The CPC Budget Part 1 – The Jobs Provisions

Well let’s get right into it. I’d like to start off by examining the first two portions of the Better Off Budget, respectively detailing jobs and the recent budget cuts. I’m linking the actual budget document below which is provided straight from the Congressional Progressive Caucus’ website. It details each of the major policies put forward by the budget and provides the actuarial details that went into the budget, long run projections, and the portions seeing a functional increase in appropriations.

Summary (Short-Form): http://cpc.grijalva.house.gov/uploads/Better%20Off%20Budget%202%20Pager.pdf

Full Document: http://cpc.grijalva.house.gov/uploads/The%20Better%20Off%20Budget.pdf

Before we get started, I’d like to note that the comprehensive nature of this budget means that it is as much of a policy manifesto as it is a financial statement. That’s the reason I’m going to go through it section by section and the reason this series will take as long as it will.

The Jobs Provisions

Note that there is a $10.10 minimum wage provision in the budget however this specific policy will be reserved for a different article since it needs one all to itself. Recent efforts to create a $10.10 minimum wage in Connecticut prove that the issue is alive and well and the longer the wage goes without rising, the more likely it is that there will be a pertinent article on this blog in the future. 

Now, one of the first things readers will notice is a massive increase in attention to job training programs. Absent any other efforts, I’m fully supportive of increases in employer training programs if only because studies have shown that workers who remain unemployed for long periods of time do indeed see deterioration in their performance, morale, skill set, etc. However, the criticism is that it would be far more efficient just to give these workers jobs and train them as they go. If these workers just go through the training programs with no jobs at the end to show for it, then ultimately all you’ve done is slow down the inevitable decline in their work skills because nothing was done to address the underlying problem of low demand. The workers you train might possess comparative advantages in finding marginal jobs in the short run, but then all you’ve really done is swap these workers in the jobs pool with less skilled workers ultimately leaving the job availability situation the same. 

The next subsection they discuss is infrastructure with what they term an $820 billion down payment in infrastructure spending. They aren’t very clear in the descriptor paragraphs so if one were to scroll down to page 14 on the full document, you’d notice that the functional increases in spending chart documents Fiscal Years 2015-2024 so I’m assuming all spending notations in the budget are in ten year increments. That means their spending increase in infrastructure isn’t nearly enough. The American Society of Civil Engineers noted the necessity of $3.6 Trillion just by 2020. In pure nominal spending terms, $820 billion doesn’t come close to spending what is needed to bring our infrastructure to passable grades. Again however, compared to what we are getting now, it’s still preferable.

This next part is probably one of the better ones. The budget provides for $95 billion in grants to states. During the recession, the federal government ramped up stimulus spending but most states had no choice but to either curb their spending or slash it due to the number of balanced budget requirements on their books. So the states actually counteracted the effects of federal stimulus to a degree by reducing spending and laying off workers. The Recovery Act included grants to states but those have largely been phased out now. The return to this type of aid in the Better Off Budget is a policy we’ll need almost in perpetuity until the following happen (individually or a combination): we return towards something resembling full employment, we stop putting so much pressure on states to meet certain requirements or fund programs like medicaid that should honestly be managed at the federal level since they are funded at that level. I can’t however say anything right now about how adequate $95 billion in aid will be towards easing pressure on the states. 

Finally, this last section is my preferred method of dealing with the jobs situation. It takes a direct hiring approach whereby the government simply hires workers for various purposes: teaching, public works, filling government positions that had been emptied out from cuts, etc. This was the New Deal’s original strategy and would go a long way towards permanently resolving our abysmal labor force participation rate than would simply training workers to look for jobs that aren’t out there. Now, obviously the budget doesn’t allocate anywhere near the amount necessary for full employment (and its questionable whether that much should be allocated) but it bases its numbers off of Representative Jan Schakowsky’s (D) Emergency Jobs to Restore the American Dream Act, a piece of legislation I’ll save analysis on for a future post. 

For now at least, I’m ending my analysis of the jobs section by saying this. The stuff in here is good but like most legislation it doesn’t go far enough to achieving the kind of meaningful effect its drafters hope it will. What makes this budget significant however is that it goes further than any of the recent budgets, Congresses, or Presidents have been willing to go and that makes it worth voting for over anything else out there. I have the distinct suspicion that this theme will pervade the rest of the budgetary sections. We’ll have to see if I’m wrong. 

Chirag 

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