Brace yourself for more austerity
by digby
The fallout from the Great Debt Ceiling Grand Bargain negotiations is upon us:
Top White House officials are warning liberal and labor leaders to brace themselves for President Obama’s budget proposal.
Gene Sperling, director of the National Economic Council, sought in meetings last week to lift the left’s gloom about Washington’s crackdown on spending by promising that the president this year will focus on job creation rather than deficit cutting.
Obama staffers sought to present their budget plan as a glass half full. According to sources familiar with the briefings, they promised that the president will focus on jobs and the economy, instead of deficit-cutting, which dominated last year’s debate on Capitol Hill.
Obama has signaled in recent weeks that he plans to run a populist reelection campaign. He will need to keep liberal activist and labor groups — important parts of the Democratic base — energized for his strategy to work.
In his first three years, Obama had a free hand to suggest spending levels for government programs in his annual budget blueprint. But that is not the case this year because the administration is constrained by the budget deal reached in August to raise the debt limit.
He must stick to the $1.047 trillion spending cap he agreed to with GOP leaders, which means he will call for less discretionary spending than he did last year.
Senior administration officials fear a backlash from the left and are trying to prepare their allies to expect a disappointing budget, sources say.
“A senior White House person said we weren’t going to be happy with the budget, but they’re doing the best they can” given the spending caps set by the 2011 Budget Control Act, said one source.
Right. Because that had to happen.
But forget the politics and look at the economics. Or rather look at the UK to see just how idiotic this is:
UK unemployment rose by 118,000 in the three months to November to 2.69 million, official figures show.
The Office for National Statistics (ONS) said the unemployment rate also rose to 8.4% from 8.3%, the highest since January 1996...
The figures support the picture of a flat UK economy, with other data released on Wednesday showing average weekly earnings, including bonuses, grew at just 1.9%.
The Prime Minister, David Cameron, said the figures were not good news: "Any increase in unemployment is disappointing and obviously a tragedy for the person who becomes unemployed - that is why we are taking action to get people back to work".
He pointed to an increase in the number of people in work, to new private sector jobs and a small fall in the long-term unemployed.
But the figures showed the private sector was not compensating for job losses in the public sector, with the private sector creating 5,000 in the period, while 67,000 public sector jobs were lost.
Oy. What Atrios said.
Update: Also too what Atrios said here.
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