I’m going to comment on the President’s budget speech in a minute, but first I want to highlight something happening on Capitol Hill today that really ties together the Republican governing philosophy.
There is a certain rich irony in Darrell Issa bringing Wisconsin Gov. Scott Walker to the Capitol for a hearing on how Moody’s has boosted Wisconsin’s credit rating because of the union busting measures Walker has been pushing in the state. So in one sentence, you have a leader of the House Republicans that are trying to do away with Medicare and Medicaid, the governor who most personifies the attempt to crush collective bargaining in this country, and one of the principal companies at the dead center of the fraud on Wall Street that brought down the world economy. They should take their show on the road. You could entitle it “Cruelty, Arrogance, and Fraud: How to Dismantle the American Middle Class in Three Easy Steps.”
Issa, Walker, and Moody’s belong together. This is all one story — the story of a relentless assault on the working middle class and those desperately trying to gain a foothold on the ladder up to it.
Now there is nothing the least bit notable about two right-wing Republican politicians hanging out together — that happens at every exclusive country club in America. But touting the new ratings upgrade Moody’s just gave to NYC is like having a guy just convicted of murder as your character witness in the case over in the next courtroom; he might say nice things about you, but he doesn’t bring much credibility to the table. Moody’s is one of the least credible companies in America right now, condemned yesterday in a Congressional report for their pivotal role in the financial crisis. Their collusion with the biggest Wall Street firms in issuing thousands of AAA-bond ratings to sub-prime derivatives that were basically junk was, as much as any other factor, at the heart of the fraudulent bubble that caused the financial collapse of 2007 — a collapse that caused the loss of trillions of dollars of wealth to pension funds, foundation and church endowments, and individual stockholders. Remember, AAA-rated stocks are supposed to be the safest of the safe, as safe as sticking your money into a savings account in an FDIC-insured bank. Pension funds, church and foundation trustees, state and county treasurers are all looking for investments that are absolutely safe, completely reliable, and they depend on Moody’s to tell them what those investments are. They are fine with accepting a lower rate of return because they want their investments to be safe. But the culture or reliability and integrity and honest numbers crunching at Moody’s eroded badly in the late ’90s and early 2000s, and with the pressure of the big Wall Street banks pushing them to do it or lose business, they started ginning up the ratings of these junk bonds to assure getting more business from the big boys. As much as any other single thing, this line of corruption going from the big banks to Moody’s and the other bond ratings companies set the financial industry, the housing market, and all of us up for the big fall.
Now this same company is playing political footsie with politicians like Scott Walker and Darrell Issa. It’s financial fraud and political fraud all wrapped up in a nice little package. There is nothing about what Scott Walker is doing — giving huge tax cuts to big business while crushing unions and cancelling infrastructure projects — that will help make Wisconsin’s finances or economy stronger in the long run. If you destroy middle-class jobs, drive down working families’ pay, and give more tax breaks to your big business friends, all you end up with is a third-world economy. There is nothing about what House Republicans are doing that will give our federal budget more stability, because if you give $4.2 trillion in tax cuts to millionaires and big business while taking away Medicare, Medicaid, and all the other programs that help support working middle-class families, you will have neither a balanced budget (the House Republican budget won’t come until balance until 2040, and that’s only if we have 2.8 percent unemployment, so it will never come into balance), nor a strong economy.
Which brings me to the president’s speech yesterday. Like I said, this is all one story.
Now the President didn’t make a budget proposal along the lines that I would have. Jan Schakowsky and the Congressional Progressive Caucus budget were more in keeping with what I would have proposed: more taxes on the wealthy and big, multinational corporate interests who can well afford it, more cuts in defense spending, and more investments in the working middle class and the young and poor people trying to work their way into it. I would have strongly preferred, for example, for the President to endorse a financial transactions tax that would both raise $125 billion a year and have the strong added bonus of some curb on the reckless trading and speculation on Wall Street. Most passionately of all, I wish the President would have made an investment in more middle-class jobs, and reframed the debate by making clear that the D.C. establishment’s single-minded obsession with long-term deficits when the unemployment rate is still close to 9 percent (and the real unemployment rate when you count the people who are too discouraged to look for work, or who are stuck in part-time or temp jobs when they want to be working fulltime, is still around 17 percent) is wrong. I wish he had said, “Yes, we need to worry about deficits, and I have a long-term plan for dealing with that, but our top priority right now needs to be producing more jobs.”
Having said all that, though, what the President’s speech did do was create a real debate about the budget between a Democratic position and a Republican one. Unfortunately for the country, it is a centrist Democratic position vs. a far, far right Republican position, but still: this speech laid out a plan that is more unifying than not for Democrats, and it sets up a strong, clear contrast going forward. In the House Republican plan, the guarantee of health coverage and nursing home coverage for seniors, people with disabilities, and poor children through Medicare and Medicaid is taken away; student loan programs have an axe taken to them; investments in green jobs and clean air and water are ended; investments for the future in public education and scientific research are obliterated. On all these things, Obama actually didn’t just advocate for them, he drew bright lines: while he is President, he said, Republican plans to take these things down will not happen. Even more importantly, he made a full-throated case for progressive tax increases as a major part of the solution on the budget.
The debate this sets up now is about as fundamental as a political debate can get, and unlike some of his above-it-all mushiness on past issues, the President has taken a side. These are very big, very important questions: are you for or against a guarantee of senior citizen health coverage in Medicare? Are you for or against a guarantee of nursing home coverage in Medicaid? Are you going to let those with disabilities and poor children fend for themselves? Are you going to try to cut the deficit while continuing to give more tax breaks to millionaires, or are you finally going to ask them to pay their fair share? This is the kind of debate we need to be having as a country, and I am thankful both that the Republicans have decided to go for it and lay out their true beliefs on these issues, and that Obama has come down clearly on the Democratic side.
For progressives, these are battles in which we should be eager to engage and happy to fight. This isn’t playing around at the edges, debating whether something should be cut 5 percent or 10 percent, debating whether the Medicaid matching formula for Title-whatever in the bill is lined up right. And whether we agree with Democratic Sen. X, Congressman Y or the administration on the exact specific subtitle of a policy doesn’t matter a lot either. We are at the most fundamental debate in terms of the future of the country since the 1930s. This is our time to organize together and the win the debate on behalf of the working middle class.
This is all one story, it is all one fight. It is about whether the most broad-based middle class in the history of the world survives in the 21st Century. It is about whether this country will continue to provide a safety net, or whether each of us is completely on our own to fend for ourselves. It is about whether government chooses to prioritize seniors, children, and the most vulnerable among us, or only those with lots of money and power. It is about whether the right to bargain collectively, which Ronald Reagan championed in the days of Lech Walesa, will still exist. It is about whether financial institutions like Moody’s and their client banks get to commit fraud and not get penalized for it, get to run roughshod over homeowners whose homes are underwater through no fault of their own, and get to pick the pockets of small businesspeople and consumers on things like swipe fees.
In spite of his speech’s flaws, Obama ultimately decided to align himself firmly and resolutely on the progressive side of the debate. Now he needs to be our leader and fight the good fight. If he does, I have little doubt we will win this debate.