Assault on the Middle Class

House Republican Budget Plan Targets Everyone but the Rich

Michael Linden examines how conservative efforts to confine the pain of budget cuts to everyone but the rich would have lasting consequences on middle-class families.

Cars pass a pothole on Lake Shore Drive in Chicago, Thursday, April 10, 2008. If passed, H.R. 1 would slash funding for all manner of  transportation projects. That means fewer highway miles repaved, fewer  new roads and bridges, and less frequent bus and train service. (AP/Charles Rex Arbogast)
Cars pass a pothole on Lake Shore Drive in Chicago, Thursday, April 10, 2008. If passed, H.R. 1 would slash funding for all manner of transportation projects. That means fewer highway miles repaved, fewer new roads and bridges, and less frequent bus and train service. (AP/Charles Rex Arbogast)

The first decade of the 21st century was tough on the middle class in America. From 2001 through 2007, median household incomes actually fell after accounting for inflation. And as wages stagnated, huge costs such as health care and higher education continued to rise dramatically. And this was even before the onslaught of the Great Recession, which destroyed almost $20 trillion in wealth and nearly 9 million jobs. As a result, from 2007 to 2009, income for the median American household dropped by more than 4 percent, the largest two-year decline in 35 years.

The deep recession also dramatically exacerbated an already hefty federal budget deficit. Now, Republicans in the House of Representatives are trying to solve the latter problem—the federal budget deficit—by making the former one—a middle class still struggling to keep its head above water—even worse.

Their plan is to reduce government spending on a tiny slice of the federal budget, including many programs on which middle-class Americans depend heavily but which the wealthy can easily live without. For most American families, this will mean more financial pain than they can easily bear after the struggles they experienced over the past decade.

The spending bill passed by the House, known as House Resolution 1, or H.R. 1, for fiscal year 2011 ending September 30, would slash funding for a wide range of activities that middle-class families rely on—services such as inspections of food, drugs, and consumer products; road building; mass transit; public elementary and secondary education; workplace safety; and law enforcement. Of course the government provides these services to the advantage of everyone—rich, poor, and middle class alike—but it is only the rich that can afford to buy their own replacement services should the government be forced to stop providing them. The rich will be able to shrug off the new costs but the middle class will feel them quite keenly.

The House Republican budget plan, for example, includes substantial cuts to law enforcement grants to states and localities. This will mean fewer police on the beat, and less training and worse equipment for those cops who are left. Obviously, there are plenty of ways in which effective public law enforcement benefits rich people along with middle-class families. But if those services degrade, families who are extremely wealthy can always purchase private security guards or move to a gated community.

Similarly, the massive cuts to federal support for education—from pre-kindergarten through college—included in H.R. 1 would certainly be felt much more severely by the middle class than by the wealthy. The rich can afford to send their children to private schools, hire private tutors, and provide private enrichment classes and activities. They can also afford to send their children to the priciest private universities without the need for federal financial aid.

But where do those same cuts leave middle-class families? The middle class needs good public schools to educate their children, and Pell Grants to allow their kids the opportunity to access the benefits of higher education. Some families may be able to scrimp or dip into savings to pay for 12 years of private elementary and secondary school but the sacrifices required are enormous. Most others will have to make due with public schools targeted for extensive cuts by House Republicans. And if the Republicans get their way, you can forget about college tuition assistance.

Cuts to education and law enforcement are only one part of the assault on the middle class. If passed, the House plan would also slash funding for all manner of transportation projects. That means fewer highway miles repaved, fewer new roads and bridges, and less frequent bus and train service. That will be merely inconvenient for the very wealthy. They can hire a driver or call a car service so that hours sitting in traffic aren’t wasted for them. Or they could build a home office so they can telecommute, skipping the traffic altogether. The middle class, however, doesn’t have those options.

Conservatives might say that if the government stops building and maintaining good roads, or providing mass transit options, and traffic begins to pile up, then the private sector can always step in. Perhaps some enterprising company will build their own highway and charge a hefty toll for those willing to pay. No burden for the wealthy commuter but now the middle-class commuter has to factor in the cost of the new tolls along with rising price of gasoline.

And speaking of gasoline, Republican budget cuts are likely to make that problem worse as well. Their plan includes big cuts to the Commodity Futures Trading Commission. The CFTC may not be the agency that first pops to mind when thinking of crucial middle-class services. But the CFTC is responsible for regulating and cracking down on speculation that can drive up the price of commodities like oil. The head of the CFTC, Bart Chilton, recently warned that energy speculation is currently at record highs and is pushing up prices at gas pumps. If the House Republicans get their way, the CFTC will have fewer resources at its disposal to find and stop this kind of speculation, which means higher gas prices.

Again, that may not have a particularly large impact on people who haul in millions of dollars a year, but for most Americans, it’ll hurt.

Hurting quite a bit more, and in a more literal way, will be the cuts proposed for the agencies charged with ensuring the safety of America’s food supply, pharmaceuticals, and consumer products. Currently, safe in the knowledge that the Food Safety and Inspection Service, the Food and Drug Administration, and the Consumer Product Safety Commission are on guard, consumers can currently choose between products based on price and quality without fear that if they choose to save a little money by picking up a generic brand they won’t end up sick or hurt. But House Republicans propose major cutbacks to FSIS, the FDA, and the CPSC. These cutbacks will mean fewer inspectors and safeguards, which in turn means more tainted meat or defective toys.

No one benefits when thousands of pounds of rancid meat get shipped to local grocery stores but the implications are less severe for those who can afford to always purchase the highest-priced products.

Of course, the House budget cuts a lot more than just foundational middle-class services. Low-income families seem to be a favorite target, too, as do children. Taken altogether, the sum total of these cuts are so severe that they would mean the loss of hundreds of thousands of jobs over the next two years as well as overall slower economic growth in the long term. But the attack on the basic building blocks of a middle-class life—education, security, ability to get to and a from a job, confidence in the safety of products purchased at the grocery store—is particularly galling given how central a strong middle class is to broad economic growth.

When millions of middle-class families are struggling to get past the worst economic disaster in 70 years—when we just exited a decade in which median household incomes actually fell in real terms—it is baffling how anyone could truly believe these kinds of cuts will help. But this is what happens when an ideological commitment to “smaller government” intersects with an economic worldview in which the rich matter more than anyone else. You end up with a budget that slashes public services that middle-class Americans depend upon but that wealthy people can do without.

The incredibly sad irony of this situation is that the middle class has been bearing the brunt of this skewed conservative economic philosophy for some time now. Their incomes were falling at the same time that huge tax cuts were being bestowed on the richest 1 percent. Their jobs were disappearing at the same time that taxpayer dollars were being used to bail out the largest banks in the country. And now House Republicans cut their services while simultaneously protecting benefits for oil companies, multinational corporations, and trust-fund heirs.

Reducing the budget deficit may be a laudable goal but doing it this way is anything but.

Michael Linden is Director of Tax and Budget Policy at the Center for American Progress. To read more of the Center’s budget analysis and policy recommendations, go to the Federal Budget page of our website.

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.


Michael Linden

Managing Director, Economic Policy

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