By Christopher Paslay
Randi Weingarten’s latest message to AFT members avoids dealing with America’s harsh fiscal reality.
During Arlene Ackerman’s tenure—from July of 2008 to July of 2011—the Philadelphia School District spent nearly $10 billion. As hundreds of millions of dollars in federal stimulus were going God knows where, those in the Philadelphia education community with a shred of common sense knew that when the money dried up, the School District was in big trouble. Instead of practicing austerity by prioritizing needs, Ackerman and her crew spent, spent, spent—which eventually led to the biggest budget deficit in Philadelphia School District history—a hole over $700 million deep (a hole that the District is still borrowing to climb out of).
What many in the Philadelphia education community may not realize, however, is that the financial woes of the School District are small potatoes compared to what is brewing at the core of the Budget of the United States Government. Sure, most are aware there is a budget deficit as well as a growing national debt, but most don’t realize just how drastic the situation is and few comprehend the actual compromises that will be needed to begin to stabilize the situation.
AFT President Randi Weingarten’s latest article in American Teacher Magazine is a case in point. Headlined, “We need a fiscal plan that safeguards priorities,” the piece calls for union members across the country to send a message to Congress to find a “fair-and-balanced” deficit-reduction plan that would stop America from going off the fiscal cliff; if Congress doesn’t reach an agreement by the end of the year, the Bush tax cuts will expire and devastating across-the-board cuts will go into effect. Weingarten writes:
That’s why the AFT has called upon members from across the country to tell Congress to work together and agree on a fair and balanced deficit-reduction plan that safeguards vital priorities and includes revenue increases, such as requiring corporations and the richest 2 percent of Americans to pay their fair share of taxes. This would provide needed revenues to ensure essential programs like Social Security, Medicare, Medicaid, and aid to states and localities for public education will not be slashed.
For the record, I agree with Weingarten. Vital public education programs need funding (such as Title I grants and Head Start), and Social Security, Medicare and Medicaid need funds as well. Here’s the problem with Weingarten’s message, however: 1—it’s based on a fantasy; and 2—it’s dangerously vague.
First, the fantasy part. Raising taxes on the richest 2 percent by allowing the Bush tax cuts to end for those making over $250,000 a year (their tax rate would go from 35 percent to 39.6 percent) would only generate a measly $70 billion a year. This may seem like a lot of money until you realize that the U.S. government spends more than $10 billion a day. Loose translation: this is only enough money to run the government for seven days.
When Weingarten states that making the rich pay more “would provide needed revenues to ensure essential programs like Social Security, Medicare, Medicaid, and aid to states and localities for public education will not be slashed,” she is simply purporting an economic myth; Medicare and Medicaid together cost $1 trillion annually. This is not to say that the taxes of the very rich shouldn’t go from 35 percent to 39.6 percent, as President Obama wants. But the idea that simply taxing the rich is going to save public education and health care is ridiculous (and dangerous—but I’ll get to that part in a moment).
Raising taxes on the rich is only a drop in the bucket; the fiscal crisis cannot be remedied without very real spending cuts. There is this fantastic idea harbored by idealistic education advocates that the U.S. is the land of plenty, one of the richest nations on earth, and that there is more than enough money to go around—if only we could get those greedy wealthy corporate types and the like to pay their fair share. This isn’t exactly true, either. Consider these facts using 2009 data from the IRS:
- 8,274 people filed tax returns with incomes over $10 million, which totaled $240.1 billion in income. If the government took 100 percent of their money—not the 39.6 percent that the President wants—it would only cover 24 days of federal spending.
- 236,883 people filed tax returns with incomes over $1 million, which totaled $726.91 billion in income. If the government took 100 percent of their money, it would only cover 72 days of federal spending.
- 3,924,490 people filed tax returns with incomes over $200K, which totaled $1.964 trillion in income. If the government took 100 percent of their money, it would only cover about six months of federal spending.
- 17,446,537 people filed tax returns with incomes over $100,000, which totaled $3.765 trillion in income. If the government took 100 percent of their money, they would still be $30 billion short of 2012 spending, which comes in at $3.796 trillion.
The notion that simply making the rich “pay their fair share” will save Title I grants, Head Start, Social Security, Medicare and Medicaid is, as I mentioned earlier, pure fantasy. The reality of the situation is that things will need to be cut (think of the past two years in the Philadelphia School District for those who still don’t get the picture). Loose translation: crazy spending eventually catches up with you.
Which brings me to my second point: Weingarten’s message to AFT members is dangerously vague. Vague in terms of specifics on what the AFT is willing to compromise. Yes, I said the forbidden word: compromise. I know what old school union folk are thinking: Off with his head! But it doesn’t matter whether I say the word or not, because it’s coming and there’s nothing that can be done about it. Whether the rich pay more or not, real spending cuts are coming. The only question is when.
If the president gets his way and Congress agrees to once again raise the debt ceiling (maybe to 18.5 trillion), then the big cuts won’t happen for another few years. They’ll probably (and conveniently) happen after 2016, but when they do, look out (think the Philadelphia School District fiscal crisis on a grand scale). Which is why the AFT should be bracing now for the coming craziness. Weingarten should be honest with AFT members: Taxing the rich sounds great and makes us feel good, but it’s not going to save us. What are our priorities, our real priorities? What do we absolutely need, and what are we willing to negotiate? We can’t pretend this away anymore. Here are the numbers, and here is the situation.
The AFT (as well as President Obama) should start seriously figuring out what’s going on the chopping block so all of us can honestly start preparing for the inevitable.
As writers say in the world of books when a publisher demands that words be cut from a manuscript in order to make space: Better that I do the surgery myself than let some crazy editor decide.