07-21-2024  12:07 am   •   PDX and SEA Weather

By William Reed, Business Exchange
Published: 16 November 2010

African Americans play major roles in running America's governments.  But, many among the nation's Black American population, holding "good government jobs," likely will be negatively impacted by the Republicans coming to Congress. In November American voters said that they want the public sector spending spree to end. To save America, the new Congress will have to: cut the budget, reduce spending, and shrink the size of government – of which, federal government employees are a big target.  At least a 10 percent reduction in government spending is necessary as a means of reigning in the out-of-control national debt.  The truth Black voters must admit is that Barack Obama has brought back burdening Big Government.  Brother Barack heads a 2.2 million federal work force, the largest in modern history.

It is important to understand that Republican leaders propose a total of $260 billion in cuts from the current year's $1.1 trillion budget for government operations—excluding the military and entitlement programs like Social Security and Medicare.  While legislation to enforce such cuts would have to pass the Democratic-controlled Senate and be signed into law by Obama, the Republican-controlled House could force a showdown on budget-cutting by the spring, when Congress must approve a rise in the federal debt ceiling, currently set at $14.3 trillion.  Without legislation to raise the debt ceiling, the Treasury would be unable to borrow and the US government would default on its debt obligations, with incalculable consequences for global financial markets.  As candidates many Republicans pledged to oppose any increase in the debt ceiling.

Cost cutting measures by the next Congress is exemplified by Sen.-Elect Rand Paul, seemingly set on reducing federal wages by 10 percent. At the moment, a pay raise of 1.4 percent in 2011 is on the table for federal employees. But, Paul & the Republicans can push that number to zero. A large share of the federal jobs on the Republican-led Congress' chopping block is likely to be middle-class Blacks' jobs. Black Americans are well-represented among the public-sector and are twice as likely as Whites to work for city, state, or federal government. Blacks will suffer if Republicans go after federal employees or their wages. Such cost-cutting actions run the risk of stalling the already very weak economic recovery and accelerating the decline of the contemporary Black middle class.

Rand Paul's views happen to be in line with those of the Federal Debt Commission, that the federal workforce should be cut by 10 percent and salaries frozen across the board.  Paul argues that such drastic measures would be justified because "The average federal employee makes $120,000 a year, while the average private sector employee makes $60,000 a year."  Though the salary figures Paul puts forth are not credible, there appears to be growing sentiment among many Americans that federal government employees are overpaid and overcompensated. Black federal government employees are concentrated in professional, administrative and technical occupations and present "a misleading face of African American upward mobility." The federal government outsources most lower-skilled jobs, such as janitors and other positions that require less than a high school education.

Wider than race and partisan politics, the situation has reached the point where the debt ceiling must be raised and cuts in spending must be implemented. Without Congressional approval for additional debt, the U.S government cannot pay its bills – most notably, interest payments on treasury bonds, bills and notes. If America defaults on those payments, or even misses them by just one day, the domino effect would be brutal.

This time the Republicans will not to raise the debt ceiling. This will eventually involve elimination of government programs and agencies and reductions in the federal work-force. The easiest and most effective way Republicans will use to roll back spending and force reductions is to block the raising of the debt ceiling. Over the past decade, the debt ceiling has been raised routinely as a means of funding increases in deficit spending. Each time the debt ceiling is raised, the government borrows more money to cover its obligations.


William Reed is available for speaking/seminar projects via BaileyGroup.org.


Recently Published by The Skanner News

  • Default
  • Title
  • Date
  • Random