Ken Taylor and Alan Houseman: Deficit Reduction Should Not Sacrifice Our Children

December 26, 2012 | The Capitol Times |  Link to article

The world will not abruptly come to an end if a deal to avoid the looming "fiscal cliff" is not reached by Jan. 1. But the automatic tax increases and spending cuts set to begin on New Year's Day are very real, and children will be among their first victims.

Nowhere is the price of shortsighted cuts higher than in early childhood education. High-quality early learning opportunities have a proven record of reducing future health care, education, and criminal justice costs. Spending on early education provides some of the best returns of any public investment.

Last month, Wisconsin was awarded $22.7 million from the federal Race to the Top Early Learning Challenge, one of five states to receive grants this year. But failure to avert the fiscal cliff would result in 8 percent cuts in Head Start and a portion of the funding for the Child Care and Development Block Grant, programs key to ensuring that low-income children have access to high-quality early education.

The earned income tax credit, the child tax credit, and unemployment insurance prevented thousands of Wisconsin families from falling further into poverty last year. Key improvements to these programs will expire unless Congress acts. Cuts to the EITC would hit Wisconsin families particularly hard, since the state has its own credit that piggybacks on the federal program.

Not long ago, Wisconsin was well on its way toward providing health insurance coverage for all our children. But that progress has stalled because of state cuts, and it could be reversed by potential federal cuts. The federal Medicaid program plays an important role in providing coverage for children, who account for about half of Medicaid enrollment in Wisconsin. The federal government contributes three-fifths of program costs.

Earlier cuts to a variety of important programs have already resulted in a frayed social safety net. With nearly one in five Wisconsin children living in poverty and almost 8 percent living in extreme poverty, this is a terrible time to further unravel the support systems these children and their families rely on for survival.

As important as it is to avoid the fiscal cliff, we must also make sure not to create a solution that ultimately does as much damage as the automatic cuts. What we need is a balanced approach that includes new revenue and spending cuts - as has been endorsed by at least two bipartisan deficit reduction commissions.

Any deal to avoid the fiscal cliff must reflect several core principles. First, it must not exacerbate poverty or income inequality.

Second, any deal must allow the Bush tax cuts for the wealthiest Americans to expire. According to the nonpartisan Congressional Budget Office, extending these tax cuts would account for nearly half the projected growth in the nation's debt for the foreseeable future.

Third, there should be no harmful changes to the Medicaid and food stamp programs, or the refundable tax credits that rescue even more Wisconsin children from living in poverty. Congress should also avoid "savings" that simply shift burdens to the states.

Finally, the deficit reduction plan should take into account the $1.5 trillion in reductions to nondefense discretionary spending that have already been made. The portion of the overall federal budget dedicated to this category of spending has shrunk dramatically in recent years.

The fiscal cliff represents a big challenge for our elected leaders, and spending cuts must be part of the solution. But we must avoid cuts that will save a little now only to cost us far more in the future. More importantly, we must take care not to solve our fiscal problems on the backs of our children, who did nothing to cause the budget problems we face today, and whom we must trust to overcome the next batch of challenges our nation will face tomorrow.

 

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