Homeless folks have real solutions to the housing crisis
February 27, 2014
When Bill de Blasio took office on January 1, he inherited a broken, bloated and expensive homeless shelter system that cost almost $1 billion to operate in 2013. He also inherited neighborhoods dotted with vacant buildings and lots that represent both potential housing and jobs. For New York’s homeless, there is a Kafkaesque paradigm where so-called affordable housing is in fact unaffordable due to the federal government’s Area Median Income guidelines.
Those who can’t afford housing are the same unemployed, or low-wage workers, seniors, disabled and just poor New Yorkers in the shelter system. On bitterly cold nights this winter, the shelter-industrial complex housed more than 50,000 adults and children — enough to fill Yankee Stadium. That didn’t include those using the domestic violence shelter system and the untold numbers of homeless folks sleeping in churches, mosques and synagogues. Nor does it include the thousands sleeping in trains, public transit facilities or parks. It doesn’t include the hundreds of thousands doubled or tripled up with friends and family hoping for a break so that they don’t have to go into the shelter system.
Real Roots of the Problem
Homelessness has been framed as the result of individual dysfunction and pathology. “Oh, they’re mentally ill, or they need to get a job,” — this mantra has been repeated by politicians and media for two decades. Picture the Homeless encourages the de Blasio administration to look at the big picture, to take into account rising rents and stagnant incomes at the bottom of the wage scale. Forces like gentrification, property warehousing and disinvestment in effective housing programs such as Section 8 have led us to where we are today.
The bottom-line cause of homelessness is the high cost of housing. Real estate development here has been geared to business interests, hotels and high rises, offices and office towers. When there is new housing construction, it’s for the super rich. Banks and landlords keep buildings empty while they wait for neighborhoods to gentrify, and to get rid of protections on rent-stabilized apartments.
Mayor Michael Bloomberg took away the homeless priority for permanent housing solutions like Section 8 and public housing, replacing them with time-limited rental subsidy programs (first Housing Stability Plus and then the Advantage programs) that were doomed from the start.
Past administrations have cried poverty when asked why they don’t prioritize housing for homeless people, but that’s a lie. The money’s there, it’s just being wasted on a politically connected shelter-industrial complex. A billion dollars a year could house a lot of people. Most shelters get two to three times as much money per month for each homeless household as it would cost to pay their rent.
In 2011, we partnered with the Hunter College Center for Community Planning and Development to devise and execute a replicable methodology for how the city could conduct a vacant property census. We found enough empty buildings and lots to house up to 200,000 people, and that was just in one-third of the city. But the city doesn’t keep track of vacant property and the little bit of money that is out there is being used to house people in shelters.
Every homeless person is different, and it’s true that mental illness and substance abuse play a role in some people losing their housing, but plenty of very wealthy people have issues of substance abuse or mental illness. The root issue is poverty. Public policy needs to address the systemic causes of homelessness. No mayor or president can implement a policy to stop people from having mental illness or losing their jobs, but they can make it so that everyone can afford housing.
There are numerous factors that contribute to record levels of homelessness, like how people coming home from jail with a record are excluded from housing, so there’s nowhere for them to go. Banks are still redlining in certain communities. Institutional racism is also a huge problem — over 90 percent of homeless families in shelters are African-American and/or Latino. Predatory lending has been targeting people of color. Ninety-nine percent of the people who go into housing court get no legal representation, so many of them end up losing their homes.
There’s no cohesive overall plan between government agencies that serve low-income people, and that adds up to a lot of resources being wasted. There’s no unity or collaboration between housing courts and the welfare and shelter systems. HRA, DHS, NYPD — it’s a whole lot of alphabet soup that doesn’t add up to anything.
People say homeless people should go get jobs — but people have jobs! The pay just doesn’t match the rental market. Very low wages, including social security and other income forms for folks who aren’t working, plus inadequate income supports, plus high rents, equal homelessness. It’s simple math.
