The house is still on fire when we have a 9.2% unemployment rate. A great deal of the jobs that we lost will probably never come back and there is nothing being done to create new jobs. There are no big public works projects; no revolutionary 21st century WPA. As a matter fact, there are actually half a million fewer government employees now than there were when Obama took office. A crumbling infrastructure and the need to invest in green jobs, present the perfect opportunity to add millions of those much needed jobs, and yet, Congress and the White House are again having the wrong conversation at the wrong time and we are now in the rear view mirror of Germany on the green-driven economy highway.

The house is still on fire when credit is hard to come by for credit-worthy small businesses. In 2009, bank loans to small businesses were down about $30 billion, or down 4 percent from the previous year according to the Federal Deposit Insurance Corporation. Loans guaranteed by the federal Small Business Administration fell in June 2010, dropping 66 percent to their lowest level in at least two years, according to agency data. The value of those loans -- $647 million -- is less than the total in February 2009, the month before the Obama administration's stimulus plan eliminated some fees on the taxpayer-backed loans and increased the federal guarantee on some of them to 90 percent (that incentive has since expired). Small businesses are an essential producer of jobs ---they account for about 60 percent of gross job creation and employ about a half of all American workers.

The house is still on fire when an increasing number of home mortgages are underwater. The number of Americans who owe more on their mortgages than their homes are worth rose at the end of last year, preventing many people from selling their homes in an already weak housing market ---that adds up to 11.1 million households or 23.1 percent. We now have approximately 2.4 million people, who have 5% equity or less in their homes and a housing market that has a total amount of $751 billion in negative equity nationwide.

The house is still on fire when we have on-going military conflicts that carry hefty price tags. A new study by Brown University shows the cost of the wars in Afghanistan and Iraq will cost $4 trillion dollars. The group of economists, anthropologists, lawyers, humanitarian personnel, and political scientists involved in the project estimated that the cost of caring for the veterans injured in the wars will reach $1 trillion in 30 or 40 years. In estimating the $4 trillion total, they did not take into account the $5.3 billion in reconstruction spending the government has promised Afghanistan, state and local contributions to veteran care, interest payments on war debt, or the costs of Medicare for veterans when they reach 65 (so that $4 trillion figure may grow significantly). Consider this… in 2003, the Bush administration had projected that the war in Iraq would cost, in total, between 50-60 billion dollars.

FDR had a water bill moment, if you will, in 1937 and the country paid the price. Out of fear of inflation (the water bill), Roosevelt made significant spending cuts in June of 1937. As a result, the economic recovery from the Great Depression (the burning house) temporarily stalled, lasting about 13 months. The unemployment rate jumped from 14.3% to 19.0%, the first increase since FDR took office, and manufacturing output fell by 37% to 1934 levels. He had, in effect, lost a great deal of the ground made from his bold and progressive New Deal programs. To Roosevelt’s credit, he reversed course in 1938 and went back to deficit spending, the unemployment rate began to fall, and kept falling until there was significantly low unemployment by 1945.

Given where we stand today and the clear lessons in history, why are we talking about the deficit as if it is the current public enemy number one and not unemployment?  This carries my water bill and burning house analogy one step further. It’s as if they’re removing the hose from the hydrant and connecting it to a gasoline truck and taking aim at the blaze.

This isn’t about whether or not we should deal with the debt, but rather, is this the time to do it. Millions of people are trapped in the burning house that is our economy and they are feeling the heat and only the water of jobs and a secure social safety net can put out the flames that threaten them. When we cut spending on programs that not only help people who are impoverished, but helps lift individuals out of poverty (such as education), we give oxygen to the roaring fiscal fire that has already scorched so much of our nation.

In an economic inferno that would make an Arizona wildfire blush, we are being told that the water bill is more important than the conflagration that is poised to consume us. I search for a fire escape and all I see is fire and smoke; I listen for the reassuring tone of a first responder and all I hear, in the distance, are the strains of a violin and the voice of Nero. The house is still on fire.

