Is there a rainbow for children behind the fiscal cloud?
Now that the election is over, it’s time to act like adults. Federal and state political leaders face a daunting but mathematically unavoidable challenge. As deficits grow and debt mounts, we are bequeathing a staggering burden to the next generation. Who knowingly and willfully does that to their children?
Americans, starting with our leaders, need to acknowledge reality. At the federal level, for every $60 we collect in taxes, we spend $100, clearly an untenable situation. Simply put, benefits can’t continue growing at their current rate, and, as we move out of recession, current taxes can’t stay so low that they fail to cover our current expenses. Our elected leaders have to find common ground and hold fast to it if we are ever to escape the current fiscal cloud and chart a course to a better future.
Fortunately, and notwithstanding the bruising political season we’ve just endured, there is some common ground.
First, many agree on the importance of investing in children. For example, both presidential candidates stressed the importance of education and maintaining Pell grants for college students. Every generation wants to create a better future for its progeny. We have a moral obligation not to leave huge debts for our children and grandchildren to pay!
Second, common ground exists, and expands daily, on the value of supporting evidence-based programs. No one supports throwing more money at programs that don’t work, whether it’s programs for children or other government programs. That’s one lesson from the past century for 21st century government. Evidence-based programs to prevent teen pregnancy, enhance school readiness, improve teacher quality, reduce violence, and address other problems among children and youth show great promise and deserve continued investments. But that shift can happen only if ineffective efforts give way to proven approaches.
Third, while you’d never guess it from the political ads, many proposals to address the deficit have similar approaches, although their details differ. Both presidential candidates, as well as varied fiscal commissions, agreed that many tax subsidies are inefficient. For instance, they shared opposition to tax breaks for expensive homes and Cadillac health insurance plans. They also agreed that we must get programs like Social Security into long-term balance. Many other deficit-reducing proposals have been recommended repeatedly by Republican and Democratic budget officials and presidents alike, such as reducing subsidies for wealthy farmers and compensating government workers on the basis of merit. These changes can be used not only to reduce deficits directly and indirectly through lower interest costs, but also to free up resources to support more productive investments.
The numbers themselves show how possibilities open up if we move forward together. Look at any budget projection, and it will show that 10 years from now the government expects to spend close to $1 trillion more—a bit less under Republicans and a bit more under Democrats, but more nonetheless. That’s in all the projections of both political parties. Almost all of the same projections assume that the economy will be 30 percent richer within a decade. If so, then regardless of whether government is a smaller or larger slice of the bigger economic pie, it can still do a lot more—if it’s not boxed in by past legislation, and if it doesn’t let stale government spending and tax programs, along with huge budget deficits, reduce or destroy normal economic growth.
These areas of agreement offer an opportunity that we should not ignore. We can reduce the deficit, cut back on unproven spending and tax subsidies, pay our bills, and invest in what the evidence tells us works for children, youth, and the nation itself. We’re not suggesting finding a pot of gold at the end of the rainbow, but simply removing the illusion—and it is an illusion—that a stagnant fiscal cloud hovers over us. Yes, moving toward real budget reform requires political leadership, but there exists considerable common ground for building a future-oriented agenda around which Americans can unite.