Imagine the America your grandchildren will inherit if the Republican deficit reduction proposals are fully implemented.  If, as they suggest, the deficit is eliminated solely through budget cuts, I imagine my grandchildren living with the following scenarios.

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The United States of America in 2025

Healthcare: For people with means, America in 2025 offers the very best healthcare in the world. Concierge doctors are at their beck and call, hospitals provide lavish suites, and the waiting list for transplants is short. Elective surgery and rehabilitation centers are theirs for the asking. For the rich elderly, there are luxurious life care centers that offer services ranging from independent living to skilled nursing care.

For middle and lower income people, however, access to anything but maintenance care is severely limited. Most employers no longer provide health insurance and many families are paying more than a third of their income for coverage that carries high deductibles.

Emergency rooms require an insurance card, and proof of ability to pay deductibles, before anything beyond triage and stabilization is given. Elective surgery, transplants and disease management (for conditions such as diabetes) are simply off the table as options.

Public health services and clinics are nearly non-existent, Medicaid offers only catastrophic care to the poor, and Medicare premiums and co-pays put the program beyond the financial means of middle class elderly Americans.

In other words, healthcare is rationed on the basis of income level. Many Americans live with chronic pain and disability because they can’t afford the services that would ease their burdens. Family members are the only option for providing long-term care and comfort.

Education: The high-quality public education system, once the shiniest of jewels in America’s crown, has dramatically deteriorated because the tax base has eroded and public funding cut back. The 2025 public schools, from kindergarten through high school, have become holding tanks to prepare young people for menial labor jobs.

The goal of public education is to teach enough reading and arithmetic so that graduates can be funneled into the low-wage jobs that business covets (the minimum wage was reduced to $5 per hour in the last session of the Congress).

Some in the middle class can afford charter schools, religious schools and home schooling. Their children will be prepared to take skilled jobs that offer enough pay so that, with both parents working, the family can scrape by.  College is a possibility for only the select few with the academic or athletic credentials to earn a scholarship because federal loan, grant and aid programs have been eliminated.

Day care is affordable to the middle class in 2025, but it is only babysitting in a crowded room. Staff /child ratios have been reduced dramatically by most state legislatures, so education and supervised playtime are not available to middle class and poor children.

Early childhood education is now totally private and open only to the children of the wealthy. These children go on to attend private schools that charge upwards of $25,000 per year. Their parents can afford to send them to the best of colleges, and then on to graduate schools. There is no limit to the salaries that they can make (much of it on the backs of those $5 per hour employees).

Housing: Housing in 2025 America is segregated by income. The rich live behind high walls in gated communities. Their private security guards have full police powers within the boundaries of the community, and response time in case of emergency ranges from a few seconds to a few minutes. Many of these enclaves also have their own private fire departments and emergency medical units.

Middle class housing is mostly rental because banks no longer offer home loans to families with less than a $200,000 annual income. As a result, large corporations that profit from rental fees now own most of the nation’s housing stock.  A home lease is usually for one year, but landlords often write in provisions that enable them to give renters a 60-day notice to vacate.

Government subsidy for public housing has disappeared, and most of the projects have been sold to private businesses. A two-income, minimum wage family can afford a two-bedroom unit, but they are responsible for all maintenance. The very poor live in welfare camps and homeless shelters. A lien is placed on them so that if they find employment the businesses operating the camps and shelters can recoup their costs.

Some large businesses have adopted the idea of building and operating housing units for employees within the confines of their property. Rents are deducted from paychecks at an amount that ensures a profit to the corporation. This is a throwback to the days of mining towns that were built and governed by the companies… and memorialized in the words of a great song: “I owe my soul to the company store”.

Environment and safety: By 2025, the Environmental Protection Agency, the Food and Drug Administration, the Office of Workers Compensation Program, and the Occupational Safety and Health Administration had been abolished. Their budgets were blocked together, cut by 30% and (along with their former duties) awarded to state governments with no requirement for maintaining previous programs.  In most cases, states have established governing boards that are made up of business leaders. These boards set and monitor environmental, health, work place and safety standards.

Congressional legislation also mandated that every bill coming before the House or Senate be evaluated in terms of cost to business. Any cost exceeding the ceiling of $100,000 sends the bill to a special committee where it can be re-worked, passed out, or held indefinitely. The legislation also requires that executive branch regulations be similarly evaluated and any requirement that adds costs to business or to land owners would have to be approved by Congress. It was under this provision that day care staff/child ratios were eliminated.

Other actions by Congress abolished the government’s right to designate wilderness areas, add to the protected species list, and limit mining and oil exploration without a two-thirds majority vote by both the House and the Senate.