At Picture the Homeless, we don’t just complain about problems. Homeless people know what’s not working, and they know what needs to change. That’s why our organizing campaigns have concrete policy demands of the new administration.
For starters, it’s unacceptable that the city has no idea how much property is currently vacant. We have to have conduct an annual citywide count of vacant buildings and lots, so we know what kind of resources are out there to develop new housing — and who’s keeping housing off the market. Legislation that would empower the city to do such a count was stalled for three years in the City Council under Christine Quinn. We were heartened to see it identified as a necessary solution on Bill de Blasio’s campaign website, as well as a priority for the City Council’s Progressive Caucus.
The new administration could immediately utilize a small portion of the Department of Homeless Services’ (DHS) shelter budget (even just 1 percent would be almost $10 million!) and create permanent rental subsidies so homeless people can get out of shelters. That funding could also support a pilot project for innovative housing models like community land trusts, which have the potential to create permanently-affordable, democratically-controlled housing for folks at all income levels, as well as supporting small businesses and incubating jobs that pay a living wage.
The city should take all the property whose owners owe taxes on water or violations, and put it into a land bank and develop it for those who really need it. Property that the city acquires through the Third Party Transfer program should be prioritized for nonprofit housing developers, including community land trusts. And the city should create and expand community land trusts that will be permanently affordable to the people who live there.
The new administration could also limit what is considered “affordable housing” to the city of New York. Right now, “affordable housing” can go to folks making upwards of $80,000 a year, because it’s based on Area Median Income calculations that factor in affluent parts of Westchester and Long Island.
No mayor or president can implement a policy to stop people from having mental illness or losing their jobs, but they can make it so that everyone can afford housing.
As my mother, a/k/a tillyjane, explained to me once when I was a young man, in our society we don’t pay people according to how hard they work, or how important their jobs are. If we did, teachers would be at the top of the pay scale. In our society, we pay people according to how well they can make the money move.
The examples easiest to perceive are top-tier athletes and actors. Because a big name star can increase the take at the gate or the box office, they’re paid more. Essentially, it’s a form of commission. Likewise people who work in high end sales, or Wall Street level finance. They’re commissioned, either directly or indirectly, because of the financial transaction volume they generate. Likewise C-level officers of major corporations, who are compensated as highly as they are because they are supposed to be able to influence corporate revenue.
The 1% are where they are not because they work harder, or because they work smarter, but because they are able to influence the flow of money.
Men like Perkins and Schiff and the shills at the Wall Street Journal have a profound lack of empathy, something that is common in narcissistic personalities. In fact the criteria listed for the psychiatric condition of Narcissistic Personality Disorder are present in many highly successful and powerful people, in politics, business, government, entertainment and even religion. Thus the criteria serve well to illuminate the attitudes of such people, even if they themselves do not match enough of the criteria meet the clinical diagnosis.
When men no longer can empathize with other human beings, and only see others, especially the weak, the poor, those different than them and the disabled as a means to their own riches, power or success; the stage is set for great human tragedy.
One manager at the apartment complex where I worked while in college told me, repeatedly, that she knew I was “Okay” because my little Nissan was clean. That I had worn a Jones of New York suit to the interview really sealed the deal. She could call the suit by name because she asked me about the label in the interview. Another hiring manager at my first professional job looked me up and down in the waiting room, cataloging my outfit, and later told me that she had decided I was too classy to be on the call center floor. I was hired as a trainer instead. The difference meant no shift work, greater prestige, better pay and a baseline salary for all my future employment.
I have about a half dozen other stories like this. What is remarkable is not that this happened. There is empirical evidence that women and people of color are judged by appearances differently and more harshly than are white men. What is remarkable is that these gatekeepers told me the story. They wanted me to know how I had properly signaled that I was not a typical black or a typical woman, two identities that in combination are almost always conflated with being poor.
