Union Leaders Hit Obama Budget Blueprint

WASHINGTON—Union leaders found little to like in Democratic President Barack Obama’s $3.78 trillion federal budget and spending blueprint for the fiscal year starting Oct. 1.

Their big criticism was of his proposal, offered as a so-called “olive branch” to congressional Republicans, to reduce future Social Security cost-of-living increases by tying them to the so-called “chained CPI.” That’s a measure of inflation that is smaller than the normal Consumer Price Index used to calculate the yearly hikes.

“Cutting Social Security benefits and shifting costs to Medicare beneficiaries -– while exempting corporate America from shared sacrifice –- is wrong and indefensible,” AFL-CIO President Richard Trumka said.

The chained CPI scheme also drew negative reviews from congressional Democrats and other defenders of Social Security. Meanwhile, the GOP demanded even more cuts in Social Security, Medicare and Medicaid, while rejecting Obama’s proposals to close tax loopholes that the rich and corporations use.

Obama’s budget, formally unveiled April 10, is more useful as an outline of administration priorities than it is as a spending plan, as both the Democratic-run Senate and the GOP-run House already approved their own separate budget blueprints – which are also purely political documents.

That didn’t stop Trumka, Steelworkers retirees leader Jim Centner, AFGE President J. David Cox and Letter Carriers President Fredric Rolando from lacing into Obama’s spending blueprint. All four criticized the chained CPI. Cox also blasted Obama’s proposed $35 billion in cuts aimed at federal workers’ pensions as “unnecessary and cruel.” Rolando said Obama still wants to cut Saturday service.

Trumka said the Social Security cuts would cost current and future retirees $130 billion over the next decade “and much more in future years.” He also criticized the $64 billion in cost-shifting to Medicare beneficiaries. And Obama should use corporate income tax reform to force firms to pay their fair share of funding the government, and not be “revenue-neutral,” he added. Revenue neutrality is yet another GOP demand.

“Putting aside the injustice of demanding sacrifice from the innocent while letting the guilty off scot free, the Obama budget falls short of putting our economy on a path towards higher wages and full employment,” Trumka criticized.

“As we have said many times, the greatest economic challenge facing America is the jobs crisis, not the deficit. Yet the administration cuts the part of the budget that

pays for investments in worker training and jobs, already cut to its lowest level since the Eisenhower administration, by another $100 billion. This is bad economic policy when the economy remains weak and we urgently need more job-creating investments.”

Trumka praised a few Obama proposals, including taxing overseas profits of U.S. corporations, as well as universal access to pre-kindergarten, which the Teachers have pushed for years. Obama would fund that by doubling the federal tobacco tax. And Trumka lauded Obama’s proposals to strengthen Labor Department programs against “wage theft, unsafe workplaces and employer retaliation.”

The budget maddened Cox. “The poets remind us that it is easier to forgive an enemy than a friend. But it is hard to forgive our friend President Obama when his administration continues to act more and more like our enemies,” Cox said.

Obama’s moves include a 3-year pay freeze, a shift of retirement system costs for new workers that will cut their pay “by 2.3% forever,” and his agreement to the sequester, Cox said. That’s cut federal workers’ pay through “lengthy furloughs on federal workers while leaving the larger, costlier contractor workforce untouched.

“And now, in a final act of betrayal, the White House proposes $35 billion MORE (his emphasis) in retirement system cuts, accelerating the race to the bottom for federal workers and their families,” Cox said. “We cannot understand how an administration that claims to stand up for working and middle-class Americans can simultaneously push policies that have would impose such enormous pain on its own workforce.” Trumka agreed with Cox’s criticism of the budget’s proposals targeting federal workers.

Rolando said that “slashing Letter Carrier jobs and weakening the Postal Service by eliminating Saturday delivery while reducing the quality of service for our customers, instead of ending the retiree health pre-funding mandate altogether, is plain wrong —especially at a time of high unemployment.”

Centner called Obama’s budget “disappointing” because of the cost-of-living cuts through the chained CPI. That and the Medicare cuts “place the burden of our nation’s debt unfairly on the back of seniors,” he said. “Social Security has not contributed a single penny to the federal deficit. The program is funded by workers’ and employers’ contributions and should be excluded from any budget discussion,” Centner declared.

Obama touted a total of $1.8 billion for worker job safety, wage and hour and other enforcement programs. His proposal – in spending authority, not actual money – also includes a proposed $8 million cut in Mine Safety and Health Administration state grants. Overall, MSHA would get $381 million, with more targeted to enforcement. OSHA would get $571 million from Obama’s budget.