THE BLOG

Massive Cuts Are Coming Unless We Work Together

01/15/2013 05:16 pm ET | Updated Mar 17, 2013
  • Lee A. Saunders President, American Federation of State, County, and Municipal Employees, AFL-CIO

Thanks to the efforts of millions of Americans who got involved in the fight, Congress passed important compromise legislation on New Year's Day to avoid the massive spending cuts we faced with the so-called "fiscal cliff." The compromise was far from perfect, but it did achieve several important goals for working families. By increasing taxes on the wealthiest Americans, it paves a way to restore tax fairness. Just as importantly, the compromise protects Social Security, Medicare and Medicaid benefits for retirees and the most vulnerable Americans, and it guarantees that the long-term unemployed can continue to receive unemployment benefits as they look for work.

Yet, the battles are far from over. The New Year's Day compromise sets the stage for even more difficult fights in the weeks to come. There is still a possibility of dangerous, across-the-board-cuts that could be enacted within two months. That's because Congress simply kicked the "fiscal cliff" decision to the end of February. Around the same time, Congress will have to take action to guarantee the "full faith and credit" of the United States by lifting the ceiling on the amount of money that our country can owe as it pays off debts already incurred by Congress. This is not a minor issue. A small band of extremists in the U.S. House of Representatives have vowed to use the possibility of our defaulting on our debts in order to force President Obama to slash funding for vital insurance programs, such as Medicare, Medicaid and Social Security, that working families rely upon. They plan to hold all Americans hostage to their demands and have even threatened to shut down the U.S. government to achieve their ends. We cannot allow them to succeed.

Working Americans have already sacrificed during these tough times. Those lucky enough to have held onto jobs have seen their take-home pay reduced, their benefits cut and their retirement security put in jeopardy. Millions of their neighbors are still looking for work after the economic collapse that engulfed the world during the final months of the Bush administration. In addition, as a result of the New Year's compromise, their paychecks have taken another hit. Congress made a decision not to extend President Obama's temporary cut in the payroll tax, which funds Social Security. For the past two years, workers have paid 4.2 percent of their wages to fund Social Security benefits, with the federal government providing a 2 percent subsidy.

Now, as a result of the decision not to continue the subsidy, workers will again pay the full 6.2 percent. For a worker earning $50,000 a year, that means $1,000 less in their paycheck this year. This was a part of the compromise made to keep workers from being hit by an even larger bite in their income had Congress not enacted permanent middle-class tax cuts. So, as payroll taxes went up as part of the New Year's Day compromise, Congress also took action to insure that middle-class income taxes would not increase by an even more substantial number. In addition to permanent tax cuts for the middle class, Congress also renewed important tax breaks for working families, including the expanded Earned Income Tax Credit and Child Care Tax Credit and the American Opportunity Tax Credit for college tuition.

Now, however, the middle class faces an even greater threat to their economic, health and retirement security. Tea Party Republicans in the House are demanding that the Medicare eligibility age rise from 65 to 67. The American people overwhelming reject this idea. Do we really want 67 year old prison guards, emergency responders, road crews and sanitation workers? Keep in mind, this change would do nothing to address the rise in overall health care costs. It would merely shift those costs onto seniors, employers and state Medicaid programs. Is it really fair to ask these workers to give up two years of retirement and carry the burden of deficit reduction?

President Obama made it clear that this is not a path he is willing to take on Medicare. "When you look at the evidence, it's not clear that it actually saves a lot of money," he recently told ABC News. There are ways to rein in health care costs for retirees and others without raising the retirement age for working men and women. One way would be to allow Medicare to negotiate prescription drug prices just as private insurance companies do, and just as the Veterans Affairs Department does. We should institute this common-sense reform rather than raise the age of eligibility or impose means testing or make any other cut in Medicare benefits.

The extremists in the U.S. House are even more out-of-touch on Social Security. They propose cutting benefits and reducing cost-of-living adjustments provided to retirees, even though Social Security does not contribute to the deficit and has no place in any budget negotiations. Unfortunately, President Obama appeared to give some ground in this area when he suggested that a change in the Social Security COLA might be acceptable. However, he kept this idea out of the New Year's Day compromise. Now, we need to make sure that it is not put back into play during negotiations in the next two months.

Just ask yourself: Is it fair to ask retirees who receive an average of only $14,000 a year from Social Security to get by with less while corporations like the oil, drug and agricultural giants continue to receive billions in taxpayer funds to fill their coffers? Is it fair to ask veterans to take a cut in their benefits while continuing to fund billions of dollars on weapons systems that even the Pentagon has opposed? Of course it is not. Nor is it fair or wise to enact enormous cuts in education programs, job trainings, scientific research and a host of other programs that help us compete in the global economy. These are not real solutions for the problems our county is facing.

Throughout the recent negotiations, President Obama refused to back most of the unnecessary cuts in benefits demanded by the extremists in the House. He's supported proposals that save money while protecting working men and women, retirees, veterans and the unemployed. Americans need more economic security, not less. Shifting costs to workers and retirees and increasing economic insecurity will not prepare us for the challenges of the 21st century. It's time to end corporate welfare before forcing our most vulnerable citizens to face unnecessary cuts in programs they rely upon to survive. It's time to pull together to prepare America for the future. Together, we must be part of the fight to make that happen.

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