The latest jobs report, which showed that the American economy created just 175,000 jobs in February, confirmed that economic growth is still in the muddle-along phase more than five years after the 2008 financial crisis. As the Wall Street Journal’s Pedro da Costa pointed out yesterday on Twitter, U.S. hiring is “still well-below pre-recession levels, [and] now hovering near 'jobless recovery' threshold.”
Congress, though, has essentially given up on trying to fix this problem. Not only is no job creation legislation likely to pass, but Republican intransigence has allowed the extended jobless benefits program to expire, pulling a portion of the social safety net out from beneath the feet of those who, through no fault of their own, are still struggling to find work.
President Obama’s recently released fiscal year 2015 budget has a lot of good ideas for fostering job creation, including boosting job training programs and increasing infrastructure spending, but it still falls short of the sort of big solutions needed, particularly for the long-term unemployed (those who have been looking for work for six months or more, who currently make up 37 percent of the total unemployed population). Republicans, meanwhile, are still focused on austerity, even though budget cuts have undermined what little growth the economy has been generating.
But that doesn’t mean no one has an actual plan for getting the U.S. both out of its rut and on a more sustainable long-term fiscal footing. As it has for the last several years, the Congressional Progressive Caucus has released its own budget outline, and, once again, it’s the most serious attempt to grapple with the actual economic problems faced by the country.
In addition to including some of the better ideas from Obama’s budget, such as expanding the Earned Income Tax Credit to help working families, the budget includes concrete job proposals and long-term fiscal fixes that, if Washington had any sense, would already be law. Here are some of the best ideas the group put forward:
- Help for the long-term unemployed: In addition to extending the now expired jobless benefits, the budget would devote more resources to workforce development for the long-term unemployed.
- Direct job creation: A direct job creation program should have happened several years ago, as the U.S. has been able to borrow at extraordinarily low rates in the years since the Great Recession, but there’s still no good reason that the government isn’t running a Works Progress Administration-style program to tackle the nation’s deteriorating infrastructure and other important public projects.
- No more cuts to food stamps: While conservative critics like to contend that the food stamp program has exploded in recent the years, the truth is that it simply expanded in response to increased demand following the recession; as the economy improves, food stamp spending is dropping, just as it should. But that didn’t stop Congress – in a despicably bipartisan manner – from cutting the program anyway. In addition to literally providing food to those who are hungry, the food stamp program boosts job creation by injecting money directly into hard hit communities.
- No more sequester: The automatic budget cuts known as the sequester – which were set in motion by the 2011 debt ceiling debacle – are the epitome of stupid budgeting, cutting from good programs as much as they cut from bad. These cuts also undermine economic growth, and should definitely be tossed aside.
On the tax side, meanwhile, the budget would bring some modicum of sense to a broken system by:
- Creating new tax brackets at the top of the income scale: It’s quite absurd that, for tax purposes, those making $450,000 are lumped in with those making several million dollars annually. The progressives’ budget would add new, higher tax brackets for those making $1 million to $10 million, between $10 and $20 million, and on up the scale.
- Implementing a financial transactions tax: Not only would a small tax on stock trades slow down some of the dangerous high frequency trading that has become popular in recent years, but it would raise significant revenue with little effect on the real economy.
- Embracing Dave Camp’s bank tax: The Republican chairman of the House Ways and Means Committee, Michigan Rep. Dave Camp, recently provoked the ire of the financial industry by proposing a tax on the biggest banks. But it’s a really good idea! Not only does the tax raise some revenue, but it would make banks pay for being "too big to fail."
- Getting rid of the cap on Social Security taxes: For all the wailing and gnashing of teeth that occurs about the state of Social Security’s finances, simply exposing all income to the payroll tax – as opposed to just the first $117,900, as current law stipulates – would take care any problems Social Security might have for decades to come.
Oh, and the progressive budget would make the public debt fall faster than President Obama's budget.
Now, of course, there’s very little chance that this budget becomes law. Republicans in the House have no reason to pass it, even if the Democrats coalesced around it, which they won’t. The media, meanwhile, tend to treat the progressive budget as an afterthought, even as they lavish attention on every iteration of House Budget Committee Chairman Paul Ryan’s fiscal plan or even the budgets that come out of the Republican Study Committee.
But that shouldn’t take away from the fact that the Progressive Caucus has put together a serious effort,
and the only budget that really tackles the U.S.’s real economic problems – high unemployment,
stagnant wages and growing inequality – head on, rather than the imaginary problems of out of control spending and government overreach. Hopefully it receives even just a fraction of the attention and consideration it deserves.