Deficit Reduction Commission Recommendations Must Not Harm Low-Income People
Jun 16, 2010
CLASP has joined a variety of other organizations to ask the National Commission on Fiscal Responsibility and Reform to ensure that its recommendations to cut the deficit will not harm low-income people.
The commission faces an arduous task. This fiscal year, the national debt will exceed $1 trillion, and experts project it will remain high for years to come. Recognizing that this fiscal course cannot continue indefinitely, the White House early this year announced the 18-member, bi-partisan commission and tapped the group to develop policy proposals by Dec. 1, 2010, to "improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run." Members of the commission have said they will consider all domestic programs for the cutting block.
But restoring balance to the budget and ensuring the nation fully recovers from the recent recession cannot be achieved by simply cutting programs. The commission also must consider larger questions such as what are our priorities, what do we collectively value as a nation, and how do we get there? Research shows that a significant majority of the U.S. population believes that the government should take a stronger role in making the economy work for average Americans.
Low-income people who were struggling long before the economic slowdown and those who have been hardest hit by the recession should not have to sacrifice more. They can least bear the burden. Instead, we must make sure the economy works for low-income people by ensuring they have access to opportunity and can contribute to the nation's productivity.
The Coalition on Human Needs, in a letter to the deficit reduction commission outlined how the relative economic prosperity of the last 30 years has failed to benefit low-income populations. CHN noted that average income rose only 11 percent for the bottom fifth of the population from 1979 to 2006. For the next tier, average income rose a modest 18 percent. The scenario was starkly different for those fortunate enough to be at the top. Income rose between 86 percent to 256 percent for those in the top two-fifths. In other words, the rich grew richer and the poor grew poorer.
The route to collective national prosperity begins by creating an environment in which all citizens have opportunity to participate. In many ways, the American Recovery and Reinvestment Act of 2009 built a foundation for this. Besides funding infrastructure projects to create jobs, the ARRA also invested in early childhood programs, child welfare, jobs for disadvantaged youth, Pell grants and adult learning opportunities among other things. After years of inadequate investment, the ARRA provided critical resources that in the long-term will strengthen families and the nation by equipping more people with the tools they need to succeed. The nation can't afford to renege on these ideals, even as it explores ways to reduce the debt.
Further, the truth is that the national debt was climbing long before the economic meltdown and the need for the investment in the ARRA, industry bailouts and other emergency spending. An analysis by the Center on Budget and Policy Priorities shows that President Bush's 2001 and 2003 tax cuts, the wars in Iraq and Afghanistan along with the economic downturn all will contribute to the deficit over the next decade.
Still, we agree that we still must forge ahead and explore how to put the nation on a course that will yield shared economic prosperity. Creating an economic climate in which more people are equipped with the tools they need to prosper and contribute to the nation's economic output benefits all.