Obama’s “Shared Sacrifice” Hits the Poor and Middle Class Hardest

Obama’s “Shared Sacrifice” Hits the Poor and Middle Class Hardest
Photo by sci-culturist via Flickr Creative Commons

Editor’s note: This article is a reprint with permission of an editorial that appeared in the May 2, 2011, issue of The Nation magazine, www.thenation.com.

President Obama’s speech unveiling his deficit reduction plan contained few big surprises—by its very premise, it was destined to preserve the faulty assumptions behind the whole deficit discussion—but some of his words were welcome. The president called Social Security and Medicare fundamental American commitments and, in a rebuke to Congressman Paul Ryan [R–Wisc.], left these entitlement programs largely untouched. He also refused to renew Bush’s tax cuts for the wealthy. It’s a pledge Obama has made—and broken—in the past, but let’s take at face value his sincerity on the matter. (All the better to hold him to it.)

From there, the president outlined his plan to reduce the deficit by $4 trillion in the next 12 years, based on the principle of “shared sacrifice.” Here’s what that looks like: For every $1 raised by closing tax loopholes for wealthy Americans, Obama proposes $2 in spending cuts. Two-thirds of those cuts would come from education, health and other social programs while one-third would come from the military budget. The president’s vision of “shared sacrifice,” in other words, hits the poor and the middle class hardest. Meanwhile, wealthy Americans and the military are asked to sacrifice less, even though it was unfunded tax cuts and wars that got us a deficit in the first place.

The problem with starting with such skewed priorities is that Obama will be negotiating with the Republican Party, whose reverse–Robin Hood agenda proposes sacrifices almost entirely from the poor and middle class to pay for tax breaks for corporations and the rich. Indeed, just such a give-and-take is how we ended up with the 2011 budget compromise that averted a shutdown at the expense of $38 billion in spending cuts, the majority of which will come from the departments of education, labor and health.

It’s a rotten deal, which the president curiously chose to hail as “the largest annual spending cut in history.” Any more victories like this and Obama will become a new American synonym for “Pyrrhic.” The cuts in the 2011 budget—“79% of what we wanted,” in Paul Ryan’s words—will be exacted immediately, despite an economy still struggling to recover from the worst downturn since the Great Depression, one in which 25 million people are still bereft of full-time work.

Lost in this discussion is what the country needs: a clear strategy to rebuild the economy and revive the middle class. That requires making the investments vital to our future and figuring out how to pay for them. It requires taxing what we have too much of (financial speculation and extreme concentrations of wealth) and investing in what we have too little of (education like pre-K and affordable college, 21st-century infrastructure, renewable energy). And it means addressing the real source of our long-term debt crisis: not Social Security or Medicare, not “entitlements,” but a broken healthcare system, dominated by powerful drug insurance and hospital lobbies, that costs about twice as much per capita as the health system of any other industrialized country and producing worse results.

The sad fact is, President Obama knows much of this. He spoke compellingly of the injustice of an economy in which the top 1% enjoys quarter-million-dollar windfalls while everyone else struggles. He gets that rising healthcare costs are a burden and that deficit-cutting is no excuse for neglecting our country’s future. But his “balanced approach” conceded too much too early to the deficit hawks and austerity pushers. He needed to reset the debate, but instead, he split the difference.


  • Community Alliance

    The Community Alliance is a monthly newspaper that has been published in Fresno, California, since 1996. The purpose of the newspaper is to help build a progressive movement for social and economic justice.

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