More snippets from this article about why people in poverty buy expensive products that they “can’t afford”. When it comes to upward mobility and standards of living, being able to own and wear status markers makes a HUGE difference.
definitely important to understand
There are tens of millions of people unemployed, looking for work, wanting to work (and) there are huge resources available. Corporate profits are going through the roof, there’s endless amounts of work to be done – just drive through a city and see all sorts of things that have to be done – infrastructure is collapsing, the schools have to be revived. We have a situation in which huge numbers of people want to work, there are plenty, huge resources available, an enormous amount to be done, and the system is so rotten they can’t put them together.… …There is plenty of profit being made by those who pretty much dominate and control the system. We’ve moved from the days where there was some kind of functioning democracy. It’s by now really a plutocracy.
The true enemies of Christmas – and of Christian hope, as articulated in this season by Pope Francis – are those who pretend to befriend the poor by taking bread from their children’s mouths. Both the mean old Grinch and Ebenezer Scrooge were saved from villainy before their stories ended. Our modern political misers, clothed in self-righteousness, have no such prospect of redemption.
Lorinda Fox of New Albany, Ind., hasn’t been to a doctor since her last child was born 21 years ago. Poor and uninsured, she treats her illnesses with over-the-counter remedies.
At age 58, she knows she’s taking chances with her health, especially since she recently began having heart palpitations and chest pain.
“I’ll do the same thing I always do — gut it out,” said Fox, who lives with her hearing-impaired daughter and earns about $12,000 a year working in retail. “I don’t know what else I can do.”
If Fox lived in Kentucky, she would qualify for expanded Medicaid next year under the Affordable Care Act. But she lives in a state where she makes too much to qualify for traditional Medicaid, and politicians have chosen not to expand Medicaid as Obamacare intended, contending that Indiana taxpayers can’t afford it.
Her predicament reveals an irony in the way Obamacare’s Medicaid expansion has played out: Residents in similar circumstances face vastly different health coverage options, depending on which side of the Ohio River they live.
It wasn’t supposed to work that way.
twelve thousand dollars a year.
too little to live on. too much for medicaid.
14. Live with chronic pain. Those earning less than $12,000 a year are twice as likely to report feeling physical pain on any given day.
The top 100 advertisers spent more than $100 billion last year trying to convince us we need newer cell phones, faster cars, better makeup, and more credit card debt. They inundate us with billboards, banner ads, and TV spots telling us we’re not good enough unless we buy their stuff. Do we really think this relentless barrage of advertising has no impact on our behavior, our sense of worth, our understanding of what we really need?
Marie Antoinette, meet Ronald McDonald.
A lot of people are angry about McDonald’s new financial advice website for employees, an ill-conceived project which drips with “let them eat cake” insouciance. “Every dollar makes a difference,” McDonald’s lectures its struggling and often impoverished workers.
But it’s time to ditch the resentment and offer McDonald’s a word of thanks. It has just performed an invaluable service for campaigns like Raise the Minimum Wage, petitions like this one, and July 24′sNational Day of Action by serving up a timely and exhaustively researched brief on their behalf. This new website provides invaluable data for a living-wage “McManifesto.”
You want fries with that?
Get this: The new employee website, co-created with Visa, helpfully suggests that people who work for this Fortune 500 corporation begin the financial planning process by taking a second job.
As a number of ticked-off writers have observed, McDonald’s also pretty much advises its employees not to clothe themselves, heat their homes, seek educational advancement, or pay more than $600 in rent and $20 in health insurance premiums per month. (As Daniel Gross notes, that would pay for about two days of coverage.)
And, as if that’s not enough, there isn’t even any money for food in the McDonald’s sample budget. Apparently for McDonald’s employees the phrase “Happy Meal” means you’re happy whenever you’re lucky enough to scrounge a meal.
People were seething at the website’s arch touches, which include interactive games like “Financial Football” and “Road Trip to Savings,” and were thunderstruck by the lordly obliviousness behind pronouncements like “Knowing where your money goes and how to budget it is the key to your financial freedom.”
(Not when there’s not enough of it, Sir Ronald.)
