Federal cuts will impact California

by Brian Leubitz

When the big stimulus came out, we complained about the relative paucity of aid to states.  When state budget deficits ballooned across the country, we complained about the lack of state aid.  Heck, even the Economist said that there should be more aid to states.  But, another round of state aid was never to come to pass.  And as a consequence, public sector job cuts are now a big part of the looming (and possibly already occurring) double-dip recession:

This is what austerity feels like. In another setback for the economy, the unemployment rate in June rose to 9.2 percent, its highest level since December 2010, the Labor Department reported. A measly 18,000 jobs were added in June, carried by an increase of 57,000 jobs in the private sector but dulled by losses of 39,000 jobs in the public sector. As government stimulus winds down and states move to close massive budget gaps, public sector cuts should continue to grow, labor market experts say.

*** **** ***

While the overall picture painted in the report is gloomy, the bigger story may lie in cuts on the government front. In June, local governments reported job losses of 18,000, and the federal government shed 14,000 jobs. Nearly 100,000 local government employees have lost their jobs so far this year, and 464,000 have found themselves jobless since local government employment peaked in September 2008. Meanwhile, private sector employers, who cut jobs at a more rapid pace earlier in the recovery, have slowly added jobs. Since March 2010, when private sector employment rose for the first time in more than two years, private employers have added about two million employees to their payrolls.(US News)

And since the Tea Party held the nation hostage, only to mostly vote against the debt ceiling legislation that was essentially a Democratic cave, cuts will trickle down.  Across the intertubes, reports speculating about how each state will fare in the cuts are appearing.  Here in California, Dan Walters took a look at the impact of federal spending on the state budget, as did the TV folks at KCRA.

According to state Department of Finance records, federal funding accounts for about $76.7 billion, or nearly 38 percent, of total state spending in California.  California Senate President Pro Tem Darrell Steinberg said before the debt deal was announced Sunday night he was concerned about cuts to entitlement programs, especially if they reduce payments to the states for Medicaid, which provide health care for the poor and disabled. The state’s version is known as Medi-Cal and covers 7.5 million people.

*** **** ***

“I think it was a tragic decision to completely balance it on the back of discretionary programs,” Rick Mockler, executive director of the California Head Start Association, told KCRA 3. “There was a big conversation for weeks about taking a balanced approach, meaning that there would be some cuts, but there would also be some new revenue. To us, that made a lot more sense.” (KCRA)

Of course revenue would have made a lot more sense, but when you are negotiating with a zombie death cult, logic isn’t even part of the discussion.  Good public policy goes out the window for the sake of one policy goal, and one goal only: the lowering of taxes.  The Zombies from Planet No hardly concern themselves with the issue of actually stimulating the economy, instead relentlessly hewing to an ideology that would even scare Reagan.

And yet with the deal we made this week, we can all be assured that more cuts will be heading to Sacramento on a budget that is already had more chunks taken out of it than a member of the Donner Party.  It is an austerity that simply shouldn’t be permitted in a nation that is still, by far, the wealthiest in the world.

by Brian Leubitz

You may have noticed that I’ve been pretty quiet around here.  I apologize for that, but I’ve had the opportunity to be in Spain as the nation emerges into its own, fighting the impending austerity coming from the “Socialist” government.  The irony is really thick, as the outgoing Socialist Prime Minister, Jose L.R. Zapatero, has said that if he were younger, he would be out protesting as well.

But these aren’t just protests.  When I was in Barcelona, over hundred thousand protesters came out to call out the nations leaders.  To be honest, they know how to throw a protest.  As I was walking around, the thousands of outraged Spainards made noise, every kind of noise, keys jangling, the beating of pots and pans, and just plain yelling.  With no amplification at all, you could hear the protests for blocks with a deafening roar that no politician could ignore.  It really was a spine tingling moment as I just strolled amongst them.  There were reports of unconfirmed police brutality, but for the most part, the Barcelona government helped the protest proceed.

And today I am in Madrid, where a tent city has grown up in Puerta del Sol.  It is a community in every sense of the word.  It has a kitchen serving up free food, a library, and a legal aid booth.  Madrid gets blisteringly hot in the summer, so how long they can last is in question, but they seem determined to stay as long as it takes them to wedge the government into fighting austerity.

In other words, the people are forcing the hands of the left.  They are demanding action from the nominal leaders of the left, or at least the ones that were elected.  And by action, I mean something besides enabling austerity.

The parallels to both California and the nation are easy to spot.  In California, it was a Democratic victory in 2010 that enabled massive cuts.  And we’ve been seeing small scale rallies demanding that our leaders stand up to austerity, but with over $14 bn. in cuts, that horse has left the barn, and Democratic leaders can only halfheartedly chase after them.  Just today, the Bay Citizen has a great report on another of the painful cuts, adult education.  It isn’t that the community college and school districts want to cut these services, but ultimately, they have to prioritize.  And yet, Democratic leaders can only shout after the horse.

On the other hand,  Spanish anger is actually spilling out on the streets.  The people are mad, the youth are in a desperate situation as unemployment is staggeringly high, and they are letting the world know.  But in California, our displays are limited to symbolic , hour long protests at the Capitol.  When do we occupy the Capitol lawn? When doe the streets ofSF or LA look like those of Barcelona or Madrid?  It will take a serious committed movement to pressure both the nominal left in the state, but also to make the Right fear for their own hardline positions.  The media acts as if austerity is simply a given.  It is not, nor should it be.

But we have to let them know.