Last night with the words “in divided government you don’t always get what you want” House Budget Chairman, Paul Ryan (R-Wis.), alongside his Senate counterpart Patty Murray (D-Wash.), gave the working poor and historically marginalized the best budget news to come out of Washington in three years. The two-year fiscal deal announced by the two leaders who oversee the federal budgeting process in their respective Congressional branches erases sequestration until 2016, restores funding to badly needed social programs, and allows for new investments in critical areas necessary to grow the economy. As important for economic justice is the fact that their announcement points towards a climbdown from the GOP’s, Tea Party-fueled ideology which shut down the government and held back economic growth at a crucial time.
The good news came with the budget duo’s joint press conference where they stated that the federal budget for 2014 year would rise to $ 1.012 trillion from $967 billion. Under the agreement, it would rise slightly to $ 1.014 in 2015. The $85 billion increase in spending will be equally divided between defense and non-defense areas of the budget.
The rollback of sequestration for at least two years will allow the 50 percent of Americans living on the economic edge to have the breathing space necessary to stabilize their lives after six years of crisis and instability. On the heels of the worst economic crisis in almost a hundred years, sequestration piled on the pain for the poor and near poor with the loss of over 100,000 housing vouchers, a similar reduction in the number of kids able to access Head Start, and close to a million fewer people who received critical care in local community health centers. Not only did these and other devastating cuts in education, housing and health care cause chaos in the lives of those who can least afford it but sequestration hampered our economy by preventing the creation of over 1.5 million jobs this year alone.
The restoration of government funding is also potentially important news for the unemployment picture in communities of color. Given the disproportionate employment by people of color in the public sector, the layoffs prevented by the budget additions will help stave off new mass reductions in employment. This is particularly true for African Americans where public sector job cuts have been a key driver in the double-digit black unemployment crisis.
Not only will these new funding levels help stop things from getting worse, they might even allow them to improve. The added resources now provide a pathway for President Obama to enact his goal of providing pre-school to all Americans. It also gives added financial room for his federal infrastructure bank initiative which would create badly needed jobs in the construction industry for black and Latino men laid off during the recession.
But despite the signs off hope in the deal last night, there are also signs of caution and concern.
The first is that the money to pay for these higher levels of investment is generated by extending for two years an existing 2 percent cut in Medicare and an administrative crackdown on certain types of Medicaid expenditures, such as for children who might be able to have access to healthcare through a non-custodial parent. It also requires younger federal workers to contribute more to their pensions and reduces annual cost of living increases to military retirees under the age of 62. The agreement will also raise TSA airline ticket fees. In fact, even with the new federal spending, these changes will mean that the deficit is actually cut by an additional $28 billion more than would have been the case under the limits of sequestration.
The second cautionary note is that the Ryan-Murray budget pact must still pass both the House and the Senate. While Tea Party standard-bearer Paul Ryan might now see the necessity in making sure the country’s health, education, housing and infrastructure needs are met, many of his colleagues do not. In fact key conservative group Heritage Action opposed the deal even before it was announced saying that they “cannot support a budget deal that would increase spending the near term.” And given the independent streak of the Republicans in Congress, anything is possible.
But perhaps the most worrisome feature is what is left out agreement.
In just two weeks one out of four of the nation’s long term unemployed—over a million people—will lose their unemployment insurance unless Congress takes action.
It also leaves immigration reform to the side which, if passed, would reduce the deficit by $200 billion and increase economic growth by 30 percent.
Though gridlock around the budget may have loosened, it still remains on key areas necessary to get our economy back on track. And even though the budget agreement may be the clearest sign yet that the Tea Party’s “cut our way to growth” ideology may be in reverse, ongoing issues of how the deal is paid for combined with the looming unemployment insurance crisis and stalled immigration reform effort underscore that the reversal may not be total.
Despite last night’s positive news, there’s still a long way to go.