Peter S. Goodman notes that McDonald’s receives a fortune in “corporate welfare.” In fact, government policies help most of the country’s underpaying mega-corporations keep expanding through a series of tax breaks and other concessions.
Economically, we’re super-sizing them.
Heart of the matter.
Many McDonald’s workers need public assistance to survive, which often includes Medicaid. That’s right: The public is even subsidizing McDonald’s low wages and lousy benefits when it comes to health care.
Subsidize McDonald’s? For health care? With that food it should be hit with a surcharge.
Fun fact: McDonald’s says it serves nine million pounds of French fries globally every day. Since slightly more than half its franchises are in the US, that means Americans presumably consume between four and five million pounds of this lard-laden, massively space-time curving starchy mass every 24 hours.
Each McDonald’s French fry is a tiny, fat-drenched drone missile aimed directly at the American cardiovascular system. One can only imagine how much of our nation’s runaway health care costs are traceable to this one corporation alone.
And we’re subsidizing its health care, rather than the other way around.
In 2012 McDonald’s had gross profit of more than $10 billion on annual revenues of $27 billion. That’s up more than 12 percent from 2010. The lard business is good.
Visa, which for some reason has been spared most of this week’s online fury, deserves its own share of negative attention. As the financial half of this website team, Visa presumably provided the handiwork which reminds struggling fast-food employees that “every day and every dollar make a difference.”
Visa, like McDonald’s, is a coddled corporation. A government less corrupted by Big Money would have broken up this monopolistic enterprise long ago, especially given its tendency to abuse its marketplace dominance.
Visa was originally created by one fraud-ridden and bailed out megabank, Bank of America, and continues to enrich another. And, as CNN Money reported, its 2008 IPO “created a nice windfall for its owners, including its largest shareholder JPMorgan … about $1.3 billion on its 29 million shares.”
JPM made the headlines with yet another major fraud just this morning, adding piquancy to the knowledge that it bleeds us a little every time we swipe a credit card or debit card. And yet these two corporate anti-heroes have performed a great service by making the case so beautifully:
Americans can’t live on today’s minimum wage.
With a side of cynicism.
If the minimum wage had kept pace with productivity it would now be $16.54 per hour, according to the Center for Economic Policy Research. It would be $10.74 if it had merely kept pace with inflation – although McDonald’s and VISA have now demonstrated that this isn’t enough to live on either. (The minimum wage is currently $7.25.)
That adds an extra dose of cynicism to the website’s observation that “You can have almost anything you want as long as you plan ahead and save for it.”
That lie carries a special sting for the millions who have been locked out of the American Dream. Thanks to the deliberate policy decisions of the last four decades – breaks and giveaways for corporations, coupled with lost income for the majority – social mobility and income fairness have plunged in this country.
No matter how much you try to save on a minimum wage, a better life will remain beyond your means – until something changes.
Are there no roommates? Are there no malt shops?
A McDonald’s-like tone-deafness let Washington Post blogger Timothy B. Lee in for a heavy dose of online criticism too, when he defended the McDonald’s/Visa budget. Here’s an excerpt:
“Gawker’s Neil Casey calls $600 per month for rent a ‘laughably small’ figure, but Casey should spend more time outside the Northeast Corridor. When I lived in St. Louis, my roommate and I each paid $425 per month …”
Roommate? That clichéd thinking reflects one of the key misconceptions about minimum-wage workers: that they’re teenagers or twenty-one year olds just starting out in life. It’s closely related to the myth that most fast-food workers are fresh-faced kids serving root beer floats at the local malt shop.
In fact, less than 16 percent of minimum-wage workers are teenagers. Many are parents, which makes the “roommate” suggestion especially silly. More than seven million children live in a minimum-wage home. And many minimum-wage workers live in poverty. (See Real Faces of the Minimum Wage for more.)
You deserve a break today.
America is crying out to McDonald’s as if with one voice: “Stuff that financial planning website in your Egg McMuffin.”
The pain and anger is palpable. But it’s not enough. What do we do?
