‘Cut Budgets to Kill Jobs’ – And 4 More GOP Schemes to Rig the 2012 Election

If you can see through the bull, you already know one of America’s most immediate problems is high unemployment – not “out of control” government spending. But many in Congress aren’t interested in creating jobs.

No, Republicans have drug out the debt limit debate for weeks, pretending to battle over “spending sprees” and Obama’s “tax obsession” to disguise the fact that the GOP is busy cutting jobs – the exact opposite of saving the economy.

The GOP is betting that if unemployment stays high, recovery stalls and we risk default, they’ll have an easier time booting Obama out of the White House, doing away with the biggest obstacle they face in their quest to:

  • Unravel Medicare,
  • Repeal environmental standards,
  • Eliminate consumer protections, and
  • Enact even deeper tax cuts for the wealthiest 1 percent of Americans.

Watch Senate Minority Leader Mitch McConnell’s brazenly admit it: “That is true; [defeating Obama] is my single most important political goal.”

Forget about the economy and jobs! Forget about what Americans say they want! Let’s undermine the Democratic President!

The current debt limit showdown has proved the theory: Republicans are willing to refuse reasonable compromises and deliberately undermine credit ratings, economic confidence and job growth in order to defeat Obama. The editor of Red State magazine tweeted on July 15 that House Republicans were passing around this piece in a “closed door” meeting. This is what it advises:

“It is you and not Obama who hold most of the cards. Obama has a legacy to worry about. Should the U.S. lose its bond rating, it will be called the ‘Obama Depression.’ Congress does not get pinned with this stuff.”

In other words: “Push the nation to the brink of economic collapse. If we default, Obama will be blamed to Republicans’ political advantage.” If right wingers will broadcast this type of strategy out in the open, it should make you wonder what they are scheming about behind closed doors.

Maryland Gov. Martin O’Malley, the head of the Democratic Governors Association, put it this way:

“I think that there is an extreme wing within [the Republican] party who have as their primary goal not the jobs recovery, but the defeat of President Obama in 2012. They know…their policies of less revenues and less regulation badly failed our country and plunged us into this recession. So their only way of evening the playing field is to keep the president from being successful in the jobs recovery.”

While not everyone is as blunt as McConnell or Red State, Republicans feel beckoned by greater political power. How far will they take it to steamroll Obama? Does serving the country matter to them at all?

Here’s my not so far-fetched take on the thinly veiled Republican plot to overthrow democracy:


1. Cut Budgets to Kill Jobs

When money disappears, so do the jobs it once supported. Republicans seem to be betting on the truism that presidents don’t win re-election with high unemployment – they’re certainly doing their best to pull the rug out from under public sector employment.


The latest job report, released July 8, showed a rise in unemployment from 9.1% to 9.2%, casting an unfavorable light on the White House. But if you look closer, you see:

  • The low private sector growth (130,000) is a seasonally adjusted number. The real number job gain in the private sector was 1,559,000.
  • Job losses in the public sector are steep – particularly on state and local government levels where Republican governors have been driving cuts. Cities and states lost 71,000 (seasonally adjusted) jobs in Q2, erasing more than half the gains the private sector made during that time. In actual (unadjusted) numbers, state and local governments put 555,000 people out of work from April to June.

If you’re on top of the national political scene from Washington to Wisconsin, you know the GOP is peddling fiscal conservatism (for everyone except the already wealthy) as the best way to revive the economy. The trouble is, Republican cuts aren’t fueling economic growth or creating jobs – in fact, the data shows quite the opposite.

—-> Click to access a MS Word chart titled Impact of Republican-Backed Budget Cuts on Jobs and Economic Growth: State and Federal Levels, 2011. It’s an abbreviated but eye-opening look at the impact of Republican austerity in Wisconsin, Ohio, Minnesota, Michigan and the nation as a whole. It shows that:

  • Republicans are pushing for significant cuts to federal transportation, education and R&D spending that would cost as much as 700,000 jobs – or more.
  • Republican “austerity” in the Midwest alone is jeopardizing tens of thousands of public sector jobs – and counting.


