Labor & Employment Law

Trumka: Creating Jobs Is Best Way to Fix Deficit

By James Parks

The best way to reduce the growing federal deficit is to create 10 million jobs now?the number of jobs needed to close our jobs deficit?not to cut vital programs such as Social Security and Medicare, AFL-CIO President Richard Trumka said.

President Obama yesterday signed an executive order creating an 18-member National Commission on Fiscal Responsibility and Reform to propose ways to reduce the growing national debt. Click here to read the executive order.

Trumka cited data from the nonpartisan Congressional Budget Office that most of the deficit over the next 10 years will come from the Bush administration’s tax cuts for the rich, the wars in Afghanistan and Iraq, spiraling health care costs and the recession.

The main driver of the recent increases in deficit projections is worsening economic conditions?in short, the present deficit crisis is largely a symptom of the jobs crisis.

Solving the jobs crisis and the deficit will require large amounts of public investment in the short term, which should be paid for in future years by taxing Wall Street, Trumka said. Read the full statement here.

Also, it is critical that the newly appointed commission not focus on cutting entitlements, Trumka said. The problem with perennial proposals for entitlement commissions and deficit commissions is that they are too often premised on the mistaken assumption that short-term stimulus and entitlement spending are the root causes of burgeoning budget deficits. But that is not the case, he said.

Social Security is fundamentally sound and does not contribute meaningfully to our long-term deficit. With the decline of defined-benefit pensions, the sudden loss of retirement savings for millions and the dramatic increase in economic uncertainty, strengthening Social Security’s core guarantee of retiring with dignity is now more important than ever.

Problems with Medicare financing are a symptom of the larger problem of rising health care costs and can be solved by comprehensive health care reform, not benefit cuts, he added.

Commissions have been, and can be, serious and useful mechanisms to grapple with difficult problems. But the true test of this commission’s success will be whether it helps fix our budget deficits by attacking the jobs deficit, or whether it makes our budget problems worse by sacrificing jobs and urgently needed long-term public investment.

Full post as published by AFL-CIO NOW BLOG on February 19, 2010 (boomark / email).