Congress may have averted a global financial meltdown of their own making with the passage of a controversial deficit control bill on Aug. 2, but some members of the Congressional Black Caucus (CBC) say the worst is yet to come.
“This is a choice between a job killing default and a job killing austerity plan,” said Rep. Jesse Jackson Jr., D-Ill., who voted against the measure. The federal government is the last line of defense for the poor, but what we’re seeing is the likelihood of unprecedented poverty and misery for the most vulnerable among us, he said.
Baltimore Congressman Elijah Cummings, D-Md., predicted that many jobless Americans and those looking for work would suffer under the budget deal that cuts $2.4 trillion in federal spending over 10 years and raises the limit on federal borrowing.
Cummings predicted it could worsen the 16.1 percent unemployment rate in the Black community. Less federal and state spending means fewer jobs will be available just as unemployment insurance benefits expire in 2011, Cummings said.
Few members of the CBC were entirely happy with the legislation. In fact, 22 members of the 43- member caucus voted against the spending cut bill on Aug. 1. Votes among the House Progressive Caucus and the Congressional Hispanic Caucus (CHC) were also mixed. For example, CBC member Rep. Sanford Bishop, D-Ga., voted yes, while HCC Chair Rep. Charles A. Gonzalez, D-Tex., voted no on the bill.
President Obama quickly signed the Budget Control Act of 2011, after the Senate passed the bill on Aug. 2. The measure was touted as a bipartisan compromise intended to raise the amount the federal government can borrow and trim the amount it spends on defense, health care and entitlement programs.
The new law calls for approximately $1 trillion in federal spending cuts over the next 10 years in return for raising the debt limit. It also sets up a 12-member joint committee that must recommend an additional $1.5 trillion in deficit reduction by late November. If the committee stalemates or if Congress refuses to vote on their recommendations, then automatic additional spending cuts will take place in defense and non-defense programs.
Without passage of the hotly contested legislation, the nation would have reached its $14.2 debt limit and begun defaulting on payments to Treasury bill investors, possibly leading to a global depression. Meanwhile, social security checks, military payments and funds for government contractors would also have fallen short.
In the last three months, Tea Party favored Republicans forced House Speaker John Boehner, R-Ohio, to tack trillions of dollars in spending cuts onto what has historically been a routine, non-controversial bill to increase the federal debt ceiling.
The stalemate that ensued during the last months put in doubt whether the full faith and credit of the U.S. would be upheld by Congress and the White House for the first time in American history. Moody’s Investor Services and Standard & Poor’s Rating Service threatened to downgrade the nation’s credit rating over the budget impasse.
At least one CBC member said some of the blame lies with the president. Rep. Maxine Waters, D-Calif., said the Obama administration was not “tough enough” when bargaining with Republican lawmakers. Moreover, the likelihood is that deeper cuts that hurt African-American constituents would be forthcoming. “Given their inability to be tough and to be good negotiators, I don’t trust that they will do anything. They will simply do enough,” Waters said.
During the budget negotiations, the president gave several prime-time speeches about the need for shared sacrifice, between spending cuts for federal programs and higher tax revenue from millionaires, investment managers and those who own corporate jets. He repeated those calls during a White House press conference on Aug. 2, in which he promised to fight to ensure that everyone chips in.
“We can’t balance the budget on the backs of the very people who have borne the biggest brunt of this recession,” Obama said before signing the legislation. “We can’t make it tougher for young people to go to college, or ask seniors to pay more for health care, or ask scientists to give up on promising medical research because we couldn’t close a tax shelter for the most fortunate among us.”
Rep. Hank Johnson, D-Ga., a staunch Obama supporter, said he was confident that the president would veto any attempt by Republicans to pass legislation that extends billions of dollars in Bush-era tax cuts.
Johnson said Obama’s strategy has been brilliant because it will force GOP lawmakers to accept higher taxes on more affluent Americans in order to pay for deficit reduction. “My problem is that we’ve allowed a small ultra right faction of the Tea Party to control this debate,” Johnson said. “The public has got to speak up.”