Fear of deficits haunts our politics

Published in the Philadelphia Dailiy News, June 21, 2010

A SPECTER is haunting American politics – it’s the great and growing fear of budget deficits.

In Washington, public policies critical to restoring the health of our economy are being delayed because of the deficit. Outside Washington, politicians and opinion leaders, and some citizens, are wringing their hands about our deficits.

Some of these opinion leaders, with foundation backing, are holding a series of public town halls about the deficit, including one in Philadelphia on June 26.

We need to stop and think seriously about the kind of problem the deficit presents and how we should deal with it before we let hysteria lead us down the wrong path.

We need to stop and think, first, about the difference between the immediate and the long-term budget deficit.

Right now, our economy is recovering slowly from the most serious recession since the Great Depression. Jobs are still far too scarce for far too many of our fellow citizens. At the moment, then, we need continued economic stimulus directed at creating jobs. Lowering the deficit, by budget cuts or tax increases, would take us in exactly the wrong direction, reducing that stimulus.

Instead, we need to enact a bill in Congress that extends unemployment insurance; that provides a six-month extension of FMAP, the enhanced Medicaid match that provides the funds for critical state-government programs and the jobs they create; and that extends the COBRA subsidies that pay 65 percent of the health-insurance costs for the newly unemployed. These programs will provide the additional stimulus we need to ensure that the recovery does not stall.

Here in Pennsylvania, the $850 million we receive from FMAP is essential to balancing the state budget and preventing drastic cutbacks in medical assistance and social services, cutbacks that would also cost the state thousands of jobs.

Getting our economy moving again will lead to greater tax revenues without tax increases. Economic growth is thus is the most important thing we can do to reduce deficits in the long term. But it is not likely to be enough. And so we need a discussion about what else we should be doing over the next 10 years to ensure that long-term deficits are brought under control, as they were during the Clinton administration.

It is critical, however, that this discussion be framed properly. That means recognizing that we have fundamental choices to make about the kind of government we need, and how we pay for it.

And, frankly, it means recognizing that public opinion is now divided on these priorities. We can’t and shouldn’t paper over these divisions by calling for “consensus” and a “balanced approach” to deficit reduction. Instead, now is the time to articulate those choices.

Let me be blunt. I don’t want a balanced approach to deficit reduction. I want a progressive approach.

I don’t want to see the deficit reduced by cutting entitlements like Social Security or Medicare that have been so successful in providing our seniors with a decent standard of living and better medical care than any other part of our population.

I don’t want to see the deficit reduced by cutting other domestic programs that provide a modicum of justice and equal opportunity in America, such as federal aid to education, Medicaid or the new health-insurance subsidies; or that provide vital public services such as roads, bridges, public transit or parks and recreation centers; or that protect our environment. Programs that meet these goals are underfunded now.

I do want to see our bloated defense budget – as large as it was at the height of the Cold War – reduced.

And I do want to see the very rich and our corporations pay their fair share of taxes.

Fear can cripple our ability to think through a problem and lead to inadequate and wrongheaded solutions.

We know that our political system will demand that at some point compromises will be made in order to enact legislation that reduces the deficit. But right now, we have to make sure that fear of deficits does not lead to policies in the short term that stall the economic recovery and policies in the long term that betray our ideals.

THE TASK FOR all of us right now is to understand what is at stake in various proposals to reduce the deficit. And the task for progressives is to articulate our vision of a government that takes the lead in moving our country further toward economic justice and the common good.

That is the standard by which different paths to deficit reduction should be measured.

But right now, we have to make sure that fear of deficits does not lead to policies in the short term that stall the economic recovery and policies in the long term that betray our ideals. THE TASK FOR all of us right now is to understand what is at stake in various proposals to reduce the deficit. And the task for progressives is to articulate our vision of a government that takes the lead in moving our country further toward economic justice and the common good. That is the standard by which different paths to deficit reduction should be measured. Marc Stier is executive director of Penn Action and Pennsylvania state director of Health Care for

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