The same majority is required for any tax increase or elimination of a corporate tax subsidy. Of course, unlimited amounts of revenue earned by American businesses overseas can now be repatriated in the United States with a tax rate of 10%.

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Hard to Imagine?

Are such scenarios hard to imagine? Not if you listen carefully to what the Republicans are saying during the deficit reduction discussions in Washington. Mitch McConnell, their leader in the Senate, said… “It is time for Washington to take the hit, not the taxpayers.”  Translated, that means revenue increases are off the table and the entire three-plus trillion of deficit reduction must come out of the federal government budget.

This pronouncement is disingenuous. Who are the stakeholders in what McConnell refers to as “Washington”? American citizens, the taxpayers, are the stakeholders.

Who takes the hit in the McConnell plan? Not the men and women in Congress, even though they created the crisis by increasing spending (on wars and unfunded programs) while reducing taxes for their wealthy supporters. Rather, middle and low-income Americans, the unemployed, the elderly poor and children take the “hit”.

A Destructive Agenda

A study of the Republican budget plans and their rhetoric leaves the inescapable conclusion that theirs is a destructive attempt to divide people from their government.

They seek to create an attitude among the electorate (essentially using lies, distortions and scare tactics) that opens the political door to a basic reform of our government, a reform designed to undo America’s social contract with her people.  Abraham Lincoln’s vision of a government that is “of the people, by the people, for the people” has been changed to of, by and for corporations.

It is a fact that the deficit cannot be curtailed without devastating the government services that many Americans depend on for survival… unless, tax benefits available to the wealthy few (hedge fund operators, and those who prosper with dividends and capitol gains) are equitably taxed; the Bush tax cuts for the wealthy are allowed to expire; and tax loopholes for corporations and the rich are eliminated. Among those loopholes, yachts are now counted as “homes” and interest on them is deductable; and private jets are subsidized by designated tax write-offs.

There is no disputing the fact that, in order to reduce the deficit to a manageable level, programs will have to be cut and entitlements dealt with. Options for doing this are discussed in other posts on this blog.

Achieving fiscal integrity will require a balanced approach of increasing revenue and decreasing the budget. And such a balanced approach could set a cap on discretionary spending; establish multi-year targets for deficit reduction; and protect the safety net for our most vulnerable citizens. Any cuts should be phased in so that the economic recovery is not be endangered.

What is the Real Republican Goal?

If deficit reduction is the goal, it can be accomplished. But I do not believe that the Republican goal is cutting the deficit; rather, it is a radical revision of what government does and whom it serves.

Robert Reich stressed this point in his July 3 column in the San Francisco Chronicle: “Republicans are divided between those who want to bring the deficit down and those who want to shrink the government.”

Reich pointed out that Republicans in the House rejected the idea of closing tax loopholes (even though helpful for trimming the deficit) because that “does not shrink government”.

Katrina vanden Heuvel editorialized in The Nation that “the Republican Party is addled by an extremist ideology and cankered by vengeful partisanship. In time of national crisis it is locked into an ideological litmus test— no new taxes— and opposed to anything the ‘Kenyan socialist President’ might propose”

It is true that both of the above come from the liberal side of the argument. The Economist magazine, however, is balanced but conservative on issues of business, government and taxation.

Its position on the American budget-balancing struggle is that  “to non-partisans the idea of taming the deficit by spending cuts alone flies against both common sense and arithmetic. America’s tax take is not high either by international or its own historical standards. One commission after another has advocated mixing spending reductions and revenue increases.”

The Economist also weighed in on the issue of raising the debt ceiling: “On the face of it, the most powerful country on the planet, having only just recovered from a self-inflicted financial calamity of epic proportions, is marching toward another self-inflicted financial calamity of epic proportions. Unless Democrats and Republicans close differences on taxes and spending, and Congress votes to increase the federal debt ceiling, the United States may default on its debt, an eventuality with incalculable consequences for the world economy as well as America’s.”

Real vs. Imagined Deficit

There is no question the task is difficult, and made even more difficult by the political rhetoric over the years that has led voters to believe that  (in the words of The New York Times business writer David Leonhardt) the deficit is “caused by waste, fraud, abuse, foreign aid, oil industry subsidies and vague out-of-control spending.”

The real deficit, Leonhardt wrote, is “caused by the world’s highest health costs (by far), the world’s largest military (by far), a Social Security program built when most people died by 70— and to pay for it all, the lowest tax rates in decades.

“The deficit we imagine comes largely from discretionary spending.  The one we have comes partly from discretionary spending but mostly from everything else: tax rates, Medicare, Medicaid, and Social Security.”

If deficit reduction is truly the goal, we must forget about the imagined deficit and deal with the real causes. Otherwise, the imagined scenario at the beginning of the article will become real.