and-dime budget deal that keeps the country trapped in austerity is what has resulted from the parties “working together.” Ryan and Murray labored mightily and brought forth a mouse. This is what bipartisanship looks like.

Nothing is going to turn things around until we have a frankly partisan liberal Democratic Congress willing to throw out, or radically revise, the Budget Control Act and its sequester, replacing them with something positive. Although Democrats agreed to it and President Obama signed it, this perverse legislation is Republican to the core; it has institutionalized austerity — the notion that government spending is bad, that cutting the public sector to the bone somehow produces economic prosperity, and that the pain and suffering induced in the meantime are morally beneficial to the body politic.

Austerity presupposes that anyone not doing well under our present system of raw, dysfunctional capitalism is slothful, stupid, and undeserving, because there are obviously opportunities galore for those with the Horatio Alger spirit.

Republicans have always subscribed to this nonsense, but until the advent of the tea-party Congress and the concurrent rise of the red-state governors in 2010, they were unable to act on their distorted views of reality and human nature. They can now, and they will until November 2014 at the earliest.

Carried to its logical extreme, here’s what the imposition of maximum austerity would mean, if its proponents had their way: no unemployment insurance, no minimum wage, no food stamps, no Medicaid, no labor unions, no jobs programs, and ultimately (if they could pull it off), no Social Security or Medicare. The only question is whether Democrats, in their gullible search for “bipartisan solutions” pleasing to the monied establishment and its media hangers-on, will cooperate in their own gradual destruction and the step-by-step dismantling of what’s left of their belief system.

There are, of course, real-life lessons to be learned about what comes of planned austerity as a way of governance and a way of life. The ultimate in self-flagellation as public policy is taking place across the Atlantic, where Europeans, pressured by Germany’s deficit hawks, opted for austerity earlier and more unequivocally than the US.

After four years in the resulting recessionary grinder, the Euro Zone’s collective unemployment rate, as of November, was a record-high 12.2% — 19.5 million jobless. While inflation, the sum of all fears for Weimar-conscious Germans, had sunk to 0.7%, industrial output, an anemic 0.2%, remained far below the pre-crash level of 2008. The Continent, racked by social turmoil and pervasive hopelessness, faces an agonizing recovery that, according to the latest deflationary indicators, will take years at best.

Angela Merkel’s agenda-setting government has been the arrogant whip hand flogging the rest of the Euro Zone to follow its lead and stay on the fiscal straight and narrow. But now austerity’s chickens have come home to roost in the place where it all started. An illuminating New York Times report in late November told the tale: Germany’s once unparalleled infrastructure, the envy of the world, is crumpling from an appalling lack of public investment, down one-fifth since conservative budgeting gained sway in the 1990s. A government-appointed commission concluded that spending on the order of $9.7 billion (US) for the next 15 years would be needed to reverse the decay, which is dragging down the entire economy.

All told, 46% of Germany’s bridges, 44% of its streets, and 20% of its highways are structurally substandard, as are its schools, daycare centers, waterways, rail system, and telecommunications network. One critic of Merkel’s tax-averse austerity summed it up as “all a matter of money.” Take note bipartisan belt-tighteners.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He is the author of two prizewinning books.

From The Progressive Populist, March 1, 2014