For one thing, we can sign a petition supporting a bill which would raise the minimum wage to $10.10 – and then demand it be raised even further. We can back the minimum-wage campaigns being waged around the country, which build on an exciting grassroots movement of fast-food workers in cities like Detroit. (There’s more information here.)
McDonald’s should join the wage movement it so ably served this week, because economic misery is hurting its bottom line in the US and worldwide. And while its new and successful “dollar menu” shows that it’s willing to profit from hard times, that’s only a short-term fix in a declining economy.
Pay your workers what they deserve, McDonald’s. But the rest of us won’t wait for you. We’re taking action, because we agree with you about one thing:
Every dollar makes a difference.
> U.S. workforce: 120,000
> CEO compensation: $28.9 million
> Revenue: $13.3 billion
> Net income: $1.4 billion
> No. of U.S. stores: 7,049
Starbucks Corp. (NASDAQ: SBUX) employs 120,000 workers across the United States. Howard Schultz, the company’s CEO, has become a billionaire by turning Starbucks from a small coffee retailer into one of the world’s most famous brands. Last year, Schultz took home nearly $29 million in total compensation. Schultz is often viewed as a progressive executive, due to his support of gay marriage and his request that customers not bring guns into Starbucks locations. In an interview with CNBC in March, Schultz cautiously supported a minimum wage hike. However, according to Glassdoor.com, baristas at Starbucks are paid an average of less than $9 an hour. Schultz has downplayed the relevance of these figures.
9. TJX Companies
> U.S. workforce: 138,211 (est.)
> CEO compensation: $21.8 million
> Revenue: $25.9 billion
> Net income: $1.9 billion
> No. of U.S. stores: 2,355
The TJX Companies Inc. (NYSE: TJX) operates Marshalls, TJ Maxx and HomeGoods in the United States. The company’s stores are off-price retailers, meaning they buy unsold inventory from manufacturers and other retailers and resell it at a discount. TJX’s sales have grown in the past four consecutive fiscal years as the retailer also boosted its operating profit margin. Despite the company’s success, sales associates at its stores earn less than $8 an hour on average, according to Glassdoor.com.
> U.S. workforce: 175,700
> CEO compensation: $13.8 million
> Revenue: $27.7 billion
> Net income: $1.3 billion
> No. of U.S. stores: 844
Annual revenue at Macy’s Inc. (NYSE: M) has risen slightly over the past four years, up from roughly $25 billion in 2008 to more than $27.7 billion at the end of its latest fiscal year. Macy’s, the second-largest department store in the United States, exceeded Wall Street’s expectations this past quarter, posting large increases in sales and earnings from the year before. Earlier this year, members of the United Food and Commercial Workers Union ratified a five-year agreement with Macy’s that should help protect the benefits of nearly 700 Macy’s employees in Maryland and Washington, D.C. According to Glassdoor.com, associates are paid under $9 an hour on average.
7. Darden Restaurants
> U.S. workforce: 203,389 (est.)
> CEO compensation: $6.4 million
> Revenue: $8.6 billion
> Net income: $412 million
> No. of U.S. stores: 2,105
Revenues at Darden Restaurants Inc. (NYSE: DRI), the parent company of chains such as Olive Garden and Red Lobster, rose from just $7.2 billion in 2009 to $8.6 billion in fiscal 2013. According to Morningstar’s analysis, operating margins have been some of the best in the industry in the past few years. Additionally, instead of raising wages, the company’s funds have been used effectively “to fund growth concepts and enhance total shareholder returns.” Yet the results have not been enough for investors, some of whom have pushed for the company to split and continue to cut costs faster. In 2013, Fortune named Darden one of the “100 Best Companies to Work For,” citing access to low-cost health insurance for part-time employees. Still, pay for many workers at Olive Garden and Red Lobster is frequently less than $10.00 per hour, according to Glassdoor.com. However, many of these employees may receive tips in addition to their base pay.
