GOP-backed budget cuts could strangle economy

Newton B. Jones, International President

Defunding government programs will cost jobs, threaten unions

FACED WITH A national debt that has grown to over $14 trillion over the past decade, Washington is debating how best to proceed with deficit reduction — and Republican-sponsored budget cuts are quickly spiraling out of control. The unfolding budget battles could have a dire impact on job growth and the nation’s continued economic recovery. Those battles will also define what kind of nation we leave our children and grandchildren.

Any approach to deficit reduction must be both sensible and fair. However, the current-year budget bill passed by House Republicans is far too extreme and would cause irreparable harm to our nation. Many Republican congressional members, especially those who owe allegiance to the tea party movement, want immediate, massive new cuts aimed at dismantling government functions — from enforcing labor laws, to protecting workers, to funding advances in clean coal and other emerging energy technologies. Deficit hawks are targeting dozens of federal departments and programs for defunding, including those that benefit working families and the poor.

For example, job training programs would be slashed by $2 billion, community health centers $1.3 billion, and community policing $600 million. Even WIC, the program which provides supplementary nourishment to women and infants, would be cut by $758 million. Overall, Republicans hope to eliminate $61 billion from current funding levels in the remaining months of fiscal year 2011.

Many fear that reduced government funding will force federal agencies to eliminate jobs. State-run programs that depend on federal funding will also have to scale back, cutting even more jobs.

The unemployment rate could ratchet up quickly should hundreds of thousands of government workers suddenly begin looking for work. Mark Zandi, chief economist at Moody Analytics, predicts GOP spending cuts would cause job losses of 700,000 through 2012. And rising unemployment would only strangle our fragile economic recovery.

Energy cutbacks threaten Boilermaker work

OUR CONSTRUCTON SECTOR members will be among those adversely affected if Republicans push through their proposed cuts. Under the House GOP budget plan, $31 million will be shaved from fossil energy research, $38 million from clean coal technology, and $169 million from nuclear energy. All of these areas are essential to America’s energy security and deserve full funding.

Budget battles will define what kind of nation we leave our children and grandchildren.

The future of coal in America depends on the successful development and deployment of carbon capture and storage (CCS) technology. We cannot afford to reduce our investment in this vital area and lose our competitive advantage to other countries.

We are also concerned about how proposed cuts to the Environmental Protection Agency will impact Boilermaker construction jobs. While the president has proposed cutting $1.3 billion from the agency in his 2012 budget, he would increase funding for compliance and enforcement, allowing the EPA to proceed with rules controlling greenhouse gas (GHG) emissions from power plants, refineries, and factories. However, Republicans want to strip the EPA’s authority to regulate GHG and are calling for $3 billion cuts in the current fiscal year. These regulations are important for climate protection and would generate millions of man-hours of work to install pollution control equipment — work our members regularly perform.

Obama’s budget cuts too small, say Republicans

REPUBLICANS IN THE House not only seek major cuts for the rest of fiscal year 2011, but they have also come out strongly against President Obama’s budget request for next year. The GOP criticized the president’s proposed cuts as being too meager.

But it’s not as if Obama’s recommended cuts are painless. His proposal freezes nonmilitary spending for five years, with no pay increases for federal employees. It also reduces spending on some social programs. Over the next decade, Obama’s budget would reduce deficits by more than $1 trillion. Obama’s proposal also calls for investments in clean technology, education, research, and innovation — all designed to make the country more competitive.

The president’s FY 2012 budget request will likely not resemble the final product that comes out of the House and Senate budget committees. Months of difficult negotiations lie ahead. And a debate on the future of Social Security, Medicare, and Medicaid is just beginning.

Richest two percent must share in the sacrifice

WHILE SOME REPUBLICANS appear eager to slash government programs that benefit middle class and low-income families, they were not so eager to push for sacrifices from the wealthiest two percent of America. Last December, the GOP delayed a Bush-era tax cut extension for the middle class until they were assured wealthy Americans would receive an extension as well.

In fact, tax cuts for the wealthy are a major contributor to the growing deficit. Writing for the Economic Policy Institute, Andrew Fieldhouse noted that, “making permanent the Bush-era income, estate, and gift tax provisions… and indexing the AMT [Alternative Minimum Tax] to inflation would add $4.6 trillion to deficits over the 2012-21 period.”

Fieldhouse stressed that the deficit has grown over the last decade largely because tax revenue was taken off the table without a corresponding reduction in spending.

It is too late to do anything about these tax cuts; they have been extended through 2012. But, Congress should take a long, hard look at rescinding them going forward.

If Republicans are truly interested in an equitable way to reduce the deficit — and they have so far illustrated that they are not — then wealthy Americans are going to have to help shoulder the burden. That will likely mean that new tax revenue has to be on the table. Budget cuts alone won’t be sufficient. And deep cuts that lead to major job losses will only prolong our economic woes.

This is a dangerous time for unions

Underlying the Republicans’ budget-slashing mania is a dangerous seam of animus toward unions. Clearly, many in Congress and state governments see our nation’s fiscal problems as a political opportunity to weaken organized labor. The gains union members have made over years of negotiations have come under fire. Even as the middle class continues to shrink, labor foes seek to undermine the living wages and hard-won benefits union workers enjoy — in a painful race to the economic bottom.

This battle is rapidly unfolding in our nation’s capitol as well as in state-houses. We cannot afford to stand on the sidelines while the Republican dominated U.S. House dismantles vital government programs created over generations and targets organized labor for destruction.

Union members, including Boilermakers, have begun to push back in growing numbers against the onslaught at the state level — notably in Wisconsin, Ohio, and Indiana. Rallies attended by tens of thousands of union workers and their supporters have focused the nation’s attention on the extreme antiunion agenda being promoted by many Republicans.

I strongly encourage all of our members to contact your state and federal elected representatives immediately and insist that the attacks on labor unions be stopped, that any budget cuts be reasonable, measured, and fair, and that wealthy Americans participate in the sacrifices that are being forced on the middle class and the poor.

Visit our LEAP site at to take action today.