[lbo-talk] intra-class contradictions

Ian Murray seamus2001 at attbi.com
Sun May 11 22:12:05 PDT 2003


washingtonpost.com Call to Inaction By Fred Hiatt Monday, May 12, 2003; Page A19

Last week the Business Roundtable, an organization of CEOs of 150 leading American corporations, issued a clarion call for early childhood education for 3- and 4-year-olds, so that every child will enter kindergarten ready to learn.

How enlightened.

The titans of industry hit on almost every key point: the research demonstrating the importance of early intervention; the tragedy of poor children who start kindergarten behind and then fall farther behind; the economic return of $4 to $7 for every dollar spent on high-quality programs for low-income children.

But that testimonial to the wisdom of early investment was just about the only reference to dollars in the Roundtable's "call to action," which was issued in concert with Corporate Voices for Working Families. They made no mention of how much it might cost to guarantee high-quality preschool for all children -- nor of where such funds might come from.

Click over to the Roundtable Web site and you get some clue as to why. When not touting their social responsibility, the chief executives are busy lobbying for the full Bush tax cut. At a time when only one out of seven children eligible for federal child-care assistance actually receives it (according to the Children's Defense Fund), the chief executives are working to diminish further the government's ability to help.

Now, there's nothing new about businesses lobbying simultaneously for pork-barrel subsidies and tax cuts that would reduce the funds available for such pork. The U.S. Chamber of Commerce alternates between demanding the cutting or abolition of various taxes (on estates, on corporate income, or corporate dividends, etc.) and demanding more federal contracts (for highway builders, for satellite launchers, for the nuclear industry, etc.).

But somehow it's more galling when it's not just a matter of greed or self-interest -- when the chief executives claim to speak for the social good while still grabbing for a smaller tax bill.

Officials at the Roundtable said they saw no contradiction between their support for what could amount to a major new entitlement and their backing of President Bush's tax cuts. "We do care very much about the deficit," one said, "but we feel very strongly that if we don't get the economy moving now, we'll continue to have severe unemployment."

Fair enough. But Bush's tax cuts, both of 2001 and those proposed for this year, aren't mostly about moving the economy now. They would, for years and even decades, sharply reduce the government's ability to cope with existing challenges -- Social Security, Medicare, defense -- let alone take on new ones, as the chief executives surely understand.

How sharply? The administration's 2001 tax cuts alone would, in their second decade, cost the Treasury $4 trillion. Over time, those tax cuts and the new ones proposed this year would, according to a recent estimate by the Center on Budget and Policy Priorities, reduce the government's revenue by 2.3 percent to 2.7 percent of the gross domestic product (GDP). That may not sound like much, but last year all of the individual and corporate income taxes collected by the federal government amounted to less than 10 percent of GDP. Even the most optimistic estimates of economic growth stimulated by the tax cuts acknowledge that revenue will be less than it otherwise would.

Meanwhile, in the here and now, child care for poor people, already totally inadequate, is being further cut. States, where the Roundtable says the primary burden lies, cut their spending on child care by 0.4 percent last year; the Children's Defense Fund says a further cut of 0.9 percent is projected for this year. "Thirty-eight states cut spending in 2002, are projected to cut spending in 2003, or both," says the CDF. Maryland this year cut its child-care funding by $33 million.

No problem, say the CEOs; let's plan for a ramping-up of early-childhood education when the economy improves. But if they get their way on tax policy, the money won't be there even then.

Now, maybe we shouldn't be so hard on the empty "call to action." Maybe it helps for respected business executives to focus attention on this important issue, even if they duck the hardest question.

Moreover, there's an honorable conservative argument in favor of smaller government -- an argument that fewer taxes will mean a more vibrant economy, which is worth the cost of fewer social services.

But you can't make that argument and also advocate a larger government role in society -- not with any honesty, that is. We all understand why politicians do it anyway -- why so many of them can't seem to acknowledge that public goods cost public money. You'd think CEOs might be more embarrassed to play that politicians' game.

e-mail: fredhiatt at washpost.com



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