Voters Should Ask Their Candidates
|
Ten Questions Voters Should Ask Their Candidates |
| The Concord Coalition Citizens Council | February 1996 |
During the upcoming election frenzy, House, Senate and presidential candidates will try to appear before as many voters as possible. Naturally, candidates who are seeking your support will be tempted to tell you what they think you want to hear, rather than what you need to hear. They will be tempted to gloss over tough issues, minimize problems and offer attractive-sounding solutions. They hope you won't ask tough questions that force them to address hard choices. They might try to get by with glib, well-rehearsed 15-second sound bites instead of giving detailed, specific answers that put issues clearly out on the table.
The Concord Coalition Citizens Council, a non-partisan grass roots citizens organization, believes that eliminating huge, uncontrollable federal deficits is something that our politicians simply must do, and quickly. Since its beginning, The Concord Coalition Citizens Council has learned that most voters know a lot more about spending and taxes than their elected leaders think they do and that most voters are a lot more willing to make tough choices than their politicians are.
The upcoming political campaigns are the ideal time to question the people who want to represent us in Washington. Well-informed voters can use these exchanges to find out where candidates really stand on some of the hardest choices that face our nation, or whether they have even thought about these difficult issues at all. The give-and-take between you and those who want to represent you can help to educate candidates about what their constituents really want elected officials who will face problems squarely and begin to deal with them.
Below are some questions that every candidate, from every political party, should be asked. Questions should be short. A long question only invites a long and, too often, fuzzy answer. Questions asked in a reasonable, moderate tone tend to get thoughtful responses; don t scold, lecture or berate the candidate when you phrase your question. If you don t get a straight answer, don't just nod politely. Follow up whenever possible. It's just as important for you to let candidates know how you feel about these issues as it is for you to hear their responses. That's the only way to make sure candidates who win will be ready to tackle the tough problems when they get to Washington.
Question 1. Please describe in detail how you would balance the budget, and state whether you have put your detailed plan in writing for the American people to review. Specifically, what changes in spending and/or taxes do you support? If you do not favor a balanced budget, please state why.
Background:
It is not too much to ask of those who seek federal office that they, like The Concord Coalition, put their choices on the line in writing and help to bring about a realistic national debate on our central fiscal dilemma how to balance the budget.
The Concord Coalition Citizens Council, as well as most mainstream economists, understands that our nation s long-term economic well being depends on getting the federal budget into balance and keeping it there except perhaps during times of war or severe recession.
The United States has long been a land of opportunity. Each generation has left an increased endowment for its children. Today, though, needless budget deficits are eroding that tradition, and we run the risk of being the first generation whose children look forward to less, rather than more, than we enjoy.
Balancing the budget and getting control of our fiscal policy is the way to turn this around. Balancing the budget is not the entire answer, of course, but unless this first step is taken, none of our other strategies can work.
But simply calling for a balanced budget is the easy part. Almost everyone is in favor of balancing the budget. It gets more difficult, and less popular, when specifics are put on the table. Unfortunately, there is no other way to do it. At some point, the rhetoric must give way to actual choices.
Candidates who advocate a balanced budget should, therefore, be willing to share with the voters what choices they would make once in office. It is only by this process of public education that a consensus can be reached on a fair, credible, and effective plan to balance the budget.
While there is no one right way to balance the budget, The Concord Coalition Citizens Council believes that each candidate should put his or her plan in writing for the American people to review. Committing to a plan in writing forces each candidate to think about the hard choices and defend them before diverse audiences out on the campaign trail.
One example of a specific plan to balance the budget is The Concord Coalition s Zero Deficit Plan. This plan starts with the premise that everything should be on the table. It then recommends specific changes in current programs that would lead to a balanced budget by 2002. Alternatives are presented that can be substituted for elements in the basic plan, and a worksheet is included to let readers make their own choices.
Question 2. Are there any specific programs or general areas, other than interest payments, that should be off the table in a balanced budget plan?
Background:
The best budget plan is one that calls for shared sacrifice from all except the truly needy.
The Concord Coalition s Zero Deficit Plan shows one credible path for balancing the budget by 2002. This plan touched on every area of the budget, including defense, domestic spending, entitlements, and revenues. Including all categories of the budget meant that no single portion of the budget had to take an especially hard hit.
A balanced budget plan that takes popular, but large programs off the table will have to make up the savings from other areas. The more that is shielded from cuts, the heavier the cuts will be on the remaining programs.