Yes, I know this is political theater; and yes, I know that this bill, as popular as it might be with the Tea-Party faction of House Republicans, may have a tough time passing in the House and absolutely no chance of passing in the Senate. Yet, I believe it behooves us to take a look at the details of this plan that has now been thrust into the national spotlight. Here are the major points of the bill:

•The plan would lock in cuts over the next ten years at least as severe as those in the Ryan budget plan.
•It would require a two-thirds vote in the House & Senate to raise the current debt ceiling.
•The measure cites three constitutional balanced-budget amendments (H.J. Res 1, S.J. Res 10, and H.J. Res 56) and states that Congress must approve one of them or a similar measure before the debt limit can be raised.
•The bill would require cuts totaling $111 billion immediately, in the fiscal year that starts 75 days from now.
•Requires that federal spending be kept at 18% of GDP in the next fiscal year

Now that we outlined the various points of the bill let’s deconstruct those points:

1.By not adding anything in terms of new revenue, deep cuts to crucial programs becomes the only alternative that’s left for lawmakers.
2.By requiring an impossible-to-reach super-majority in both houses of Congress to raise the current debt ceiling, the ultra-conservatives in the House have said, in effect, economic implosion doesn’t faze us in the least.
3.All three of the cited proposals would require cuts deeper than those in the Ryan budget.  All three measures would establish a constitutional requirement that total federal expenditures may not exceed 18 percent of GDP, and all three would essentially require that the budget be balanced within the coming decade.
4.Although $111 billion represents less than 1% of the economy, the timing of the cuts might further weaken the recovery. Congressional Budget Office Director Douglas Elmendorf told the House Budget committee in June that a $100 billion cut next year would be enough to affect their projections for GDP growth over the next few years.
5.Their bill is designed to keep spending at 18 percent of GDP, while President Obama has forwarded that spending be 23% of GDP. It might appear, to some, that those numbers aren’t that far apart, percentage-wise, but that 5% represents $700 billion dollars in spending. Let’s put that in greater perspective: Former CBO Director Rudolph Penner states  that by 2035, spending on Medicare, Social Security and interest on the debt is likely to account for 14% of GDP. Under an 18% spending cap, which would leave 4% to pay for everything else… the United States today spends 4.7% of its GDP on defense alone.

What this bill shows us, in bright and brilliant color, the extreme economic orthodoxy of the ultra-conservative wing of the Republican Party. This is, as a lucid Newt Gingrich said of the Ryan plan, right-wing social engineering.

In the face of a 9.2 percent unemployment rate, cuts made this fast and this deep poise us not merely for a recession, but a depression.  The cuts would equal 0.7 percent of the projected Gross Domestic Product in fiscal year 2012 and would cause the loss of roughly 700,000 jobs in the midst of this rather anemic economy.  The Cut, Cap & Balance Act fails in that a balanced bottom line does not automatically equal a healthy economy.

It also fails in that it is unjust and imbalanced in its approach. If this plan became law, Congress would continue to decide (as they do now) by a straight majority in the House and a 2/3 vote in the Senate (or a straight majority in some cases), to cut funding for education, healthcare, Social Security, etc. To raise taxes and close corporate loopholes, however, would require a super-majority in both houses. This piece of legislation makes Paul Ryan look like a stark, raving centrist.

The Republican leadership knows that this vote is purely symbolic, but contained in the shell of this symbol is the kernel of their very real ideology. This group of legislators propose making the continued segregation and concentration of wealth towards the top a near-constitutional right, while, simultaneously, making deep cuts into programs that help the most vulnerable a sure certainty.

The cut, cap and balance mindset operates in a decontextualized environment that ignores current economic realities; gives no leeway to navigate through any future economic crisis; continues policies such as rampant deregulation and tax policy that got us where we are in the first place; and leaves the most impoverished in our society in greater financial uncertainty and difficulty.

As I said in the beginning, I know that this bill won't become law, but any bill such as this, that passes any house of Congress, ought to make all of us more vigilant.