The Essential Paul Simon: Timeless Lessons for Today's Politics

5. The Budget and the Deficit

196 5 The Budget and the Deficit Editor’s Note It seems that everywhere we look today there are articles and news reports about the federal budget and the deficit and competing plans for how to handle them. Public opinion polls consistently show that these problems, along with the economy in general, are at the top of the list of the American people’s concerns about the future. We went for years in this country with the deficit barely being noticed on the national agenda, and now it is the dominant headline. Governmental shutdown and threatened defaults on our national debt are now openly considered and debated. The two major parties could not be more polarized on the fundamental understanding of the issue and what to do about it. The Democrats insist that some revenue increases are required. They tend to focus the need for additional revenue on the Bush era tax cuts and advocate repealing those tax cuts for the wealthy and returning to the Clinton era tax rates as a way to address the deficit. They point to that period as a halcyon economic era that was achieved under a higher tax rate than that which obtained when the recession of 2008–9 began. The Republicans are just as adamant about the need for spending reductions, and they have offered a whole range of cuts in the federal budget’s discretionary spending that would hit virtually all Americans directly in the pocketbook. Harkening back to the supply-side economics theories of the Reagan era, the Republicans claim that budget and tax cuts will actually increase governmental revenue in the long run as the economy expands and Editor’s Note 197 creates jobs, despite the fact that the deficit grew dramatically under Reagan and both Bush administrations. The public is deeply divided, siding with the Democrats on the need for increased revenue from the wealthy and siding with the Republicans on the need for reductions in discretionary spending . However, when it comes to reductions in programs and expenditures they benefit from and support, most voters are opposed, and they clearly want to have their cake and have someone else pay for it. The debate goes on continuously. Concerns over the budget deficit in the state of Illinois are no less prevalent . Illinois faced a structural deficit for the entire first decade of the twentyfirst century, and then that deficit became intolerable when the 2008–09 recession took a drastic toll on state income while the increased need for governmental services for the newly unemployed significantly expanded state expenditures. Illinois simply had more programs and personnel than citizens were willing to pay for in that era. One of the most egregious problems stemmed from the Illinois pension system for public employees, which has been identified as one of the most underfunded pension systems in the nation. Predictions about its ultimate insolvency are endemic. Despite a state law requiring an adequate level of annual funding and a requirement in the Illinois Constitution adopted in 1970 guaranteeing pension rights as a contractual obligation of the state, successive legislatures refused to make the state’s part of the pension payment and borrowed consistently from those funds to meet current obligations. After years of neglect and abuse, in 2011 the Illinois General Assembly and the governor finally turned their attention to the state’s budget problems and what had to be done to correct them. As in the case of the national government, the solutions required a combination of increased revenues and decreased spending, painful for all concerned. The debate over how to recognize that reality has been raucous and divisive. If any of the major players at the national or state levels had been paying attention, they would have found that Paul Simon had been warning for a political generation that these days of reckoning would come. Anyone who read Simon’s columns over the years would have been very familiar with his theme insisting that the nation was on an unsustainable course in its reliance on borrowed money to meet current obligations. As was noted earlier, Simon was a chief proponent of the Balanced Budget Amendment proposal, which he championed long before it was at all popular or had many mainstream advocates. It was an unusually courageous and prescient position for an officeholder who was essentially a liberal Democrat in most of his views. 198 The Budget and the Deficit...