Dead Men Ruling: How to Restore Fiscal Freedom and Rescue Our Future

by C. Eugene Steuerle

The news coming out of Washington, D.C., and reverberating around the nation increasingly sounds like a broken low or zero growth in employment, inadequate funds to pay future Social Security and Medicare obligations, declining rates of investment, cuts in funding for education and children's programs, arbitrary sequesters or cutbacks in good and bad programs alike, underfunded pensions, bankrupt cities, threats not to pay our nation's growing debts, rancorous partisanship, and political parties with no real vision for twenty-first-century government. In Dead Men Ruling , C. Eugene Steuerle argues that these seemingly separable economic and political problems are actually symptoms of a common disease, one unique to our time. Unless that disease and the history of how it spread over time is understood, Steuerle says, it is easy for politicians and voters alike to fall prey to believing in simple but ineffective nostrums, hoping that a cure lies merely in switching political parties or reducing the deficit or protecting and expanding our favorite program. Despite the despairing claims of many, Steuerle points out that we no more live in an age of austerity than did Americans at the turn into the twentieth century with the demise of the frontier. Conditions are ripe to advance opportunity in ways never before possible, including doing for children and the young in this century what the twentieth did for senior citizens, yet without abandoning those earlier gains. Recognizing this extraordinary but checked potential is also the secret to breaking the political logjam that—as Steuerle points out—was created largely by now dead (or retired) men.

Genres: Politics

200 pages, Paperback

First published March 31, 2014

Reviews

[Bruce Lesley · Rating 4 out of 5]

Gridlock in Congress is precluding our nation from addressing important problems. And, when you give up on the idea of attempting to "legislate," one result is that, legislative ideas, proposals and debate are less frequent. According to Derek Willis of the New York Times:

"This House is on track to produce the lowest number of legislative proposals since the Clinton administration. Through mid-May, representatives introduced 18 percent fewer bills compared with the same point in the previous Congress...The number [of lawmakers] who have produced five or fewer pieces of legislation has jumped 81 percent.
But it gets worse. On the matter of our nation's fiscal crisis and budget deficits, Eugene Steuerle of the Urban Institute does a masterful job of diagnosing the disease in his newly released book entitled Dead Men Ruling: How to Restore Fiscal Freedom and Rescue Our Future. Fortunately, unlike others that simply highlight the problem, Steuerle also points toward a pathway to move our nation forward."

On the issue of our growing national debt, Steuerle makes a strong case as to how presidents and legislators in Congress have conspired on a bipartisan basis in the past to enact a series of spending programs and tax cuts that, in conjunction with the most recent recession, have left the nation with a crushing debt and imposed a fiscal straightjacket that precludes efforts to address current and future problems, particularly for children.

According to Steuerle, in the forthcoming decade, with past legislative decisions that have protected Social Security and Medicare from any budget constraints and continuing efforts to enact tax cuts without budgetary offsets, the pressure to reduce spending falls most heavily "on the very types of programs on which children rely -- domestic discretionary programs such as education that do not grow automatically."

As a result, based on recent budget projections, Steuerle finds that:

"Children's programs will be among those hit the hardest. Children's spending will fall sharply as a share of the economy, from 2.2 percent of GDP in 2012 to 1.8 percent in 2023, pushing spending on children below pre-recession levels. In 2017, Washington will start spending more on interest payments than children."

If we can agree on one thing on a bipartisan basis, it would seem that both parties can at least acknowledge that we reached a place of clearly misplaced priorities if we will soon be spending more money on interest payments on the federal debt than investing in our children.

At a recent commencement speech at Mount Holyoke College, Deborah Bial, Founder and President of Posse Foundation, was talking about issues such as climate change and the potential consequences it will place on the next generation. Her comments to Holyoke graduates apply perfectly well here as well. As she said, "The difficult truth is that I belong to a generation that has fundamentally failed you. It's kind of like we are handing you the keys to a car we've completely wrecked and advising you on how best to care for it."

As Steuerle concludes:

"In essence, we have codified into the law the following rule for the young; they owe us every more when they become adults, and we owe them ever less while they remain children. . .They deserve better."

We must change course for our children but also for our nation's future. As Ruby Takanishi with the New America Foundation points out, the book makes an important and "compelling case that a nation that does not invest in its children is a nation in decline."

