COLUMN: Balancing Costs

From Peter Morrison's "Think For Yourself," Fall '95 From Peter Morrison's "Think For Yourself," Fall '95During the Republican onslaught of 1994, GOP leaders made a promise to the country: We will balance the budget and eliminate the deficit. And now Republicans are trying to make good on that promise. Also, the plan offers large tax breaks to families whose incomes are as high as $200,000 per year. While eliminating the deficit, the plan still manages to reduce taxes by $245 billion over the same seven-year period. The net result would be a strengthened economic situation for the country and less taxes at the same time. The plan, as the Republicans present it, sounds outstanding. But let's look at the numbers they don't tell you about. In order to cut the deficit and still reduce taxes, the Republicans must get the money from somewhere. Based on the slightly varying House and Senate versions of the bill, here's the worst case scenario: The bill would shave $170 billion from projected increases in Medicaid spending over seven years. Medicaid provides health coverage to millions of low-income children, adults, elderly and disabled people. Health officials estimate that nine to 12 million people would lose coverage by the year 2002 under the Republican plan. As many as 4.4 million children could lose health coverage by the same year. And these are not children whose parents are all on welfare -- over half of these children have working parents. The bill would deny social security benefits to about 755,000 disabled children and cut nutrition assistance for 14 million children. The Republican vision would also reduce child abuse protection by nearly 20 percent and deny assistance to more than 16,000 homeless children. The Republican plan would also reduce spending on Medicare, the health program for the elderly and disabled, by $270 billion. The American College of Physicians says that this cut will force premiums for care to double by 2002, placing undo pressure on citizens who already spend one dollar in five on medical expenses. If the elderly could afford these increases, then the cuts would at least be bearable. But the average annual income for people over 65 years old is $18,000. People could pay as much as 25 percent of their personal income toward medical coverage due to this cut in Medicare. The Republicans also will try to save $23 billion over seven years by reducing the number of working poor who qualify for the Earned Income Tax Credit. This credit is given to working people who, even though they hold jobs, do not earn enough money to pay their complete share of taxes. So this program sends the message that even though these workers may not be able to completely pay their taxes, the government still wants them to work. This incentive will soon be non-existent. And for those of you not concerned with sick children or the infirm elderly, and who only vote based on self-interest, well, the cuts are going to affect students too. The interest subsidy students can request for the first six months after graduation would be abolished. So, rather than paying interest starting six months after you graduate, you will have to start paying interest on your loans immediately. This move will add $700 to $2,500 to a student's debt. It also results in $5,000 in additional cost for families who use the PLUS loan program. Furthermore, the bill imposes a direct .85 percent tax on colleges and universities which participate in the student loan program. The additional cost of this tax will surely be shifted on to students as well. The GOP budget bill will also eliminate summer job opportunities for four million children and young adults. Republicans will argue that everyone needs to share the hardship in order to stand the country back on its economic feet. I agree. But that is not what this bill does at all. Instead of spreading the hardship equally among everyone, it denies the poor, the working poor, the elderly, children, the sick and students from desperately needed social programs, while at the same time giving tax breaks to the rich -- those making up to $200,000. Is that balanced? Is that fair? Is that even moral? While millions of people -- living, breathing human beings with faces and feelings and emotions -- lose what little medical coverage they receive, the party of the rich is trying to give its rich constituents more money to put in their pockets. That rationale is disgusting. The Republicans will argue that reduction in federal programs will result in the growth of state programs that are more efficient. And, I would agree that we need to find ways to curb the size of government. But the GOP way is not the right way. Let me explain: If state A and state B are located right next to each other, and state A puts in place a compassionate, efficient welfare program that teaches job skills and provides incentives to find jobs, but state B decides to use its funds to fix its roads instead of providing assistance for the poor, then which state do you think the impoverished will move to if they can? Correct -- state A. What would result would be a minority of states supporting the entire country's lower class. State A could not possibly survive financially. Therefore, this type of state system provides the incentive not to put in place quality programs, because if a state does implement such social programs, then it knows that it will bare a disproportionate responsibility. In a system in which states have more control, there is very little incentive to replace federally funded programs with state funded ones. Republicans will also argue that tax cuts for the rich will result in economic growth. While this causal relationship has been hypothesized, it has never been proven. The argument is as follows: Lower taxes for the rich allows wealthy people to spend more money. If they spend more money, then businesses will make more money and therefore be able to create jobs. But lowering taxes and spending the extra money are two completely separate actions. Just because a person has lower taxes and hence more money, by no means forces him to spend that extra money. Although it is possible, there is no guarantee. The rich could simply pocket the extra money they receive from tax breaks. The only real guarantee in the Republican plan is that the poor, sick, children, elderly and students will bare the brunt of a massive reduction plan instead of the people who can really afford it. And isn't it interesting that many of the groups that will suffer most rarely vote in elections? The Republicans aren't dumb. They say to themselves, "Should we balance the budget by making voters pay, or non-voters?" So, as a result, students who don't have very high turnout during elections, children who are under 18 and cannot vote, the poor who worry more about survival than voting, and the sick will allow them to carry the country on their backs, while the wealthy put more money in their pockets. The bottom line is that the GOP plan is wrong. Republicans are grasping for money from every social program so that they can live up to their promise of a balanced budget and a tax cut for the rich. This budget doesn't look at improving medical coverage or educating young adults, or finding job skills for the poor. It looks at dollars and cents, plain and simple. Well, if numbers are your fancy, then look at the numbers and then, for God's sake, try and put a face on these statistics. Republicans and Democrats can debate numbers, dollars and percentages until they are blue in the face, but what they are losing sight of is that the statistics are living, breathing people who feel the pain of hunger, and the cold of sleeping on the streets, and the fear of deadly disease. Imagine yourself looking into the face of someone who depends on this funding. When the Republicans swept into both the House and Senate in 1994, many citizens who may have opposed the GOP Congress did not come out and vote. Many who typically vote Democratic crossed the party line. Well, that's fine. But I can't imagine that those who voted for the Republican Congress supported such an all-out attack on children, on the sick, on the groups that typically cannot defend themselves. And now that you see where the Republican Congress plans to take us, you better get out and vote during the the Presidential election so that the country can at least maintain some common sense in the White House. When you look at these numbers and see the divide between poor and rich continuing to widen, maybe with your vote you will send the message to Republicans that American citizens are flesh and blood and more valuable than simple fiscal figures and their vision of the bottom line.