House Approps Chairman Asks, ‘Why On Earth Wouldn’t Americans Be So Angry?’

Rep. David Obey has made no secret of his skepticism of President Obama’s direction in Afghanistan. But when it comes to Obama’s economic policies, the chairman of the House Appropriations Committee on Tuesday leaped to the president’s defense.

In fact, the veteran Wisconsin Democrat opened a hearing on the federal budget and broader economic outlook for fiscal year 2011 offering not only full-throated support for Obama’s stimulus and job-creation programs, but dispensing a wider broadside against earlier conservative economic programs that have given Americans “the shaft for most of the last decade.”

Obey, by wielding the gavel of one of the committees that hold the government’s purse-strings is one of the most powerful officials in Washington, notes that the U.S. economy has lost 8.4 million jobs since December 2007. Almost one-tenth of the labor force is unemployed and one-sixth is either unemployed or underemployed.

Congress last year addressed the crisis by approving Obama’s $787 billion economic stimulus plan, known as the American Recovery and Reinvestment Act.

Obey challenged critics who complain that the Recovery Act hasn’t created jobs, but only has added to the nation’s budget soaring budget deficits.

“Some people say that the Recovery Act has not saved a single job. If they cannot see that that assertion is not true it is simply because they don’t want to see,” he says.

Obey acknowledges that the stimulus took several months to take hold after it became law in February 2009. From October, 2009 to January of this year, job losses declined from a high of 753,000 to 35,000, or a 95-percent reduction, he says.

“While none of us will be satisfied until the economy is once again adding jobs, we have come a long way in the last year in turning this picture around,” Obey says. “In each of the last couple of months, full time employment has actually grown by hundreds of thousands. However, the hole is deep and it will take time and constant effort to fill it.”

In terms of the mountain of federal budget deficits the government is expected to run in the decade between 2009 and 2019, the cost of the Recovery Act, including interest, is less than 10 percent of the total deficit.

The bulk is due to “four major cost drivers” that Obama inherited coming into the Oval Office – the cost of two wars, the cost of the 2008 financial bailout, revenue loss due to the economic downturn, and revenue loss due to two tax cuts enacted under Republicans that largely benefited the wealthy, according to Obey. “These circumstances didn’t happen overnight, and they can’t be fixed overnight either,” he says.

Indeed, railing against decades of economic policy in which the wealthy have experienced fabulous benefit, while working Americans have received “getting table scraps,” Obey says that he understands the seething anger in the country.

“You know, every week someone asks me why Americans are so angry. I would ask it another way – why on earth wouldn’t they be angry? They have been given the shaft for most of the last decade,” he says. “The fact is most Americans are suffering from a different kind of deficit, an income deficit.

“From the New Deal until a generation ago, incomes were growing at about the same rate for everyone – from working families to the richest among us. Since the 1970s, however, almost all income gains have gone to the top,” he adds.

Income for the middle fifth of American families rose only 15 percent from 1979 to 2006, and most of that growth came about because women are working much longer hours each year than three decades ago, Obey says. By contrast, those with incomes in the top 10 percent saw their income grow 133 percent.

“Those in the top ten percent now receive half of all income in America,” Obey says. “Those even higher on the income ladder have had mindboggling income gains. In 2007, the average income of the top one-hundredth of 1 percent reached $35 million, up almost 10-fold over the last three decades. Meanwhile the rest of society was getting table scraps. We have seen the largest transfer of income up the income ladder in recorded economic history. Why shouldn’t middle income taxpayers be angry?”

Obey offers, as solutions, two verses from the Democratic hymn book.

“What can we do to restore balance and budget discipline? Enacting healthcare reforms would create an important safety net for working families. Allowing tax cuts for the top 2 percent of income to expire as scheduled would also make sense,” he says.

Obey also touts greater access to education.

“Many studies have shown that family income is a greater determinant of college graduation than the aptitude of the student,” he says. “Among students who scored in the top quarter on 8th grade math tests, the child of a wealthy family graduated from college 74 percent of the time, while the child who came from a poor family graduated only 29 percent of the time even though they demonstrate the same ability. As a matter of justice, we must provide these low and middle income kids the better educational opportunities they need and deserve.”

The publisher of the news site On The Hill, Scott Nance has covered Congress and the federal government for more than a decade.

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