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Published on Tuesday, August 28, 2001
Spend The Projected Surplus On Unmet Human Needs
by Seth Sandronsky
Fiscal restraint. Is this why Republicans and Democrats are scared to spend what the Congressional Budget Office projects is a $153 billion federal budget surplus on unmet human needs? If not now, when is it the right time for more public spending to improve child and health care, jobs, schools and housing?

Today, conventional wisdom holds that fiscal policy should be restrained. Presumably, expanding public spending is a thing to avoid. It can cause dependency, which leads to poverty, etc. But where is the proof?

Does anybody recall the GI Bill of Rights for veterans of World War II and the Korean War? Public spending funded the GI Bill. It benefited 16 million (mainly white, male) returning military personnel in the areas of employment, business and home loans and education.

Returning to the dawn of the Clinton years, federal budget surpluses emerged when the government spent less than it collected. Then-president Clinton and his economists boasted that the federal budget surplus was helping to drive the economic expansion, which featured a booming stock market.

Wealth hasn’t trickled downward, however. According to the Economic Policy Institute, “One in three working families with young children cannot afford to meet their basic needs.” That’s a crime in America, the world’s richest nation.

Under the Bush administration, the nation's economic activity is slowing to a snail’s pace. Hourly workers are facing an intensified challenge to make ends meet. When economic growth slows, joblessness grows.

Cynically feeling workers’ pain, Bush got his $1.35 trillion tax cut over 10 years. It will halt the current economic slowdown, he said, and put money in the hands of the people where it belongs. Yet the “how” of Bush’s claim doesn’t square with the details, though they do indicate who will get most of the pain relief.

The top one percent of income earners gets 37 percent of the tax cut total. The bottom 60 percent of income earners get 15 percent of the tax cut total. According to the Center for Budget and Policy Priorities, the working-poor and their family members, some 12.2 million Americans, get no tax savings under the Bush tax-cut. Thus those who need the tax-cut benefits the most get the least.

Bush has a differing view of his tax-cut limitations. That would be Congress over-spending this fall and busting the budget, he warned in a recent radio talk.

I completely disagree. We need to broaden the debate about federal fiscal policy. Now is the time to question the assumption of the president and Congress that federal spending (on society, not the military) should be restrained.

Let’s spend the $153 billion federal surplus projected by the CBO on the unmet needs of American people today. Public spending for them can be a solution, not the problem, to what is basically a failure of the private sector. To be sure, government is no panacea, but it can provide what people need to live decent lives.

Currently, false assumptions about public spending yield false conclusions. In a nutshell, here’s why. Too many Democrats and Republicans represent dollars instead of people. Progress will come when politicians begin responding to the needs of the general population instead of financial markets.

Additional funds to make up any federal budget shortfalls in spending to improve people’s living standards could come from taxing the super rich and cutting the military budget. Such fiscal alternatives present political—not technical—challenges to the status quo.

The sooner the public catches on that they can influence politicians’ fiscal policy the better. Many must challenge the few. Where there’s a popular political will, there’s a way.

Seth Sandronsky is an editor with Because People Matter, Sacramento's progressive newspaper <>.


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