Category Archives: Debt and deficits

Levees and the era of neglect

Debt and deficits, Politics, State government

By Steve Brawner
© 2015 by Steve Brawner Communications, Inc.

A column with the word “levees” in the headline probably won’t attract a record number of readers. Unless you live in a floodplain, they’re just big piles of dirt, right?

Well, not really.

The recent floods have drawn attention to Arkansas’ deteriorating levees. Really, “forgotten” is the better word. As reported in the Arkansas Democrat-Gazette Sunday and elsewhere, it turns out that, in many cases, no one’s really in charge of maintaining them, or even caring whether or not they exist. They were built when the need was obvious, such as after the Great Flood of 1927, when the overflowing Mississippi River submerged much of the state. Local boards were set up to maintain them, and legislation was passed to ensure their independence. The board members – those with memories of those floods – grew old and died or for whatever reason stopped paying attention. Those big piles of dirt continued to function fine for decades – until, this past spring, when at least a couple of them didn’t.

A levee is just like anything else in that it becomes less effective over time unless it is maintained. Dirt erodes. Vegetation overgrows. Mankind intrudes. As the Democrat-Gazette reported, one levee nearly failed because someone once dug a hole at its base for a construction project.

This spring was a wake-up call, so legislators are scheduled to hold hearings June 24. It helps that one of them, Sen. Jason Rapert, R-Conway, saw his property submerged under water during the flooding. The issues will be the same as they often are in a democracy: Should someone be in charge, and if so, who? And, where will the money come from?

Were this only about piles of dirt, I probably wouldn’t be writing about it, but Arkansas’ levee situation is part of a larger story – in fact, one of today’s biggest.

For centuries, this was the land of sacrificial investment. Immigrants came here knowing it might take a generation for the family to really enjoy the benefits. Wars were fought where more than just a few contributed. Railroads were laid. Roads and bridges were built. Arkansas taxpayers in the early 20th century paid extra so that’s today’s taxpayers would have an extra sturdy State Capitol to conduct the people’s business.

Contrast that with today, when it’s way too much about the present, and we’ll let our children fend for themselves. The obvious example is the $18 trillion national debt – equivalent to $57,000 for every American man, woman and child – almost all of which has been created since 1980.

But there are other less obvious ways in which we’re passing on the costs of the things we take for granted because of misplaced priorities and waste. For example, the nation isn’t properly maintaining its aging transportation infrastructure, much less making significant improvements. Instead of making tough choices and really addressing the deficiencies, Congress patched a hole in the highway budget this past year partly through an accounting gimmick that borrows from the next 10 years. That money has been spent, future taxpayers will be paying, and yet the Highway Trust Fund is nearly insolvent again. Meanwhile, plumbing systems in many cities are aging. In some cases, they’re more than a century old. Few care as long as it goes away when they flush, but someone will have to fix those pipes eventually.

Americans often assign names and characteristics to generations: the baby boomers, Generation X, the Millennials, but it won’t take long for future Americans to lump us all into one category. We think of the 1700s as the age of exploration and the American Revolution, the 1800s as the era of expansion and the Civil War, and the 1900s as the century of American victory and ascendancy. I fear they’ll someday say ours was the Era of Neglect.

It doesn’t have to be this way. We’re still capable of investing. Maybe this recent scare will result in a renewed emphasis on levee maintenance. Everyone recognizes it costs much less to maintain a big pile of dirt than it does to rebuild a flooded community. Meanwhile, Congress at least recognizes the need to invest in the nation’s transportation infrastructure, even if it hasn’t figured out how. Sometimes those old plumbing pipes actually do get fixed.

I’m struggling to come up with something positive to say about the national debt. How about this? Americans have overcome worse.

Let’s just hope it doesn’t take the equivalent of a flood before we’ll try.

Huckabee’s debt approach not serious enough

Debt and deficits, Politics

Uncle Sam hangs on for webBy Steve Brawner
© 2015 by Steve Brawner Communications, Inc.

Former Gov. Mike Huckabee made some headlines this past week when it came to light that he had made a joke about transgender people during a February speech. He said that, given the chance in high school, he “would have found my feminine side” so he could take showers with the girls in P.E. This was newsworthy, apparently, because of the attention surrounding Bruce Jenner becoming Caitlyn Jenner.

This column is not about that joke. Let’s instead focus on something Huckabee has been saying when he’s completely serious.

Huckabee has released a pledge in which he makes 17 promises, including to “protect Social Security and Medicare and never rob seniors of the benefits they were promised and forced to pay for.” He has criticized other Republicans for proposing to change those two programs, which together compose 38 percent of all federal spending and are growing.

Huckabee is right that benefits should not be cut for current beneficiaries or for those who are nearing retirement age. They’ve paid into the system their entire lives and planned their retirements based on the rules, with no real say in what those rules were. People a little older than me (I’m 46) and younger, on the other hand, are probably going to have to accept some changes.

