On Saturday, June 26, 2010, a group called "America Speaks" held a nationwide conference, with a few dozen cities linked by video and internet links. Portsmouth, NH was one of the sites. The conference was sponsored by one very conservative thinktank (the Peter G. Peterson Foundation) and two moderately conservative ones: the main topic was the need to "do something" about entitlements and the deficit. I was going to skip it, but Olivia Zink of the New Hampshire Citizens Alliance convinced me to go. More to the point, she convinced me to write the following op-ed piece, which ran in the June 26 Foster's Daily Democrat as well as on BlueHampshire.com.
Original URL (subject to link rot over time):
"The conversation we should be having"
Today (June 26), Americans will gather across the country to
discuss the choices we face with regard to spending and the federal
Dozens of town hall forums, sponsored by a non-partisan organization called "America Speaks," will offer participants an opportunity to discuss our nation's needs and priorities. UNH's Carsey Institute will co-sponsor one such forum locally, at the Portsmouth Public Library, from 11 a.m. to 6:30 p.m. [oops! actually the event was the Portsmouth High School] Many Americans will use these forums to express concern about the federal budget deficit.
In the long run, our government's budget deficits are unsustainable and must be addressed. In the short run, however, there are other issues which we should be talking about during our national conversation.
Let's start by acknowledging a painful reality: Our economy has lost eight million jobs. Fifteen million people are officially unemployed while another 11 million are involuntarily working part-time or have dropped out of the labor force. Millions of people have been out of work for more than a year.
We don't just face a budget deficit: we face a jobs deficit.? The two are intrinsically linked.
The Office of Management and Budget estimates a federal budget deficit of $1.1 trillion for fiscal year 2010 (i.e., October 2009 through September 2010.) Although many would have us believe otherwise, this deficit is not caused by domestic discretionary spending by the federal government. Such spending has been essentially "level-funded" in recent budgets: in other words, it neither increased or decreased.
Rather, the federal deficit finds its roots in four areas:
First, the 2001 and 2003 tax cuts, targeted primarily toward the wealthiest Americans, added about $1.7 trillion to deficits as of 2008. They have added even more since.
Second, the combined cost of the wars in Afghanistan and Iraq since our country invaded Afghanistan in late 2001 is just over $1 trillion.
These wars were fought off-budget during the Bush administration, and they were not paid for by new taxes (or any other revenue enhancements.)
Third, rising health care costs in both the private and public sectors, including entitlement programs such as Medicare and Medicaid, have added trillions of dollars to our deficits over a long period of time. Health care reform will rein these costs in but an aging population will guarantee that providing quality, affordable health care for all will remain an ongoing challenge.
Fourth, the current economic crisis has deprived governments at all levels of needed revenue. When people work, they pay taxes, and they do not require unemployment benefits, COBRA or other forms of public assistance. Remove eight million people from the workforce and you have just eliminated eight million taxpayers. It is fashionable to say that government can't create jobs. Here in New Hampshire, the Republican Party has taken to referring to any and all taxes as "job-killing" taxes on the theory that nothing government does is of any benefit to the rest of the economy. But in fact, government spending can create jobs. The dollar bills in Uncle Sam's pocket are just as green as anyone else's. Government jobs are good jobs, and so are the millions of jobs created by the hundreds of thousands of large and small enterprises nationwide which rely on government contracts.
Although I am not a fan of big government, I might also add that government does a lot of things which are actually useful.
Happily, we have the ability to simultaneously address the deficit and take on what should be our nation's most compelling and urgent priority: putting people back to work.
We can allow the Bush tax cuts for the wealthiest Americans to expire.
We can cut corporate tax loopholes enjoyed by companies like BP. We can continue plans to eventually withdraw from Iraq and Afghanistan and, while we're at it, cut Pentagon waste. Pentagon cost overruns alone are taxing Americans to the tune of $300 billion to $400 billion.
We can immediate stimulate the economy by passing a robust jobs bill and making sure our unemployed workers have the safety net they need in the form of unemployment and COBRA benefits. (This might add to domestic discretionary spending in the short run, but in the long run we will see a healthy return on our investment in the form of deficit> reduction.)
As we Americans discuss spending and the deficit, it's important that we not lose sight of how we got where we are and let's remember what our needs, hopes and dreams are for our country's future.
State Rep. Timothy Horrigan
(I snuck out shortly after lunch to go home and watch the USA-Ghana soccer game, which the USA lost. The conference was too long, but it was interesting: the citizens were very hostile to the assumptions of the organizers. Basically, the sentiment in Portsmouth was "deficits be damned.")