National Commentary

Moran’s News Commentary: Debt Ceiling Deal Is a Drag on Job Creation

Last week’s employment figures showed a modest increase, yet our national unemployment rate still hovers above nine percent. One of the main problems is that while private sector employment continues to grow, the public sector has shed half a million jobs in the past three years – 37,000 in July alone – which continues to be a drag on the economy. Unfortunately the debt ceiling deal negotiated last week will only accelerate this decline, resulting in the loss of hundreds of thousands more Federal, state and local jobs and jobs in the private sector from government contractors.

One immediate source of job creation that will likely end up on the chopping block is the need to invest in our nation’s crumbling infrastructure. $2.2 trillion needs to be invested in the most critical physical infrastructure projects over the next five years.

According to the American Society of Civil Engineers:

• America’s drinking water systems face an annual shortfall of $11 billion. Leaking pipes lose seven billion gallons of drinking water a day.

• There are 188 hazardous waste sites awaiting cleanup and redevelopment.

• More than one out of four of our bridges are structurally deficient, including several here in Northern Virginia.

• Railroads and airports are underfunded.

• There are 4,000 deficient dams and nearly 2,000 high hazard dams that must be repaired.

• We are $116 billion short of the investments needed to mitigate the most serious road congestion.

According to the American Alliance for Manufacturing, every billion dollars of infrastructure investment creates 18,000 jobs here in America and provides the foundation and impetus for sustainable long term growth. Meeting our nation’s critical infrastructure needs would generate millions of new jobs.

But few if any of these projects are now likely to receive Federal help as we continue to cut, cap and disinvest. The deal struck over the debt ceiling foreshadows the dramatic cuts that the Republican majority will demand as part of the 12 member super committee.

Cuts to discretionary programs will most likely be used to reach the $1.5 trillion in deficit reductions required under the debt ceiling agreement. But these represent the real seed corn of our future and the resources to enhance and stimulate private sector job creation.

The closest analogous period in American history to today is 1937 when FDR prematurely retrenched on the very job and construction initiatives that rescued us from the Great Depression.

The result was to push us right back into a sustained depression until the armaments buildup of the early 1940s turned the economy around. History shows that we have never cut our country out of a recession. These cuts will hit right at the heart of federal investments in human and physical infrastructure that were so critical to our past successes and that are needed today to lift up our nation’s economy.

While additional stimulus is next to impossible to pass in the current political atmosphere, it is exactly what the economy needs to recover quickly from the current stagnation.

 


Rep. James Moran (D) is Virginia’s 8th Congressional District Representative in the U.S. House of Representatives.