2. Tank the Economy and Call it “Obama’s Depression”

“Poor economy, poor job growth, poor President” will be the ubiquitous sound byte bleeping from Republican talking heads over the next 15.5 months. Republicans would never admit that their no-comprise brinksmanship has driven our nation to the brink of default – which may tank the economy, deflate 401K accounts and hike interest rates on everyone.

Update: Now we discover that Republicans’ refusal to compromise on tax revenue has created a greater ripple effect: Standard and Poors downgraded the U.S. credit rating, a first for the nation. I don’t doubt that this result may very well have been an intentional move on the part of Tea Party Republicans.

To cover their tracks, Republicans must deflect. Their best rhetorical foothold with conservative voters is blaming Obama for the economy’s limp.


Three rebuttals unravel the negative spin Republicans are putting on “Obama’s economy”:

1. In what was shaping up to be the worst recession since the Great Depression, in one year GDP growth rose from -5% (at inauguration) to +5% in December 2009. Throughout 2010 and the start of 2011, GDP has averaged about 2.3% growth per quarter – a number just slightly below pre-recession GDP numbers (average of approximately 2.6% growth Q2-Q4 2007).

2. We lost more than 4 million jobs under George W. Bush and another 2 million over the first three months that Obama was in office. It took most of 2009 to see a significant decrease in unemployment, but over the 15 months from February 2010 to May 2011, the economy netted 2.1 million private sector jobs. We still have ground to make up (and some reasons for lackluster private sector job growth are laid out below). However, we’re still seeing jobs uptick at a faster pace now than under the George W. Bush administration.

3. Obama inherited this economic disaster, he didn’t create it. Psychologists say that if the same maxim is repeated often enough, people will start to believe it. So the GOP repeats: “We don’t have a revenue problem, we have a spending problem.”

The truth is, we have both a revenue and a spending problem, but it was created by the George W. Bush administration (which increased U.S. debt by 71.9% or $4.12 trillion while in office).

CBO graph: http://www.bbc.co.uk/news/world-us-canada-14098593

When Clinton left office, spending (green line) was below revenue (blue line) – a surplus. The space between the two black bars represents George W. Bush’s presidency – spending climbs Mt. Everest while revenue plummets down a roller coaster.

Obama’s first two years signal the start of efforts to close the gap, but the shaded areas are just projections. Whether we’re able to close our deficit – without destroying the social contract – will largely depend on whether we can defeat Republicans at the polls in 2012.


3. Center the Debate on “Job-Killing” Taxes

Republicans are counting on sympathetic ears to their call for “no tax increases.” They call Obama “tax obsessed.” The GOP wants to trick swing voters into thinking Obama and Democrats want to raise taxes on all Americans. In fact, Obama and Democrats are just asking a little more from those who can afford it most, such as:

  • Private jet owners (who currently receive a tax break),
  • Individuals who earn over $250,000 annually (who would see income tax increases of only 3-4% points with the expiration of the Bush tax cuts), or
  • Big Oil producers (like Exxon, which earned $30 billion in PROFIT in 2010 and still raked in about $1 billion in taxpayer-supported government subsidies).

Republicans want the national audience to believe that taxing “job creators” is a fool’s way out of a recession. But you’d have to be a fool not to question whether Republican economy policies really create jobs as claimed.

The fact is we have a HUGE problem in America today with the concept of trickle-down economics. For instance:

1. Corporate tax breaks (resulting in low effective tax rates) aren’t correlated with job creation.

The effective tax rate of three large U.S. employers – Citigroup, Johnson & Johnson and General Electric – averaged only 15.2% in 2010. Those three companies cut a total of 23,800 jobs in ONE year (2009-2010). Watch MSNBC’s Rachel Maddow break it down:

2. Larger profits do not lead to significant job or wage growth – they lead to higher quarterly earnings.

Between June 2009 and December 2010, pre-tax corporate profits increased by $464 billion, which accounts for 88% of growth in U.S. real national income ($528 billion). Payrolls during that time rose only $7 billion – or 1.3% of real national income. The already rich took nearly 9 out of 10 pie slices – leaving one slice for the much larger working class. Corporations are stashing their profits under the mattress – not creating jobs.

