Report | Budget, Taxes, and Public Investment

Cutting spending and burning the middle class

Briefing Paper #303

Download PDF

Press release

Competing proposals from Congress jeopardize the recovery and our future

Although the U.S. economy clearly needs more fiscal support to address an unrelenting jobs crisis, Congress is prematurely pivoting from creating jobs to cutting spending. Less than four months after passing an $858 billion tax deal, the government is on the verge of shutting down because Congress can’t agree on nondefense discretionary spending for the remaining half of this fiscal year. Congress seems to be saying that deficits don’t matter when it comes to tax cuts, but deficits trump all when it comes to nondefense spending. Th is non sequitur poses grave risks to both economic recovery and the besieged middle class, and it is embodied in five budget proposals— all of which would place the entire burden of deficit reduction on spending cuts, leaving the revenue side of the equation missing. The House-passed budget alone would cut an additional $51.5 billion from nondefense discretionary spending over the next six months. And this budget proposal, which would turn the dial on unemployment in the wrong direction, is competing with proposals that would do even greater harm to the economy.

These attempts to make good on arbitrary campaign pledges to cut spending now threaten to harm disadvantaged Americans, fuel already rising poverty, impede economic recovery, and cost hundreds of thousands of Americans their jobs—all without addressing the root causes of the deficit. While economic hardship still abounds, many of the government programs that have eased joblessness, poverty, and hunger are now under assault by policymakers seeking to radically and rapidly cut near-term spending.

This briefing paper examines the House-passed budget and four other proposals to cut government spending while leaving spending through the tax code untouched. All of the measures would hurt job creation, and the worst of them would all but guarantee a double-dip recession.

See related work on Budget, Taxes, and Public Investment

See more work by Andrew Fieldhouse