Some people think, mistakenly, that rooting out wasteful spending and fraud will allow us to avoid making tough decisions. Unfortunately, it's not that simple. People disagree about what's wasteful and what s not -- and about how to deal with it. In any event, even eliminating all wasteful programs would not balance the budget.
Question 3. Do you believe that taxes should be cut before the budget is balanced?
Background:
We say, first balance the budget. Then, we can talk about whether we can afford a tax cut.
The Concord Coalition Citizens Council is one of the very few organizations firmly on record against a tax cut while the government continues to run large budget deficits. By proposing large tax cuts in the midst of serious attempts to reduce the deficit and balance the budget, some candidates will open themselves to an obvious challenge: How would their most painful dollar in spending cuts compare to their least necessary dollar in tax cuts?
We have seen many plans that fell apart after a few years, even though they were adopted with the best of intentions. We are particularly skeptical of plans that start with immediate tax cuts but postpone tough spending cuts until after the next election.
Question 4. Reforming the federal income tax system has become an issue. Options include flat or flatter taxes, consumption taxes and income taxes that encourage people to save rather than spend. In light of budget deficits stretching far into the future, what are your views on tax reform?
Background:
Any reforms that are adopted 1) should not reduce revenues compared to the present system, and 2) should encourage savings.
The amount of revenue raised is determined by both the tax base (what is taxed) and the tax rate. The more income left out of the tax base, the higher the tax rate must be to raise the same amount of money as under the present system. Plans that have generous income exclusions (such as for standard and dependent deductions, home mortgage interest and charitable giving and investment income) AND low tax rates simply won't raise enough revenue.
If a plan relies on unprecedented economic growth to raise enough revenues, it should be viewed with special skepticism. Our nation tried that before, and the growth did not materialize. The tax system is only one of many factors affecting growth.
The current income tax system is progressive. People with higher incomes pay a greater percentage of their incomes than people with lower incomes. Currently, those in the top 1% income group receive 14% of total income and pay 29% of all income taxes. People in the top 50% income group receive 85% of total income and pay 95% of all income taxes. People in the bottom 50% income group receive 15% of total income and pay 5% of all income taxes. Many in the lowest income levels are eligible for earned income credits that cancel their income taxes and refund part of their payroll tax. Tax reform plans should be considered in light of how they would change the distribution of tax burden.
Increased savings and investment rates could do as much to spur long-term robust economic growth as a balanced budget. Taxing money that is consumed should, over time, encourage people to save and invest their money. Leading consumption tax proposals include a national retail sales tax, a value added tax (VAT) and the innovative progressive Unlimited Savings Account tax proposed by Senators Domenici and Nunn.
Question 5. What programs affecting this state or district would you be willing to cut in pursuit of a balanced budget?
Background:
Deficit reduction begins at home.
When former Senator Russell Long of Louisiana was Chairman of the Senate Finance Committee he used to say that everyone s favorite formula for raising revenue was, Don t tax you, and don t tax me tax that fellow behind the tree.
The same sentiment seems to prevail in recommending spending cuts. Everyone wants to balance the budget at someone else's expense. Unfortunately, there is no fellow behind the tree. Balancing the budget, and keeping it balanced, will require a careful examination of all federal spending. Those who advocate a balanced budget should be prepared to say what they are willing to give up, because no plan to balance the budget will succeed if it is perceived as favoring a particular region, interest group, or segment of society.
Question 6. Entitlement programs now constitute over half the budget. Three-quarters of this amount is paid to individuals regardless of income or need. Do you believe that a phased-in progressive affluence test is a fair method of holding down the growth of entitlement spending? If not, would you suggest raising payroll or other taxes, or cutting benefits?
Background:
Affluence testing is a good idea whose time has come.
Entitlement program costs are rising rapidly. Automatic cost-of-living increases, growing numbers of beneficiaries, and higher-cost services to which beneficiaries are entitled inflate the entitlement price tag. When the nation promised these benefits and services decades ago, it underestimated how much they would cost. Now, we must face the unpleasant truth that we can no longer afford to keep those promises fully.
