Dave Smith, a certified public accountant, right, converses with Idaho Lt. Gov. Brad Little following a City Club of Idaho Falls luncheon. (photo/Mark Mendiola)
Idaho Lieutenant Governor Brad Little says the crushing federal debt that has burgeoned from $4 trillion in 2000 to $16 trillion in 2013 and existing future obligations most concern him when considering challenges for Idaho’s economy and how the Legislature will tackle them.
“Today we’ve got new challenges. As always, you’ve got the international economy and what kind of curves that’s going to throw America and Idaho,” Little said, commending the downward trend in Idaho’s unemployment rate. “But we’ve still got … way too high an unemployment rate, but even more critical an underemployment rate.”
Unfunded future liabilities such as Social Security and Medicare have gone from $20 trillion to $80 trillion as the U.S. population ages, Little said. Average retirees have paid $110,000 into Medicare, but will take out $350,000 at a rate of 10,000 retirees a day, he noted.
“So, you don’t have to be a rocket scientist to know that that’s unsustainable,” he recently told the City Club of Idaho Falls. “Unfortunately, the president and Congress … have kicked the proverbial can down the road. ... The problem with that can is it’s getting a lot bigger and a lot harder to kick in the fact that they haven’t addressed it.”
Little said Idaho’s congressional delegation has been in the forefront of addressing the deficit crisis, but the task is not easy. If Congress tomorrow were to eliminate every federal employee, it would not cut the annual operating deficit by half. “That’s the magnitude of just the cash deficit that’s out there. So, there are going to be hard decisions that are going to need to be made on the federal level.”
That’s important to Idaho because 30 percent to 40 percent of the money appropriated by the Legislature comes from the federal government. A large percentage of the money used by Idaho cities, counties and highway districts also comes from the same source.
“So, when Congress inevitably does the right thing, we know there’s going to be consequences.”
With the exception of oil-rich states like North Dakota, Montana and Oklahoma, Idaho has led the nation in recovering from the last recession, the lieutenant governor said.
It did so by prudently setting aside rainy day funds, not raising taxes, cutting spending by 20 percent and adhering to a structurally balanced budget, which essentially means one-time money is not spent on ongoing programs, Little said.
“I can tell you even though 40-some states require balanced budgets, there’s very few of them with the exception of those energy states that are in the same position we are.”
What’s even more critical is budget issues cannot be resolved in Idaho or the nation if the economy does not grow. “So that’s a delicate balance that has to take place on both the national level and the state level.”
Retaining existing businesses, recruiting new ones and diversifying the economy are crucial for resilience, he said. “The status quo as far as business is not going to be adequate for us to grow to where we’ve got that shock absorber when those waves of whatever it’s going to be come to us from the federal government. We don’t know and frankly they don’t know, but I think all learned souls back there will tell you it’s inevitable.” (more…)