6. Sears Holdings
> U.S. workforce: 246,000
> CEO compensation: $1.3 million (Louis D’Ambrosio, former CEO)
> Revenue: $39.9 billion
> Net income: -$930 million
> No. of U.S. stores: 2,073
Sears Holdings Corp. (NASDAQ: SHLD), owner of both Sears and Kmart, is in heavy competition with other department stores. The median hourly wage for department store workers was just $9.83 in 2012. At Sears, sales associates averaged slightly more than $8 an hour, while cashiers averaged $7.70 per hour. Kmart offered similar pay to its workers as well, with 105 cashiers and 75 sales associates reporting to Glassdoor.com that their hourly wages were less than $8.00. However, Sears Holdings may not have the necessary ability to increase its employees’ pay. Sales have slipped in the past few years, plunging from $47.8 billion in fiscal 2008 to less than $40 billion in the most recent year. The company has also failed to post an operating profit in either of the past two full fiscal years.
5. Yum! Brands
> U.S. workforce: 694,712 (est.)
> CEO compensation: $14.2 million
> Revenue: $13.6 billion
> Net income: $1.6 billion
> No. of U.S. stores: 18,069
Yum! Brands Inc. (NYSE: YUM) CEO David Novak received more than $14 million worth of total compensation in the past fiscal year. The company’s revenue rose from $11.3 billion to $13.6 billion. Hourly wages for workers at its KFC, Pizza Hut and Taco Bell chains, however, are still often less than $8 an hour. Yum! Brands has continued to expand, opening more than five new restaurants a day outside the United States in 2012. However many American workers have expressed frustration that the company’s success has not led to an increase in their pay. This summer, fast-food workers at Yum! Brands and other fast-food chains staged protests across the country, demanding higher wages.
> U.S. workforce: 343,000
> CEO compensation: $11.1 million
> Revenue: $96.8 billion
> Net income: $1.5 billion
> No. of U.S. stores: 2,418
The Kroger Co. (NYSE: KR) employs 343,000 workers in 2,418 stores across the country. The company operates stores under several names, including Kroger, City Market, Dillons and others. A majority of Kroger’s employees are covered by collective bargaining agreements between the company and different unions. In the past few months, Kroger has agreed to terms with unions covering thousands of workers in Virginia and Texas. Kroger’s net profit was $1.5 billion at the end of the most recent fiscal year.
> U.S. workforce: 361,000
> CEO compensation: $20.6 million
> Revenue: $73.3 billion
> Net income: $3.0 billion
> No. of U.S. stores: 1,778
Target Corp. (NYSE: TGT) had 361,000 employees working at 1,778 stores in the United States at the end of 2012. The average listed salary on Glassdoor.com for a cashier or an employee on the Target sales floor is less than $9 an hour. In response to Target opening on Thursday, in advance of Black Friday, Target workers drafted a petition last year to “save Thanksgiving.” More than 300,000 people signed the petition. This year, Target stores will open on Thanksgiving Day at 8 p.m. That is an hour earlier than last year.
> U.S. workforce: 739,055 (est.)
> CEO compensation: $13.8 million
> Revenue: $27.6 billion
> Net income: $5.5 billion
> No. of U.S. stores: 14,157
In the restaurant industry, the hourly median wage was just over $9.00 as of 2012. However, many McDonald’s Corp. (NYSE: MCD) employees are paid far less, with cashiers and crew members often earning only the minimum wage. In October, several McDonald’s employees were arrested for protesting their wages at the Union League Club of Chicago, where McDonald’s President Jeff Stratton was giving a speech. Between 2008 and 2012, sales and profit margins at McDonald’s have increased. Despite the company’s growth, employees are still hurting. All but admitting the low wages, McDonald’s encourages employees to enroll in food stamps and welfare programs.
