Labor Day is a time to honor the hard work of working Americans and to celebrate the great advances driven by our unions. And it’s a good time — especially this year — to ask ourselves how to restore an economy that works for working Americans.
Since the 1970s, our economy has become a massive engine that turns the hard work of millions into vast wealth for the few. Americans have become steadily more productive over time, creating more wealth. Yet the average family today is working more hours, with higher expenses, for virtually the same income as 30 years ago.
That’s technically economic growth, but it’s not success. Our economic success shouldn’t be measured by corporate profits or income growth of the top few percent. We succeed when most Americans have the chance to get ahead, and their hard work results in higher incomes.
The good news is that we have a chance to rethink our economic policies in the coming months. At the end of December, the Bush tax cuts and some Obama tax cuts expire, huge cuts to defense and non-defense spending kick in, and extended unemployment benefits run out.
The coming debate about this “fiscal cliff” isn’t just about spending levels or tax rates. It’s about what kind of economy we want. I think we need three priorities as we face our fiscal cliff choices.
First, don’t choke off our sputtering recovery. We’ve seen in Europe the danger of driving the economy back into recession by slashing spending too quickly. The sooner Americans are back to work, the better our long-term economic prospects and the lower our long-term deficits.
Second, make smart investments in the building blocks of America’s future. We need to upgrade our infrastructure. We need to up our game on education and do a better job training our workforce for today’s (and tomorrow’s) jobs. Cutting these investments damages our ability to compete.
Third, ensure that we have a sustainable federal budget for the long-haul. The goal is not just lower deficits, but a vibrant economy that keeps the budget sustainable. That won’t happen by shifting more of our national tax burden onto the middle class. We should overhaul our tax code to drive the kinds of smart investments we want, to create incentives for businesses to create good-paying jobs here in America, and to reward the hard work of middle class families.
Doing nothing and going over the fiscal cliff clearly fails on these priorities. That choice means higher taxes for everyone, cuts in discretionary spending, a probable dip back into recession, and a degraded Medicare system.
The Romney-Ryan budget similarly fails, weakening our economy in both the short- and long-term and piling new burdens onto working families.
As we look to the next few months, the stakes couldn’t be higher. This is a chance to re-examine what we do as a government, why we do it, and who we do it for. America can’t stay on top if our middle class continues to decline. It’s the economic success of America’s workers that defines America’s success. Let’s rebuild an economy that works for working Americans.
(Editor’s Note: Jeff Merkley, a Democrat from Portland, Oregon, is serving in his first term in the U.S. Senate.)