CBO Agrees: The Super-Committee Can Reduce Poverty, Not Just the Deficit
On Wednesday morning – just as the Census Bureau released sobering new statistics on poverty in the U.S. in 2010 – the congressional “super-committee” charged with coming up with at least $1.2 trillion in deficit reduction over ten years held a public hearing on “The History and Drivers of Our Nation’s Debt and Its Threats.”
To me, learning that more than 17 million women lived in poverty in 2010 (with record numbers living in extreme poverty) only emphasized that the super-committee’s plan must reduce debt and the deficit by creating jobs, growing the economy, and making millionaires and corporations pay their fair share – not by cutting spending on programs that struggling women and families depend on every day. In his testimony at yesterday’s hearing, Congressional Budget Office Director Doug Elmendorf affirmed that a responsible deficit reduction plan can include spending measures to spur the economy:
“There is no inherent contradiction between using fiscal policy to support the economy today, while the unemployment rate is high and many factories and offices are underused, and imposing fiscal restraint several years from now, when output and employment will probably be close to their potential. If policymakers wanted to achieve both a short-term economic boost and medium-term and long-term fiscal sustainability, a combination of policies would be required: changes in taxes and spending that would widen the deficit now but reduce it later in the decade.”
To craft a plan that boosts economic growth now while reining in the deficit over the long term, the super-committee would be well served by looking carefully at measures in President Obama’s jobs plan (in the event Congress fails to act on them right away). For example, the plan includes an extension of federal emergency unemployment insurance (UI) benefits for workers who have been jobless for more than 6 months – a measure that would stimulate the economy (because unemployed workers tend to spend benefits quickly in their communities) while alleviating hardship for millions of long-term unemployed women and men and their families. Data from the Census Bureau show that unemployment benefits kept 3.2 million people out of poverty last year. To offset the cost of a federal UI extension and other job creation measures and meet its ten-year deficit reduction target, the super-committee can employ a host of progressive revenue raisers; repealing tax breaks that benefit hedge fund managers, corporate jet owners, and oil companies as proposed by the President would be a good start, but there are many other wasteful tax expenditures to choose from.
Today, it is more critical than ever that the super committee honor the longstanding principle that deficit reduction should not increase poverty or inequality. And the committee has the power to go further by recommending a plan that promotes job growth and reduces poverty even as it reduces the deficit. In fact, the three major federal deficit-reduction packages of the 1990s protected low-income programs and reduced poverty by increasing the EITC (in 1990 and 1993), expanding food stamps (in 1993), and creating the Children’s Health Insurance Program (in 1997).
Want to learn more about what the super committee can do – and what you can do to influence the critical decisions ahead? Check out our fact sheets for super committee advocacy in your state!