> U.S. workforce: 1.4 million
> CEO compensation: $20.7 million
> Revenue: $469 billion
> Net income: $17.0 billion
> No. of U.S. stores: 4,759
There are 1.4 million Wal-Mart Stores Inc. (NYSE: WMT) associates working at the company’s 4,759 U.S. stores. Walmart recently announced it would launch Black Friday sales at 6 p.m. on Thanksgiving Day. Critics of Walmart see this as adding insult to injury — forcing retail workers who already earn low wages to cut holidays short. Criticisms like these have been part of an onslaught of claims that Walmart underpays its workers. Walmart disagrees, saying that “for tens of thousands of people every year, a job at Walmart opens the door to a better life.” According to the company, a full-time hourly wage is $12.83. Some argue that the company’s number is inflated, however, reflecting the salaries of higher-paid employees. Hourly wages for sales associates are less than $9.00, according to Glassdoor.com. Walmart’s net income rose to $17 billion last year.
The Triumph of the Right
Conservative Republicans have lost their fight over the shutdown and debt ceiling, and they probably won’t get major spending cuts in upcoming negotiations over the budget.
But they’re winning the big one: How the nation understands our biggest domestic problem.
They say the biggest problem is the size of government and the budget deficit.
In fact our biggest problem is the decline of the middle class and increasing ranks of the poor, while almost all the economic gains go to the top.
The Labor Department reported Tuesday that only 148,000 jobs were created in September — way down from the average of 207,000 new jobs a month in the first quarter of the year.
Many Americans have stopped looking for work. The official unemployment rate of 7.2 percent reflects only those who are still looking. If the same percentage of Americans were in the workforce today as when Barack Obama took office, today’s unemployment rate would be 10.8 percent.
Meanwhile, 95 percent of the economic gains since the recovery began in 2009 have gone to the top 1 percent. The real median household income continues to drop, and the number of Americans in poverty continues to rise.
So what’s Washington doing about this? Nothing. Instead, it’s back to debating how to cut the federal budget deficit.
The deficit shouldn’t even be an issue because it’s now almost down to the same share of the economy as it’s averaged over the last thirty years.
The triumph of right-wing Republicanism extends further. Failure to reach a budget agreement will restart the so-called “sequester” — automatic, across-the-board spending cuts that were passed in 2011 as a result of Congress’s last failure to agree on a budget.
These automatic cuts get tighter and tighter, year by year — squeezing almost everything the federal government does except for Social Security and Medicare. While about half the cuts come out of the defense budget, much of the rest come out of programs designed to help Americans in need: extended unemployment benefits; supplemental nutrition for women, infants and children; educational funding for schools in poor communities; Head Start; special education for students with learning disabilities; child-care subsidies for working families; heating assistance for poor families. The list goes on.
The biggest debate in Washington over the next few months will be whether to whack the federal budget deficit by cutting future entitlement spending and closing some tax loopholes, or go back to the sequester. Some choice.
The real triumph of the right has come in shaping the national conversation around the size of government and the budget deficit – thereby diverting attention from what’s really going on: the increasing concentration of the nation’s income and wealth at the very top, while most Americans fall further and further behind.
Continuing cuts in the budget deficit – through the sequester or a deficit agreement — will only worsen this by reducing total demand for goods and services and by eliminating programs that hard-pressed Americans depend on.
The President and Democrats should re-frame the national conversation around widening inequality. They could start by demanding an increase in the minimum wage and a larger Earned Income Tax Credit. (The President doesn’t’ even have to wait for Congress to act. He can raise the minimum wage for government contractors through an executive order.)
Framing the central issue around jobs and inequality would make clear why it’s necessary to raise taxes on the wealthy and close tax loopholes (such as “carried interest,” which enables hedge-fund and private-equity managers to treat their taxable income as capital gains).
It would explain why we need to invest more in education – including early-childhood as well as affordable higher education.
This framework would even make the Affordable Care Act more understandable – as a means for helping working families whose jobs are paying less or disappearing altogether, and therefore in constant danger of losing health insurance.
The central issue of our time is the reality of widening inequality of income and wealth. Everything else — the government shutdown, the fight over the debt ceiling, the continuing negotiations over the budget deficit — is a dangerous distraction. The Right’s success in generating this distraction is its greatest, and most insidious, triumph.