Deficits

One of the tasks facing those of us who teach public policy is getting students to recognize that there are issues that people of good will see differently—that even when people agree upon ends, they may have good-faith debates over means.

For example, a majority of Americans think of themselves as fiscal conservatives, but that doesn’t mean they necessarily agree about which policies are fiscally responsible. Depending upon their understanding of economics, some people will argue that now is the time to cut back spending to concentrate on deficit reduction; others will insist that cuts now would just delay economic recovery and reduce tax receipts–that we should spend to stimulate the economy and create jobs, because more jobs will both reduce government expenditures and generate more tax revenues with which to pay down the deficit. Both groups want to reduce the deficit; it’s an honest disagreement over the best way to do so.

Other disagreements are harder to understand—and much harder to explain to students.

The Zadroga 9/11 Health and Compensation Act would pay health care costs for 9/11 first responders who were sickened by toxic fumes and debris when the Twin Towers fell.  I don’t use the word “hero” very often, but that’s what these firefighters, police officers and medics were. They braved the inferno in order to rescue those inside, and they are now suffering from injuries and illnesses caused by that desperate effort. It passed the House with 90% of Republicans opposed. Then Senate Republicans refused to allow a vote on it, because “it would add to the deficit.”

Why in the world would Republicans oppose this bill? Concern for the deficit would be more believable had GOP Senators not been holding this and other measures hostage to their insistence that the richest 2% of Americans retain the favorable tax rates they received from George W. Bush.

Extending those rates would cost many billions more than providing much-needed medical care for first responders. Marginal rates are at historic lows: in 1945, the rate was 91% of every dollar earned over 200,000; in 1982, 50% of everything over 106,000; in 1993, 39.6% of earnings over 250,000.  It is now 35% of everything over 357,700. If the Bush tax cuts expire, rates will revert to 1993 levels. Those levels would remain very low by historical standards, but even so, expiration would generate billions to reduce the deficit.

Republicans argue that low taxes on the wealthy spur job creation. The evidence for that assertion is mixed, to put it mildly. If we really want to encourage job creation, we’d be better served giving businesses tax credits for new jobs.

The income gap between rich and poor in this country is wider than it has been since the gilded age. Joblessness is at its highest point since the Depression. These indicators are warning signs, not just for our economic health, but for our civic well-being.

Denying first responders desperately needed medical treatment so that millionaires won’t have to endure a 4.6% marginal tax rate increase cannot be excused as a good-faith policy dispute, and it can’t be explained to students in those terms. Whatever the actual motive, it is, quite simply, disgraceful.

Perhaps what we need to tell our students is that Americans are facing two kinds of deficits right now: monetary and moral. Ultimately, our fiscal problems—difficult as they seem—may be easier to resolve.

 

 

 

 

 

 

 

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