Organized labor has been fairly quiet on the fiscal cliff so far. But as we're coming closer to the Dec. 31 deadline — and to the end of election season — they're starting to stake out their position in the debate.
Richard Trumka, president of the AFL-CIO, has a Politico op-ed denouncing any attempts to use the fiscal cliff to work out a "grand bargain" deal that would reduce the structural deficit through a combination of revenue increases and entitlement reforms. Instead, Trumka praises the argument that Sen. Chuck Schumer has made that tax hikes on the wealthiest should be used for deficit reduction. Trumka writes:
The pundits will tell you that Democrats have no choice but to accept Social Security and Medicare benefit cuts — because this is the only way Republicans will agree to more tax revenue. This is the grand bargain. We could not disagree more...
The grand bargain crowd says we have to cut benefits to lower the deficit. But if they were serious about reducing the deficit, they would not propose to lower the top tax rate for the richest Americans, which wastes trillions of dollars....Cutting tax rates for the rich won’t help with the supposed goal of reducing the deficit, and it will exacerbate economic inequality — the last thing we need.
But for all of Trumka's differences with the grand bargainers, he also suggests there is a fundamental point of consensus: We need to use the fiscal cliff as an opportunity to reduce the deficit, whether through tax hikes on the wealthiest Americans (as Trumka and the Democratic leadership want) or a combination of revenue hikes and entitlement reforms (as the grand bargainers want).
In fact, the fiscal cliff itself reduces the deficit; it just does it in a sharp, sudden way that no one wants. The alternatives being proposed would stretch that deficit reduction over a longer time period, averting the sharp contraction next year. But neither the pro- or anti-grand bargainers are talking much yet about countering the fiscal cliff's undesirable austerity measures with a fiscal stimulus.