Fortunately, Steuerle identifies a pathway forward. He point to the fact that the Congressional Budget Office (CBO) projects that a decade or so of economic growth will generate about $1 trillion more each year in federal resources. While some of that will need to be dedicated to cutting the deficit, paying off interest on the debt, paying for obligations such as Social Security, Medicare, Medicaid and paying for an array of tax cuts, the fact is that, "to govern is to choose."

What is needed is a new vision of what is possible -- rather than the current Capitol Hill capitulation to gridlock. According to Steuerle:

"With the world, the nation, the economy and society changing at an ever-swifter pace, we have a budget not for a nation that is preparing for its future but rather one that is nostalgic for its past, a budget not for an ever-rising nation but for a declining one."

To address this crisis, Steuerle proposes a series of solutions that those concerned about our nation's children or our nation's future should think about and consider. For example, he proposes that federal budgets "display all sources of federal spending growth together, whether deriving from automatically growing programs or new legislation." This, he argues, will help highlight how the president and Congress set priorities overall when, "at least implicitly, those choose to allow older priorities to overwhelm emerging needs."

Transparency helps but we also need a change in direction. Consequently, rather than allowing investments in children or other priorities to continue to dwindle, Steuerle highlights other suggested structural and system changes that will allow us to pursue a new vision that includes such things as investments to combat child poverty, child abuse and neglect, infant mortality and childhood obesity. And, as he adds:

"By shifting the budget toward investment in education, early childhood development and other priorities set by evidence of high potential impact, we would promote growth for both the nation and its people over the long term. Think of the twenty-first century as doing for the young what the twentieth did for the elderly, only with a focus this time on opportunity and potential...."

[Jim Robles · Rating 4 out of 5]

The issue as Mr. Steuerle sees it is that we have destroyed our ability to manage budgets, through each parties attempt to "control" the future. The Left has succeeded in locking in increases in entitlements. The Right has succeeded in locking in tax cuts. The opportunity to do anything "discretionary" is crowed out forever, unless we change something.

p. 125. In a recession, in which national income falls, the disparity between protected and unprotected classes of Americans only grows.

Baby Boomers have taken care of our retirement. Anything that will not be a problem until after we are gone, is a non-issue.

There is a brief mention of gerrymandering (p. 115), but the author does not see it as a significant part of the problem.

The seventy-sixth book I have finished this year.

President Nixon, still the greatest Liberal President of the twentieth century, made a huge mistake when he went along with tying Social Security increases to (never mind that it was the wrong rate) to the rate of inflation. Prior to that Congress had to choose among priorities (see p. 4) when deciding if, and how much, to increase Social Security benefits. Now it is automatic: not longer a choice. As a result spending on children (we transfer funds from those with a higher poverty rate to those with a lower poverty rate), infrastructure, research, etc. are crowded out. This is my example of a "dead man ruling."

The p. 7, Figure 1.1. "Steuerle-Roeper Fiscal Democracy Index" is a wonderfully graphic illustration of how we increasing let however well-intentioned past decisions eliminate our ability to make choices today.

The p. 10 assertion that "Both sides have largely achieved their central policy goals - liberals have expanded social welfare programs, conservatives have delivered lower taxes," is far to generous assessment of what liberals have accomplished. Social welfare programs for the elderly have been expanded, and continue to expand, as spending on the young and less well-off continues to contract. George Will got exactly right when he said on TV - I do not have the reference - that (paraphrasing) "we do have a national consensus. We are going to have expansive entitlements for Baby Boomers and a strong defense, and we are not going to pay for it." Investments in children and/or the future do not fit within the priorities of the most entitled generation ever.

p. 15. . . . a continued peace dividend from the end of the Cold War, . . .

p. 29. Even the boldest attempts by deficit reduction commissions, such as President Obama's "Simpson-Bowles" Commission, typically aim for bare fiscal sustainability ans still eave all or almost all revenues committed by the actions of dead and past legislators.

The title of chapter 3 is "From Whence It Came." Lamentably that is an arrant solecism. I do not mind if you wish to use a more erudite sounding word ("whence" instead of "where"), but please use it correctly and do not contribute to the destruction of its distinct meaning. Since "whence" means "from where," "from whence" means "from from where." That folks is illiterate.

p. 128. power.

p. 130. Or take the more subtle case of delaying Social security reform. Spending already exceeds taxes collected, and the gap grows each year.

p. 136. The impossible goal of reaching the standard also helped rouse the opposition of good and bad teachers alike.

p. 146. Single Payer.