Exxon, one of the most profitable companies in the world, is a prime example: From 2005 to 2008, Exxon increased profits by 25% (from $36 to $45.2 billion), but cut their workforce by 3,800 jobs during the same time period.

You may ask: Why aren’t major corporations hiring when they’re making large profits? Well, they’ve discovered that:

  • Remaining workers are motivated to higher productivity when unemployment rates are through the roof.
  • High unemployment rates also help keep wages low because employers are no longer competing for workers.

Of course, lack of economic certainty plays a factor, particularly since the country risks defaulting in T-Minus 15 days if no debt-limit deal is reached.

However: Given that Republicans and big business are working hand in hand to undo Obama’s consumer protections (in the financial and health insurance industries) and to close budget deficits by placing disproportionate burdens on the middle class, one must start to wonder if lower-than-expected job growth is tied to a political agenda.


4. Ignore a Significant Cause of Job Losses: Outsourcing

An undeniable driver of high unemployment is outsourcing. The numbers are staggering. From 1999 to 2009, America’s biggest multinational corporations laid off 2,900,000 American workers and replaced them by hiring 2,400,000 people overseas.

WSJ Report. Data does not include banks. http://on.wsj.com/pv65Eu

If those 2.4 million jobs outsourced between 1999 and 2009 still belonged to Americans,

  • We’d have a 17% reduction in the number of unemployed Americans (11.7 million instead of the current 14.1 million).
  • That translates into a job for 1 in every 6 currently unemployed Americans.
  • It also would mean a drop in unemployment to approximately 7.6% (from 9.2%).

Keep in mind that these figures do not even account for American jobs shipped overseas from 2009-2011.

Is Congress concerned about these job losses? Well, as expected, Democrats are paying attention and Republicans are blocking progress. In September 2010, Senate Democrats introduced a bill to end certain tax breaks for companies expanding overseas while giving new tax incentives to businesses bringing jobs home. Republicans, working with the U.S. Chamber of Commerce, successfully trounced the measure.


5. Practice Political Obstructionism & Voter Suppression

By now, it shouldn’t surprise you that Republicans are sacrificing job-creating legislation for the sake of partisan political games. House GOP leaders have been using the debt limit standoff to justify the stalling of employment-boosting legislation, such as Obama’s proposed infrastructure initiatives and three free-trade agreements.

Last week, House Republican Majority Leader Eric Cantor boasted of the do-nothing attitude:

“Nothing can get through the House right now. Nothing.”

If the scenario sounds familiar, it is. In December 2010, Republicans held the nation hostage (obstructing medical care for 9/11 responders, jobless benefits, and a nuclear disarmament treaty with Russia) to force the extension of George W. Bush’s deficit-boosting tax cuts for the wealthiest 1 percent. This pattern will continue until we vote the party of the rich out of office.


On top of their unabashed Congressional obstructionism, the Republican Party is executing a coordinated nationwide voter suppression effort to disenfranchise students, the poor, the elderly and ethnic minorities. President Bill Clinton has compared these GOP-backed voter ID and registration tactics to Jim Crow era laws that discouraged African Americans from voting.

It gets worse, folks:

  • Right wingers have been caught posing as liberals for the purpose of discouraging Democrats from voting.
  • Wisconsin Republicans ran fake spoiler candidates in the Democratic primaries this month (and the 6 true Democrats defeated every one of them).
  • Right-wing ideologues like the Koch brothers are trying to manipulate the national mindset one Wikipedia page and blog at a time.


