President Obama and congressional Democrats reached a deal with Republican leaders late on Friday night to cut $38 billion in federal spending this year and avert a shutdown of the government. While both sides claimed victory at the end of several weeks of tough negotiations, the truth is, Mr. Obama once again short-changed America’s poor and middle class by agreeing to roughly two-thirds of the original package of $61 billion in cuts put forward by the Republicans.
Speaking from the White House late on Friday night, Mr. Obama said the cuts accepted by Democrats “will be painful,” and that “programs people rely on will be cut back.” Added Mr. Obama, “Needed infrastructure projects will be delayed.”
Mr. Boehner, for his part said, “This has been a lot of discussion and a long fight. But we fought to keep government spending down because it really will in fact help create a better environment for job creators in our country.”
If only that were true.
According to analysis from Moody’s Analytics and Goldman Sachs, the original package of $61 billion put forward by Republicans would lead to a loss of over 700,000 jobs. This is because there is less spending, and hence fewer people employed.
Dean Baker, coordinator of the Center for Economic and Policy Research notes, since the final package agreed to by Mr. Obama and congressional democrats is nearly two-thirds–$38 billion–of these cuts, it is reasonable to deduce that it will lead to a loss of close to 500,000 jobs.
Surely, Mr. Obama would know this.
Mr. Boehner and the Republicans continue to trumpet that they were elected last November because American people wanted them to cut runaway spending in Washington. In fact, poll after poll on the election showed jobs were by far the most important priority for voters, with the budget deficit trailing by a large margin.
Mr. Obama’s budget deal, struck so as to avoid a government shutdown, rather than create jobs, is just a big farce, setting the stage for new battles on the 2012 budget plan, the government’s borrowing limit and long-term deficit reduction.
Mr. Obama’s lack of leadership skills are, once more, in plain view.
