Apr 09 2014

Spending on waste or investment?

Published by at 7:54 am under Trahant

trahant MARK
TRAHANT

 
Austerity

All you need to know about the November election is found in dueling documents: Paul Ryan’s budget and the House Democratic alternative. One is down, the other up. One “cuts wasteful spending,” while the other proposes investing in the future. Two radically different approaches to governing.

The Republican plan is in a hurry to balance the budget — slashing federal agency spending so that in a decade from now the budget will be balanced. These cuts would impact low-income populations, such as American Indians and Alaska Natives. Deeply.

And the Democrats’ budget is smart in the short-term — we do need investment now — but it fails to account for spending over a longer time frame. It leaves the answers to some big questions for a later date.

Then, truth be told, neither plan is designed for the long haul.

The United States (and much of the globe for that matter) is facing a demographic imbalance of a rising number of older people. Every day, for the next twenty years, some 10,000 people are turning 65. Think about adding that many people every day added to the rolls of Social Security and Medicare.

The good news is that Social Security is the easiest to fix, adjusting age and benefits, could make the plan solvent for the next generation.

But Medicare is wrapped in a bigger problem: the cost of health care in America.

A graphic from the Congressional Budget Office explains this well by breaking federal spending into four distinct categories: Social Security (growing); Interest on the debt (growing); all other federal spending (shrinking dramatically) and health care (growing faster than everything else). Or, as the CBO describes the problem, “Federal spending for the major health care programs and Social Security would increase to a total of 14 percent of GDP by 2038, twice the 7 percent average of the past 40 years.”

So if net interest is growing — and there is not a damn thing that can stop that from occurring — and Social Security and health care are growing, then the only budget category that remains is everything else. It’s that area of the budget where most programs serving American Indians and Alaska Natives are funded.

House Democrats said Ryan’s last budget — similar in nature to this one — would have reduced spending for the Bureau of Indian Affairs by $375 million and the Indian Health Service by $637 million. However Rep. Tom Cole, R-Oklahoma, and a leader in the House, told Indian Country Today Media Network that the House Democrats assessment was wrong. “This idea that a Ryan budget means cuts in Indian programs is simply not true. We have evidence that while it lowers overall government spending, it also allows us to re-prioritize where the money goes.”

That does sound nice. But if you look at the total package of spending, then Indian-related programs would be hit hard in a Ryan budget.

Just consider Medicaid. This is a part of the Indian health budget that is increasing, but Ryan’s budget calls for $2.7 trillion in cuts to Medicaid and subsidies to help low- and moderate-income people buy private insurance. What’s more, the Ryan plan shifts Medicaid spending into state block grants making it even less accessible to tribal programs.

The Democrats, on the other hand, support an increase in Medicaid spending, encouraging states to expand eligibility. “Our budget preserves non-defense discretionary spending, the category of funding that supports biomedical research at NIH, primary care services provided at community health centers, mental health and substance abuse services at SAMSHA, comprehensive health care provided by the Indian Health Service, and other vital public health programs,” the Democratic plan says. “In contrast, the Republican budget cuts this category of funding by more than twice as much as it would be cut if the sequester went into effect and stayed in effect for 10 years.”

These dueling budgets, these different approaches to governing, are the framework for the November elections. The only problem is that those who want budgets cut dramatically, the Tea Party folks, will turn out and vote. Will the same be true for those who want dollars invested in young people and a growing future? History says no.

Mark Trahant is the 20th Atwood Chair at the University of Alaska Anchorage. He is a journalist, speaker and Twitter poet and is a member of The Shoshone-Bannock Tribes. Comment on Facebook at: https://www.facebook.com/TrahantReports

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