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Defending the Safety Net

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On April 8, the PSC and its coalition partners held a forum on “The Safety Net, Sequestration & Austerity Politics.” The timing was good, even if the latest news was not: the event came the week after President Barack Obama released a budget proposal that calls for cuts in Social Security benefits, by changing the way that cost-of-living adjustments are calculated.

Co-sponsoring the event was a broad coalition that expressed its determination to fight against such cuts and to mount a robust defense of the social safety net. In addition to the PSC, sponsoring organizations included Caring Across Generations; the “No Bad Grand Bargain” Network; COMRO, the Committee of Municipal Retiree Organizations; the New York City Alliance for Retired Americans; the New York City Managerial Employees Association; and US Labor Against the War.

Speakers at the forum included Dean Baker of the Center for Economic Policy and Research; James Parrott of the Fiscal Policy Institute; Frances Fox Piven of the CUNY Graduate Center; and Michael Zweig of SUNY Stony Brook and US Labor Against the War. Excerpts adapted from Parrott’s and Zweig’s presentations follow below; a longer version of this article, including remarks by Baker and Piven and links to their past articles for Clarion, will be posted soon.

The PSC’s Safety Net Working Group has led the union’s work in defense of Social Security and other safety net programs. For information on how you can get involved, or for a copy of their booklet, “Defending the Social Safety Net,” go to psc-cuny.org/social-safety-net.


James Parrott
Deputy Director and Chief Economist
Fiscal Policy Institute

James Parrott of the Fiscal Policy Institute speaks at the PSC’s April 11 forum on the future of the social safety net.
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Wall Street is now making profits at the rate of around $24 billion a year, which is better than in most of the years during the housing bubble when it was expanding. Bonus levels on Wall Street, as estimated by the State Comptroller’s office, are running at about $20 billion a year now – not as high as they were in 2005 through 2007, but still pretty high. Keep in mind that these are cash bonuses. We don’t know about stock options that they received but haven’t exercised yet.

So I would say that Wall Street has fully recovered from the downturn. But that hasn’t quite trickled down to the rest of New York.

Food stamp rolls in New York City have increased by 63% since the beginning of the recession at the end of 2007. That’s an additional 710,000 New Yorkers.

The sharp drop in employer-provided health insurance has pushed more people onto Medicaid, to the point where 38% of New York City residents now rely on the program. And we are at record levels of homelessness, with 50,000 New York City residents now homeless. That includes 20,000 children, with about that many staying each night in municipal shelters.

So with poverty in New York on the rise, a minimum wage increase was passed. That’s a good thing, it’s badly needed – but the way it was done, it’s not quite as great as it sounds. The politics of it are something to behold.

[To get it through the Legislature,] we ended up with something called a “minimum wage reimbursement credit,” which gives you a tax credit if you keep wages right at the minimum for hiring student teenagers. So it’s an incentive to replace adult workers with student teenagers, and to not give anybody a raise.

Initially, it was argued that this was something that the state needed to do to help small businesses that would supposedly have a hard time adjusting to an increase in minimum wage – even though there’s no evidence that raising the minimum wage has harmed small businesses. But this credit is not limited as to business size. The Fiscal Policy Institute recently estimated that Walmart could receive up to $85 million over the next five years courtesy of taxpayers in New York as a result of this minimum wage tax credit. A worse idea, I can hardly imagine.


Michael Zweig
Professor of Economics, SUNY Stony Brook
Co-convener, US Labor Against the War

Michael Zweig of SUNY Stony Brook is critical of heavy military spending
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I want to start by addressing this claim that there is no money. We have heard this over and over again in the budget debates, that there’s just no money. Well, it’s just a lie. There is lots of money – and what we have to do is identify where that money is, go after it and move it into productive human needs.

One major source of where there is money is with rich people, with corporations, with the financial institutions, and there are many tax proposals we can discuss that address the revenue side of the budget.

But I want to focus tonight on the expenditure side of the budget and, in particular, to look at the military budget. In the federal budget, the military takes up about 57% of discretionary spending – more than half.

I direct your attention to the National Priorities Project website, costofwar.com/tradeoffs. Just for the fiscal year 2012, just for the one year, taxpayers in New York State paid $10.3 billion to fund the wars in Iraq and Afghanistan. Not the rest of the military budget, just Iraq and Afghanistan. That’s more than the entire deficit for the State of New York in that year. We could have gotten rid of the entire deficit problem in the State of New York by redirecting that money.

So it’s very clear: we cannot get labor’s agenda done in this country unless we end the wars in Iraq and Afghanistan, unless we end the militarized foreign policy of the United States and totally redirect the way we operate in the world.