Republican and Democratic budget blueprints put in stark relief two very different perspectives on America and what ails her, and on how best to fix things.
On the one hand, we have a belief that a bloated government has created a dependent society. On the other hand, we see a portrait of people struggling to get ahead and a government looking for additional ways to help them.
The facts suggest both perspectives are right. We have created an America where it is harder to get ahead but, paradoxically, easier to do nothing with your life.
Income inequality in the United States has clearly increased over the last several decades. Technological advances and eroding trade barriers have increased the value of highly skilled workers while simultaneously opening up lower-skilled workers to global competition.
This wouldn’t be such a bad thing if all Americans had equal access to the ladder of success. Unfortunately, America’s upward mobility now ranks far below Canada, Germany, France, Australia, Sweden and Norway.
What happened to the “land of opportunity”? The biggest thing separating high earners from low earners is educational attainment. In 2012, full-time workers over the age of 25 with a college degree made 64 percent more annually than full-time workers with a high school diploma.
Yet college is now prohibitively expensive, having increased by three times the rate of inflation over the last 30 years. It’s no wonder a recent McKinsey & Co. study found that 48 percent of high school graduates said they couldn’t afford to pursue higher education. So it’s harder to get ahead than any time in our nation’s history.
By the same token, we spend more today on programs for the poor than ever before. These so-called means-tested programs have gone from 1 percent of GDP in 1972 to almost 4 percent in 2012, according to the Congressional Budget Office.
Health care spending alone (primarily Medicaid) has gone from less than .5 percent of GDP in 1972 to almost 2 percent in 2012. And there has been a startling growth in the number of Americans using these programs.
Social Security disability applications have risen more than 140 percent in the last 15 years, and more than 9 million Americans now receive Social Security disability payments. The cumulative effect of all these well-intentioned programs has created a more dependent America.
So, if both portraits of America are correct, can’t we just split the difference and end up at the right place? The short answer is “no.” Borrowing a slogan from President Obama’s last campaign, we need to “cut and invest.”
What we cut and how we invest, however, won’t be found exclusively in either the Democratic or Republican budget playbooks.
Democrats seem intent on raising taxes on wealthier Americans, as if the answer to income inequality is to make wealthier Americans poorer. And they propose investing in roads and infrastructure with very few actual cuts. This is not necessarily a recipe for helping Americans get ahead or addressing Washington’s spending problem.
Republicans want to focus on spending cuts. They seem to have taken a page from my father’s playbook, throwing the poor into the deep end of the pool to teach them to swim. Republicans seem to think that it’s OK to ignore the economic realities that have left poorer Americans with fewer real options.
If we want to have any hope of building a better America, Republicans and Democrats need to acknowledge this partisan paradox. We need to make real investments in people and pay for them by reducing the entitlement state.
Doing so would free both parties to introduce budgets that are true strategic road maps — not political statements.
Greg Orman is a co-founder of the Common Sense Coalition, a nonpartisan organization dedicated to political problem-solving.