But in an interview with Fox News’ Neil Cavuto after speaking in Florida June 2, Huckabee said that the rules shouldn’t be changed for anyone paying into the system, including for those just starting out as teenagers who won’t collect for another 50-something years. He openly told Cavuto that he is differentiating himself from other Republicans who have tiptoed toward this politically hazardous issue.

With the aging of the baby boomers, longer life spans, and increasing health care costs, Social Security and Medicare need some fixes. For example, Social Security’s non-existent “trust fund” is due to become insolvent in 2033. That’s 18 years from now, not 50. If the actuarial tables are correct, whoever is in office that year will be forced to either cut benefits by 23 percent, raise taxes, make deep cuts elsewhere, or borrow from the future. He or she will have to make difficult decisions then because current political leaders won’t make them now.

One honest way to continue paying current Medicare and Social Security benefits is to raise taxes and cut other government programs, including the military. If that’s what America wants to do, I’ll write my check now so my kids don’t have to.

The problem is that Huckabee doesn’t propose anything like that. Among his 17 promises are to “support a balanced budget amendment to the Constitution,” but then he pledges to “secure our borders,” “restore our military infrastructure,” and “end the national disgrace of failing to properly care for our veterans” – all worthy goals individually, but none of them free.

There are not a lot of spending cuts in those 17 promises. He does pledge to deny government benefits for illegal immigrants and to repeal Obamacare. That’s not nearly enough to balance the budget, and besides, the pre-Obamacare health care system was a growing driver of the national debt, too. He did say in his speech that the country should redirect its health care spending toward curing diseases such as cancer and Alzheimer’s. If those efforts were successful, Medicare would be much more sustainable.

Meanwhile, he promises to “oppose and veto any and all efforts to increase taxes” and to replace the current income tax with a national sales tax. He says the new tax system would grow the economy, generate revenue, and be a better way to pay for Social Security and Medicare than cutting spending or raising taxes.

A national sales tax might or might not be a good idea, but it certainly would be a huge experiment. If it raised less revenue than expected, then would Huckabee cut spending?

For decades, Republicans and Democrats have engaged in the same politics: Grow government first, and then worry about paying for it later, or never. At least Huckabee is being honest about the fact that he won’t cut Social Security and Medicare or raise taxes.

But by doing so, he’s contributing to the national misperception that this impossible math is all going to work. Americans haven’t accepted the hard truth that if they want these government programs, they’ll have to pay for them. Leaders must tell them that truth.

Let’s hope Huckabee will use his considerable skills to do so. The national debt is no joke.

Leadership needed to keep the republic

Debt and deficits, Politics, U.S. Congress

By Steve Brawner
© 2015 by Steve Brawner Communications, Inc.

As Benjamin Franklin was leaving Independence Hall at the end of the Constitutional Convention, a woman asked him if the delegates had created a republic or a monarchy. According to notes written by Dr. James McHenry, a Maryland delegate, Franklin replied, “A republic, if you can keep it.”

He did not say “democracy,” which the Founding Fathers saw as “mob rule.” Instead, they created a republic, where the people have ultimate authority by electing their officials but don’t stand in town squares and raise their hands to decide national issues.

Given that history, should elected officials vote their consciences, or should they follow popular opinion? Both, if they are doing their jobs. They should listen to their constituents and give great weight to their wishes, but if all they do is stick their fingers in the air and then follow the political winds, why should they exist? Why not just post every question currently facing Congress on the internet and let us all vote by clicking? How much funding should the Central Intelligence Agency receive this year? Click.

The character quality that’s needed, and the one that’s been missing far too long, is leadership. Elected officials must be willing to make tough calls, explain their decisions, and then accept the consequences. In some countries, if you lose power, you die. Egypt, for example, recently sentenced its previous president, Mohammed Morsi, to execution. In the United States, former Sen. Mark Pryor became a well-paid lobbyist after being “deposed,” as did Blanche Lincoln, Tim Hutchinson and many others.

And that brings us to the national debt. I think I first wrote about the subject in 1992, and frankly, I’m getting tired of trying to convince you people to be concerned about it. But I’ll try again. The debt has reached $18.2 trillion – roughly $57,000 for every American man, woman and child. It’s partly financed by foreign creditors, which is a really stupid idea. The government has many trillions of dollars in assets and is not bankrupt. But this is a growing problem because the government has made many trillions of dollars’ worth of promises that it cannot keep.

A number of groups – the Peter G. Peterson Foundation, the Concord Coalition, the Committee for a Responsible Budget – are trying to educate the American people about the debt, and, just as with my columns, it’s not getting through. Americans know no entity can indefinitely spend more than it collects and are concerned about the debt in the abstract, but they oppose specific cuts and don’t want to raise (their own) taxes. It’s hard to balance a budget if you don’t decrease outgo and/or raise income.

