Despite Obama’s repeated calls for “shared sacrifice,” i.e., significant tax increases on the wealthy, coupled with spending cuts — what we are left to choose from are two plans — the Reid and Boehner plans — that, while they significantly cut discretionary government programs needed by the poor and middle-class, neither plan proposes any revenue increases, i.e., tax increases on the wealthiest Americans.

[Both the Reid and Boehner] plans each call for cutting federal spending by trillions of dollars over the next 10 years without bringing in any additional revenue [i.e. no “shared sacrifice” – no taxes on the wealthy]. They are a choice between bad and worse. Americans will inevitably be harmed as government programs are cut sooner than they should be in this weak economy and far deeper than they need to be because of the Republicans’ refusal to accept any tax increases — even on the wealthiest Americans.

These are discretionary cuts, that in the midst of a slow/no growth economy and high unemployment, are only going to prolong the stagnant economy that we’re in, and, ironically, bring in less revenue, thus increasing the deficit even further. And with no corresponding tax increases on the wealthy, these are discretionary cuts that are both morally unfair and far deeper than need be without accompanying tax increases.

If this debate were really about fixing the deficit, Congress would start over. What the country needs to get its fiscal house in order, without stalling the fragile recovery, is increased relief-and-recovery spending in the near term, coupled with a credible plan for deficit reduction — including spending cuts and tax increases in equal measure — to be implemented as the economy recovers.

The Reid plan:

It would cut the deficit by $2.7 trillion over the next 10 years, with spending cuts alone: $1.2 trillion from reductions in discretionary programs; $1 trillion from winding down the wars in Iraq and Afghanistan; the rest from interest savings and other measures.

The Democrats’ decision to abandon their demand for a balance of spending cuts and new revenues means that middle-class and low-income Americans — who benefit more from spending programs — would bear a disproportionate burden. By locking in spending cuts upfront, it relieves pressure on Republicans to agree to tax increases in future budget negotiations.

The Boehner plan:

It calls for cutting $1.2 trillion in discretionary spending over 10 years and would only raise the debt limit until early next year. Then it calls for a second round of spending cuts, $1.8 trillion, which must be enacted before the debt limit is raised again.

Because the first round of cuts would eviscerate discretionary programs — and because the plan does not count the anticipated $1 trillion in war savings — the second round of cuts would need to come from Medicare, Medicaid, Social Security and other safety-net programs. To get cuts that deep in 10 years would require cutting the benefits of current retirees and beneficiaries or gutting health care reform, or savaging the safety net for low-income Americans, or some combination of the three. But even all that would not be enough for some House Republicans, who were threatening as of Tuesday night to reject the plan.

Between “bad and worse,” we should choose neither. Since nobody knows when there’s going to be an upswing in the economy strong enough to start to significantly bring down the obscenely high rates of unemployment — whether in 2012, 2013, 2104, or beyond — now is not the time to engage in 1937-style recession/depression “austerity” economics.

At this late date, the economic class/the political class should step back from brink and finally do what the American people want for a change:

POLL: By 58-16 Margin, Americans More Concerned About The Economy And Jobs Than Deficit | While policymakers in Washington, DC remain fixated by the federal budget deficit, new polling from Gallup shows that far more Americans care about the economy and jobs than addressing U.S. debt. The poll finds that 31 percent of Americans find the economy to be the most important problem in America today, 27 percent find unemployment to be the highest problem, and only 16 percent say that the debt is.

Obama and the Congress, do what’s in the best interests of the American people and pass a clean debt-ceiling bill. And then, finally, after more than three excruciating years of a Wall-Street induced “Great Recession,” start to seriously find solutions to grow the economy and create desperately needed new jobs. And then, and only then, can this country seriously deal with the ultimately unsustainable debt brought about, in large part, by Bush-era tax cuts for the wealthy, unnecessary, wasteful (in lives and treasure) wars in Iraq and Afghanistan, and a deep depression due to deregulation and casino-like greed and speculative excess by the “captains of the universe” on Wall Street.


House Democratic leaders urge Obama to use 14th amendment

WASHINGTON — House Democratic leaders emerged from a Wednesday Caucus meeting with a message for President Barack Obama: Invoke the Constitution to resolve the debt standoff.

If Congress can’t reach a deal on a long-term debt limit increase by August 2, Obama should “sign an executive order invoking the 14th Amendment,” said Assistant Minority Leader James Cyburn (D-S.C.).

“I am convinced that whatever discussions about the legality of that can continue,” Clyburn said. “But I believe that something like this will bring calm to the American people and will bring needed stability to our financial markets.”

Otherwise push for short-term extensions to avoid an immediate default, and push (with the American people’s support -see poll again) for a clean bill; and have Geithner, again, magically so it seems, find extra revenue to extend the date of default.