I’m following — some would say obsessively — the byzantine maneuvers on Capitol Hill. Wasn’t going to write about them, but can’t stay focused on anything else.
Bills passed in the House that can’t pass in the Senate. Bills offered in the House that can’t pass there because some Republican members think they’re not extreme enough.
I’m gripped by suspense. Will Congress raise the debt ceiling before the drop-dead date? What will happen if it doesn’t? What will happen if it does, but only for a short period of time? Will the President follow through on his almost-but-not-quite veto threat?
And I’m profoundly disheartened because whatever deal gets passed — and I’m pretty certain one will be — will do grave damage to low and moderate-income Americans.
Many economists — not all of them liberals — say that spending cuts should wait until the economy is growing at a healthier pace. Say that won’t happen until the unemployment rate drops to something closer to normal because, needless to say, jobless people and their families don’t buy more than they absolutely have to.
Yet all the deficit reduction plans afloat would cut spending next year below the already-cut levels in the continuing resolution that’s the substitute for a regular budget now.
And none of them would shield safety net programs that get their funding from annual appropriations.
These programs, recall, don’t just protect poor people from destitution. They also create and preserve jobs — both directly in the agencies that administer them and indirectly because they give beneficiaries some spending power.
Nobody knows what all this will mean for the District of Columbia because nobody knows how either the crisis or the solution will play out. But we can make some educated guesses.
The Chief Financial Officer has warned of short-term financing troubles if the debt ceiling isn’t raised. Also of longer-term constraints from what I guess he foresees as losses of federal funds due to cuts in Medicaid and other federal programs, e.g., aid to public education.
He expresses worries about a bond downgrade due to lack of ready cash and impacts on revenues the District gains because the federal government is headquartered here.
There could, however, be other impacts. If interest on Treasury bonds rises because they’re no longer viewed as 100% safe, interest on other new bond issuances will rise. Interest on loans in the private sector too.
Include here not only financing for development projects, but home mortgages, car loans, higher education loans and plastic debt. Hardly a stimulus to local consumer spending.
And what about recovery in our anemic job market? The National Employment Law Project gives us a partial answer.
A fact sheet it’s not yet posted provides state-by-state (and District) figures for jobs lost or gained since the recession began, plus new jobs that would have to be created to accommodate growth in the working-age population.
The District, it shows, would have to gain 30,100 jobs just to get back to where we were in December 2007.
How can we possibly get anywhere near this number when federal spending cuts will mean widespread job losses?
We’ve got residents working in federal agencies, in local companies that provide them with contract services, in District agencies that depend in part on federal funds, in the organizations they contract with and in a large number of for-profit businesses that grow, shrink or die on the basis of consumer spending.
All vulnerable to layoffs as the federal budget cuts unroll. More certain hardships for our most vulnerable neighbors too.
I don’t recall when I’ve ever felt so anxious about our community — and our country. And I’ve been watching federal policymaking for a long time.