Anyway, democracy often doesn’t reflect the will of the majority on a particular issue, but the will of the loudest and most committed less-than-majorities. Any spending cut or tax increase will attract fierce opposition by the groups most affected. What matters is not what 51 percent want. What matters is what 15 percent want that the other 85 percent won’t fight for.

The debt is not the kind of issue that leads Americans to march on the Capitol. It’s a terrible injustice that affects mostly people who are too young to do anything about it. There will never be a groundswell of support for paying it down, even though the alternative is leaving it to our kids and grandkids, which surely few of us want to do.

Because there’s never going to be a groundswell, elected officials must lead. They must make tough decisions that they explain to the public, and then they either will be re-elected, or they will lose and become lobbyists. No one will lop off their head if they raise the gas tax or cut a program somewhere.

It takes a special person to do this, because apparently it’s very tempting in Washington to do whatever it takes to be re-elected. These types of republic-leaders can’t get elected without support. They need campaign donations – in larger increments from those who can, and in smaller increments from the concerned common man. I really wish those groups I mentioned, or at least their allies, would start playing a little more hardball.

There’s been enough talk about this subject. A few of us must lead, and a few more of us must have their backs. And if the American people won’t accept that this republic can’t keep going into debt, then I guess we won’t be able to keep it.

Christie, doc fix: A little honesty in the national debt debate

Debt and deficits, Elections, Politics, U.S. Congress, Uncategorized

By Steve Brawner
© 2015 by Steve Brawner Communications, Inc.

Uncle Sam hangs on for webA couple of things happened this past week that are worth noting because they concern senior citizens (today’s and tomorrow’s) and taxpayers (as usual, mostly tomorrow’s).

On Tuesday, the Senate sent to President Obama the long-awaited and much-discussed Medicare “doc fix.” Each of the past 17 years, Medicare payments to physicians have been scheduled to be cut automatically under something called the sustainable growth rate formula, and each of those years, Congress has suspended those cuts for one year. It’s been a charade, but one with real consequences because Medicare payments to doctors are low, and some doctors routinely threaten to stop treating those patients. Those who still do would like more certainty than these one-year fixes provide.

Now there will be no more last-minute reversals of the pretend spending cuts. The problem, as is usually the case, is that Congress did not offset the costs of the doc fix, either with spending cuts or higher taxes. According to the Congressional Budget Office, the legislation will add $141 billion to the national debt through 2025 – money that almost certainly would have been added anyway, just one year at a time.

Arkansas Sens. John Boozman and Tom Cotton voted for the doc fix, which passed 92-8. Earlier, they voted for an amendment that would have required Congress to offset the bill’s costs. That amendment failed, 58-42.

So we’re still burdening future generations with more debt, but at least we’re being more honest and transparent about it. Unfortunately, that qualifies as progress.

On the same day that the Senate passed the doc fix, New Jersey Gov. Chris Christie, a probable presidential candidate, proposed in a speech a number of meaningful reforms to Social Security, Medicare and Medicaid. Generally speaking, Medicare serves seniors, and Medicaid also serves seniors along with poor people and the disabled.

Christie’s proposals would affect Americans of all income classes. The retirement age would be raised to 69 very gradually (for Medicare, it would reach that age in 2064). Future senior citizens earning annual incomes above $200,000 from other sources no longer would receive Social Security benefits. Wealthier recipients would pay a higher percentage of Medicare premium costs than they do now. Christie would reform the qualification process for Social Security Disability Insurance, which has become a welfare program for younger recipients. Medicaid recipients above the poverty line would be required to pay co-pays rather than basically receive their health care for free.

Why is he talking about those popular programs? Because they are important contributors to the national debt, which has grown from less than $1 trillion in 1981 to more than $18 trillion today. According to the Committee for a Responsible Federal Budget, $24.11 of every $100 the federal government spends goes to Social Security, while $14.42 goes to Medicare and $8.60 goes to Medicaid. That’s $47.13 of every $100, an amount that will grow as the baby boomers age.

What’s important about Christie’s speech is not whether he’s offered the right answers, but that he’s talking about the subject at all. Social Security has long been called the “third rail” of American politics: Like the electrified third rail on a subway system, if you touch it, you die. Politicians would rather talk about lowering taxes and increasing spending now because the young and unborn who will pay for those decisions don’t yet vote.

Hopefully, Christie’s plan will at least start a real discussion. A government that is $18 trillion in debt and adding more every year must cut spending, increase tax revenues, or do some combination of both. Other potential presidential candidates – including the two with Arkansas ties, Hillary Clinton and Mike Huckabee – should offer their own concrete proposals, not poll-tested platitudes. Those who want to keep the status quo, or increase spending, or cut taxes should show how they will make the numbers work.

At least then we’d have an honest debate – not just about how big the government should be, but also about how today’s taxpayers pay for the government we already have.

If Christie can’t win that debate, then hopefully someone else can with their own plan that preserves an appropriate social safety net without adding to the debt. We can’t just keep passing government’s costs to our children and grandchildren – like the doc fix does, albeit transparently.