All The Arguments For Cutting the Safety Net Have Fallen Apart

If Republicans take over both houses of Congress, there’s almost a guarantee that there will be a standoff over government spending. “We own the budget” if we win, McConnell told conservative donors this summer, and the candidates who would constitute the Republican Senate’s margin of control have a clear record of supporting cuts to the social safety net – seeking to privatize Medicare and Social Security, cut food stamps, block the extension of unemployment insurance, and put a balanced-budget amendment into the Constitution. Just as they did when they took over the House, Republicans aren’t likely to pass up the opportunity to show off their enthusiasm for cuts.

Unfortunately for them, all of the arguments they like to deploy in favor of safety-net cuts are collapsing.

The CBO announced today that the federal budget deficit has fallen to a five-year low:

It’s the smallest deficit recorded since 2008. FY2014 was the fifth consecutive year the deficit declined as a percentage of GDP. It is now an estimated 2.8% of GDP, a percentage that puts it below the average of the past 40 years.

There are many reasons for this, both good and bad – but the biggest takeaway is that deficit reduction is a consequence of economic growth, rather than a prerequisite for growth, as politicians of both parties have spent so much time arguing.

One result is that politicians are spending less time talking about the deficit, which in itself is a positive outcome, because it knocks away one of the first arguments for pointlessly cruel safety-net cuts.

Indeed, the “pivot to deficits” that happened before economic recovery was even underway has hurt the economy more in the long term. The last few years of showdowns, shutdowns and compromise cuts have been a huge wasted opportunity:

austerity has also hurt more than we thought — so much so that it might even be self-defeating. That’s right: cutting spending in a slump might actually make debt problems worse.

The rush to trim deficits led to lost jobs, cuts to food stamps, and the end of extended unemployment benefits, long before the recovery

So you’ll be less likely to hear arguments about a future debt crisis that needs to be imminently solved with cuts to the major social safety net programs; instead, you’re more likely to hear what I’ll call the “unleash” argument: the notion that we need overall cuts to the size and role of government in order to jump-start our economy.

This is a much more popular position among the wealthy donor-lobbyist-pundit class who set the agenda in D.C. than it is among most voters. In this year’s large-scale poll of political values from the Public Religion Research institute, majority of people prefer active efforts at job creation — investing in infrastructure and education — rather than the conservative cut-to-grow model. The more economically insecure Americans are, the less they buy the Republican story about how to boost the economy.

Economically insecure voters understand, at a basic level, that something is still wrong in the economy. They’re the ones seeing the reality of it. The elites who have been pushing deficit reduction since before the recovery even began are also the ones who have seen the bulk of what economic growth we’ve had.

It’s almost tiresome at this point to note that the economy is delivering huge returns to a sliver of people, with lower-end households seeing hardly any of the growth, but it bears repeating, because it’s the fundamental fact about the economy.

The idea that we just need to “unleash” the economy by cutting taxes and regulations on “job creators” has a soothing appeal, but it runs headlong into the reality of how the recovery has worked.

Why aren’t wages keeping up with the economy? It’s actually pretty simple, says economist Jared Bernstein: employers don’t feel like they have to give employees a bigger share, because employees don’t have any leverage. “It’s purely an employer’s-got-the-upper-hand story,” Bernstein says. “The U.S. business model has devolved to a point where raising pay is antithetical to sound practice.”

So where is the money going? Into the pockets of the very wealthy. Almost all of corporate profit — twice as much as a decade ago — is being channeled into dividends and stock buybacks, rather than wages and new investment.

There really is already economic growth, already value being generated, but it’s just being cycled around a much, much smaller number of hands.

The PRRI poll, again, shows that people get it, indicating “agreement among Americans that business corporations are not sharing enough of their success with their employees,” with 69 percent of Americans saying businesses aren’t doing enough in this regard.

Why would we expect anything different to happen to the proceeds of, say, turning food stamps into tax cuts?

The trickle-down theology — just get taxes and regulations out of the way and let the magic of the market create jobs — sounds nice, but it’s insulting to workers who understand that the vaunted “job creators” are doing just fine without them.

Along with deficit reduction, cutting away the safety net is pitched as a way to improve the moral fiber of the unfortunate, and fix some vague cultural problem of an eroding work ethic. Rep. Paul Ryan propounds this view, saying a “tailspin of culture” where people don’t learn the “value of work” is the basis of poverty, and that the safety net is really just a “hammock” that deters people from getting jobs.

But Ryan’s story is undermined by the raw reality of median income, corporate profits and our uneven recovery. There still aren’t enough jobs, and the jobs that are available aren’t paying enough. People are working hard to create a recovery, but they’re not benefiting from it. You could try to tell Maria Fernandes how much the “culture of work” has failed, if she were still with us.

Americans didn’t stop valuing work. Work stopped valuing them. And no amount of happy talk about how taking away food stamps promotes “dignity” won’t change that.

In the end, whether it’s cut-and-grow, “unleashing” the job creators, or strengthening a culture of work, all these arguments amount to a smoke screen: at the bottom, the Republican drive to slash the social safety net is purely ideological, completely separated from its bad outcomes on the economy and human lives.

This will be useful to remember when a potential Republican Congress pushes through a Paul Ryan-esque budget that cuts into the programs that help keep people afloat and out of poverty.

Seth D. Michaels is a freelance writer in Washington, D.C. He’s on Twitter as @sethdmichaels.