Class Warfare in the House: Republican Budget “Harshest to People at the Bottom”

May 17, 2011; Source: Politico | In economics, the problem is called “misplaced aggregation.” We tend to mistakenly assume in the budget debates on Capitol Hill that the cuts will hit everyone equally, but in truth, you can’t aggregate proposed budget cuts in this way.

The pending Republican fiscal year 2012 budget makes bigger cuts in some areas than others. In its promise to roll back spending levels to the beginning of the Bush Administration, the Republican budget takes a particular impact on “labor, health and education appropriations important to poor and working-class families.”

According to Politico, “A proposed $139.2 billion cap for the annual labor, health and education bill is about $19 billion less than the eight-year average for the same discretionary spending under former President George W. Bush – when measured in current dollars.”

Bob Greenstein, of the Center for Budget and Policy Priorities, translated it into simple English: “I have never seen a budget so badly skewed that has gotten so far past either house of Congress . . . The bottom line is the House budget is a huge Robin Hood in reverse and its own form of class warfare. In terms of a budget that has actually passed any chamber, I think this is probably – by a substantial margin – the harshest to people at the bottom.”

Why is this important? In 2001, the poverty rate was 11.7 percent, but in 2009 it had grown to 14.3 percent – an increase of 10,000,000 people in poverty. In January of 2001, the U.S. unemployment rate had alarmingly risen to 4.2 percent. Last month, the national unemployment rate was 9.0 percent. This number doesn’t count the increasing proportion of the labor force that have had to work part-time because of the lack of sufficient full-time jobs and the numbers of unemployed people who have simply given up and stopped looking for jobs altogether.

Will Democrats successfully negotiate to soften the harshest edges of the all-but-inevitable fiscal year 2012 budget cuts on low income people? Or has the federal budget debate shifted to cutting the deficit without concern for whose interests are overlooked in paying down the nation’s $14 trillion debt?—Rick Cohen