Use Your Power: Vote in Every Election

Whether or not Republicans are purposely killing jobs to sabotage the President’s re-election and win more Congressional seats, the fact remains that they’re prioritizing unnecessary corporate tax cuts over public sector jobs. They’re not doing their jobs – unless they were elected to help the rich get richer and leave the rest of America to fend for itself.

Until now, enough voters have bought into the GOP propaganda machine to keep the party powerful – and enough liberal thinkers have remained disengaged. But I see a new tide growing.

Since the 2010 mid-terms, the Tea Party element has become too extreme (voting to kill Medicare, stripping public employees of benefits and bargaining rights, attacking women’s and gay rights) and more and more ordinary Americans are banding together and standing up for themselves. Democrat Kathy Hochul’s special election victory in New York’s 26th and the dogged recall efforts in Wisconsin are signaling a shift.

People are paying attention to the true nature of the Republican agenda and its consequences for ordinary Americans. Please:

  • Nurture that public backlash.
  • Speak out within your circles.
  • Vote to oust GOP incumbents in national, state and local elections.
  • Help counteract GOP voter suppression with information and by volunteering for voter registration drives.

With a Republican President in the White House and/or control of the Senate, Republicans will have the leverage they need to fully enact their agenda. On the other hand, if we remove them from power in the House, we can reclaim the Obama presidency.

We can’t just hope and pray Republicans don’t get their way. We must act.

Will you do your part?

Click here to pledge to vote via Facebook.

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7 Responses

  1. Harolynne Bobis
    August 2, 2011 6:58 am #

    Don’t you think the President and the Administration should be sharing with the American public, through the DNC and the state Democratic Parties or even our Representatives and Senators in Congress what he is trying to do?

    Those speeches to the nation are not cutting it. The language is the same language as the Republicans who, I agree, are trying to kill his Presidency every way they can. So, it turns off Democrats because we think the President has gone over to the Dark Side.

    I’m going to vote, but I’m not sure that my son or husband will and my son was a great and early supporter and, in fact, his enthusiasm was why I began to think of Obama as the next President.

  2. Mike Sax
    August 2, 2011 10:17 am #

    Great job! You have it exactly right: whether they are tyring to tank the economy out of design or just believing in really bad policies-I think it’s a bit of both actually, they reinforce-that is what they are doing.

    I do think that the outcome of this current farce wasn’t terrible-or not as bad as it could have been.

    And while it hasn’t got much notice-understandably perhaps because of all the focus on the debt fight-Obama was able to achieve some pretty important things for progs recently.

    For one the new agreement he got with the auto industry to agree to pretty strong fuel efficiency standards-an average of 54.5 mpg by 2025- a few years this was unthinkable.

    Under Bush a minimum of 35 was seen as too high. The auto industry which in the past was so recalcitrant about any standars has now become very cooperative-gratitude for Obama’s bailing them out…

    Also HCR is now gonna provide very generous terms for birth control for women making them just about free.

    Thank you for all the visits I received from you folks here at LiberalLamp yesterday at my website http://diaryofarepublicanhater.blogspot.com/

    This is what friends do(as progs) and I very much appreciate. As I mentioned yesterday I am starting a new progressive radio show soon and will definitely remember you!

  3. Branda
    August 2, 2011 11:56 am #

    There are definitely many additional details to take into thought, however thanks for sharing this post.

  4. Yalonda sinde
    August 2, 2011 5:21 pm #

    I see their 5 point plan to take down Obama and interested in the progressive plan to get the Republicans out.

  5. James Brown
    August 4, 2011 3:11 pm #

    I said, before the election, that if Obama won, the GOP was going to do anything in its power to prevent any signs of economic recovery; for the simple fact that a recovery now would make it very difficult to explain away why the country did so well under Clinton and so poorly under Bush.
    I see that I was right, but I never imagined that they would rather play Russian Roulette with the country’s future than see that point proven

  6. Pevy
    August 7, 2011 10:40 pm #

    Thanks for your sharing. Terrific site.

  7. Renate Hellyer
    August 14, 2011 1:56 pm #

    Very interesting post. Thank You.

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