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  May 24, 2017

Trump Budget: Foundation for Great American Misery

Every time we move money out of education or building a green economy and move it into the military we are losing jobs for every dollar we spend, says Prof. Robert Pollin of the Political Economy Research Institute
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Robert Pollin is Distinguished Professor of Economics and Co-Director of the Political Economy Research Institute (PERI) at the University of Massachusetts-Amherst. He is also the founder and President of PEAR (Pollin Energy and Retrofits), an Amherst, MA-based green energy company operating throughout the United States. His books include The Living Wage: Building a Fair Economy (co-authored 1998); Contours of Descent: U.S. Economic Fractures and the Landscape of Global Austerity (2003); An Employment-Targeted Economic Program for South Africa (co-authored 2007); A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the United States (co-authored 2008), Back to Full Employment (2012), Green Growth (2014), Global Green Growth (2015) and Greening the Global Economy (2015).


SHARMINI PERIES: It's the Real News Network. I'm Sharmini Peries, coming to you from Baltimore.

The proposed $4.1 trillion federal budget was unveiled on Tuesday, and titled "A New Foundation for American Greatness." The budget proposal includes the largest tax cut in the history of the United States and a massive increase in military spending, funded by deep cuts to social spending in areas such as Medicaid, welfare, disability benefits, cuts to veterans services, student loans, and child care. This is just to name a few.

On to talk about this with me is Robert Pollin. He is a distinguished professor of economics and a co-director of the Political Economy Research Institute at the University of Massachusetts-Amherst. He's the author of many books, the latest among them is "Greening the Global Economy."

Bob, it's very good to have you with us.

ROBERT POLLIN: Yeah, great to be on. Thank you.

SHARMINI PERIES: Bob, you and I have discussed the various proposals that was coming down the pipe in relation to this budget. But what is alarming you the most about this proposed budget?

ROBERT POLLIN: Well, the basic structure, which you described very, very well. This budget is not going to pass as-is, and not become law. But nevertheless, it does reveal quite starkly the priorities of the Trump government, the Trump administration, and this is after even, as you also mentioned, he'd already put out most of this in a preliminary way.

So he's gotten all the feedback, and he's basically proceeding. So what is he proceeding with? He is proceeding with a total structural transformation, evisceration of the very minimal welfare state that we already have. The cuts in Medicaid are massive. Medicaid funds healthcare for low-income people. They depend on it for their lives. For their children's lives, and he wants to cut it.

And that is the single biggest item, in terms of money reduction, so we could roughly say that the tax cuts for the rich that he wants to institute are being funded by taking healthcare away from low-income people. There's other things that are equally alarming, as we've talked about before with the preliminary version.

The cuts on environmental spending are huge, and he picks on those thing in particular, among other things. He's cutting out research and development on environmental technologies. Oh, that means China will completely dominate the market for solar panels, wind panels and other innovations. There's no logic to it whatsoever. And he is not cutting out research and development spending on military technology but he is cutting it out for technologies that could actually promote climate stabilization. Those are just a couple examples.

SHARMINI PERIES: Many people are stating, including your fellow economist Dean Baker, that the budget is dead on arrival. He argues that even Trump doesn't expect it to pass. So then, what is the purpose in introducing a budget that is not expected to pass?

ROBERT POLLIN: I think if you push 120 percent of what you want, maybe you'll get 70 percent of what you want. So people are gonna get used to the idea. Oh, we really can't afford any kind of subsidy for low-income people for healthcare. We've heard it once, with the preliminary version, we've heard it again. So maybe he's not going to get the full $10 billion a year that he wants. Maybe he'll only get $7 billion a year.

But the idea is getting embedded, ironically, that for the economy to be healthy, that people in the economy have to be sicker.

SHARMINI PERIES: Bob, as you know, President Trump is on a tour of the Middle East, today he is in Italy. But when he was in Saudi Arabia meeting with the Kuwaiti emir. He had this to say:

DONALD TRUMP: It's a great honor to be with the emir of Kuwait. And a special person, a person I've gotten to know very well. And they buy tremendous amounts of our military equipment, and they invest in the United States, and that's what we like to hear. We like to hear about jobs, jobs, jobs. And they are spending a lot of money on the new planes, including the Boeing F-18. Which we like very much, which I like very much also. And we appreciate all of the investment that you make in the United States and all the jobs you create. Thank you. Thank you.

SHARMINI PERIES: So Bob, what do you make of this, is this the best way to create jobs in our economy, through the military spending and manufacturing of arms, and selling it to places like Kuwait?

ROBERT POLLIN: If you're actually interested in job creation it is not a rational plan. Building arms, weapons, the weapon industry does create jobs. Spending money in anything creates jobs. The fact is, spending money on the military creates fewer jobs than spending on education, health, welfare, infrastructure. So for example, spending on the military will create about 11 jobs per $1 million of expenditure.

Spending on education will create about 23 jobs. About twice as much. Spending on the green economy will create about 17 jobs per $1 million dollars.

So every time we move money out of education, and move it out of building a green economy, and into the military, we are actually losing jobs for every dollar we spend.

SHARMINI PERIES: Bob, as you mentioned, among the cuts is a 31 percent cut to Environmental Protection Agency, the EPA. What effects will this have on the environment and of course on research of academics like yourself? I know the Perry Institute does quite a bit when it comes to the talks, like 100 and other related and even positive things, like greening the global economy. So what effect will it have on your research as a researcher and scientist in this area, crunching the numbers?

And of course what effect will it have on the environment itself?

ROBERT POLLIN: Trivially, in the grand scheme of things. It's simply gonna make it much harder for people like those of us at Perry that do research on environmental questions to continue to try to do serious work if we eviscerate the data sources on which we all rely.

As it is, the Environmental Protection Agency, the Department of Energy, provides just really foundational research, through which we get some grasp on the truth. And we know that climate change is this overwhelming problem and we need to come up with some decent solutions. We need to have a foundation of research that is based in truth and what's going on out there in the world. And most of the data that we use comes from the US government. And if they're going to cut the budgets for that, I know friends that are trying to make up for the cuts that are coming, with respect to the data tracking that the government provides, the Environmental Protection Agency, on toxic waste for example.

But we can never match 1/100th of what the government is providing, so that is gonna make it more difficult. More broadly, it's very clear that we have a Trump administration that is absolutely aggressively pushing against any kind of green economy agenda. Any kind of agenda that is going to take seriously climate stabilization. And this can only be considered disastrous, if we believe climate science is reasonably accurate.

SHARMINI PERIES: All right Bob. As always, I thank you so much for joining us today and sharing your thoughts on this budget and look forward to having you back.

ROBERT POLLIN: Okay. Great. Thanks for having me on, Sharmini.

SHARMINI PERIES: And thank you for joining us here on the Real News Network.


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