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State employees could be caught in austerity bomb’s blast radius

Public employees could see their livelihoods threatened if the fiscal cliff standoff is resolved through sharp spending cuts.
/ Source: ED Show

Public employees could see their livelihoods threatened if the fiscal cliff standoff is resolved through sharp spending cuts.

Public worker unions with members whose livelihoods are threatened by the fiscal cliff negotiations converged on Washington, D.C., Wednesday to lobby their congressional state delegations.

“In Colorado, we could see 400 fewer jobs in Head Start preschools,” said Kerri Dallman, a social studies teacher currently serving as president of the Colorado Educational Association. “That means fewer 4-year-olds would have a place to attend preschool.”

Nationally, “we’re looking at probably losing 80,000 jobs on top of the 300,000 we’ve already lost” since 2009, Dallman said. That latter figure comes from the White House’s own economic advisers.

The unions, including the National Education Association (NEA), American Federation of State, County, and Municipal Employees (AFSCME), and Service Employees International Union (SEIU), favor raising taxes on the richest Americans instead of  budget cuts that disproportionately affect the middle class.

NEA member Chris Guinther, a special education teacher currently on leave from her job in Missouri, said that teachers had already borne most of the burden of top-down, state-level austerity.

“We have many school districts where our educators have gone for years without raises,” Guinther said. “And with the cost of health insurance rising, they’ve really taken a decrease in pay.”

Ethan Pollack, a senior policy analyst at the Economic Policy Institute, said it’s “tough to say” how fiscal cliff negotiations could affect state employees. “You’re talking about two slightly different areas of the budget,” he told MSNBC.

“Usually, operations is funded internally by the state, and a lot of the stuff that the federal government provides is more for specific activities,” Pollack said.

This means, for example, that budget cuts resulting from the fiscal cliff negotiations could have an impact on a state’s bridge-building project, but not on whether the state would be hiring new bus drivers to transport people along that highway.

On the other hand, said Pollack, budget cuts to specific federally-funded projects would likely have an indirect impact on other parts of state budgets. “Money is fungible, and the more you try to crimp state budgets, the more [state governments] try to go for the low-hanging fruit, politically.”

“Unfortunately, that tends to be public employees,” said Pollack.

The threat of state-level staffing cuts is one reason why economist Paul Krugman and others have suggested that the fiscal cliff might be more accurately labeled an “austerity bomb.” The danger of the so-called cliff, argues Krugman, has nothing to do with the national debt: the real threat is that spending cuts, whether they’re automatic or not, would amount to a de facto austerity regime.

Or rather, the so-called bomb could deepen an austerity regime which already exists in the United States.

Since the recession, states across the country have been forced to slash spending in response to massive budget shortfalls. The Center on Budget and Policy Priorities has attributed these shortfalls in part to insufficient federal aid and projected that in 2013 states will face an overall $55 billion budget gap. Cutting federal spending on state-level projects could potentially add to that gap, prompting state governments to offload more of the financial burden on the backs of their employees.

Guinther and Dallman said they worry an austerity bomb could have an even more adverse impact on their students.

“We only have a first grade student for one year,” said Guinther. “If we cut back on the support for that student for one year, we never get the opportunity to make it up again.