In 1994 the Bipartisan Commission on Entitlement and Tax Reform, chaired by Senator Bob Kerrey of Nebraska and former Senator John Danforth of Missouri found that if federal taxes remain at their current level, by 2029 entitlement program costs will be greater than all the revenues collected by the federal government. Obviously, this is an impossible situation. Some corrective course of action must be undertaken. The sooner our nation agrees on the best way to change course, the more gradual and equitable the transition will be. If we wait until the last minute, the changes required will be abrupt, painful, and unfair.
The Concord Coalition Citizens Council believes that reducing entitlement payments to people with mid-level and higher incomes is not only fair but also the only realistic way to get control of the deficit. We make annual payments of more than $81 billion to 6 million citizens in families with incomes over $50,000. We can no longer afford the luxury of payments at that level. We simply don t have the money.
An affluence test, or means test, asks only those who can afford to give up some benefits to do so, while protecting those who need all their benefits. If we continue to pay full benefits to everyone who qualifies, these programs eventually will go bankrupt. So a means test also can help to save important entitlement programs for those who need them. Moreover, the Congressional Budget Office calculates that $50 billion a year can be saved this way.
Under the means test proposed in The Concord Coalition s Zero Deficit Plan, Americans with incomes of more than $40,000 would receive somewhat less than their full benefits, calculated on a sliding scale. The first $10,000 of entitlement benefits that caused families incomes to exceed $40,000 would be reduced by 10 percent, plus an additional 10 percent benefit reduction for each $10,000 above that level. Private income is not affected only government benefits.
For example, Americans with incomes between $40,000 and $50,000 would receive 90 percent of their benefits. Those with incomes between $50,000 and $60,000 would receive 80 percent of their benefits. The means test would progress until it reached families with incomes of $120,000 and above. Those families would receive 15 percent of their benefits, even though they do not need them. This way, even the wealthiest Americans would still receive some personal return on the taxes they had paid.
Question 7. Medicare is said to be going broke. Do you agree? And, if so, what should be done?
Background:
Medicare cannot continue much longer under current formulas. There are no easy answers, but candidates who refuse to discuss their thoughts about how the system should be reformed are dodging the issue.
Medicare has two separate programs. Part A covers hospital expenses and is financed by FICA payroll taxes paid into a trust fund. Part B covers doctor s bills and is financed 31% by Medicare enrollees and 69% by general tax revenues.
Part A costs already exceed the taxes coming into the trust fund, and by 2000 program costs are projected to total $171 billion putting it $33 billion in the red.
Part B is projected to cost almost $115 billion by 2000, with $89 billion of this coming from general revenues.
High as these costs are, they are projected to continue growing at a steep rate. A small part of the current growth is due to more, and older, beneficiaries. But far more of the cost increase is attributable to medical advances. The more intensive medicine becomes and the more conditions that can be treated, the more Medicare costs rise. On the present track, costs soon will be more than workers or beneficiaries can pay. Doing nothing is not an option.
Rather than trimming benefits or raising taxes, many are tempted to look for painless solutions. One favorite suggestion is to cut out waste, fraud and abuse. Easier said than done. Of course, it is important to continue improving the administration of the program to make sure maximum value is received for every dollar spent. But this is not a long-term answer.
Another solution is to try to reorganize the way that medical care is delivered to encourage market competition and consumer price consciousness instead of the current open-ended fee-for-service system which simply reimburses for whatever treatments doctors provide. Some proposals encourage Medicare beneficiaries to sign up with health management organizations (HMO s). Others would offer vouchers so that seniors could purchase private health insurance. And some suggest creation of health savings accounts that would let beneficiaries keep any funds they did not spend. However, some seniors fear that such changes might restrict their ability to use the doctors of their choice or deny their access to treatment.
Others suggest simply enacting a ceiling on what Medicare can spend. If program expenditures exceed the ceiling, reductions would be applied across-the-board. Such a process approach still does not answer the tough question of exactly how costs will be kept beneath the ceiling.
The Concord Coalition has advocated a comprehensive means test or affluence test for all entitlement programs, including Medicare. People in families with annual incomes of more than $40,000 or $50,000 would have to pay more for Medicare health insurance, according to a sliding scale. Concord also advocates charging the same 20 percent co-payment for clinical lab and home health care services as charged for other Medicare services.
Despite the need to control its escalating costs, some people warn against messing with Medicare. They think, wrongly, that this will reassure seniors. However, a great many retirees understand that the existing system is in financial trouble and that their children and grandchildren cannot be expected to pay more than they already are. And the red ink in Medicare is adding to the ocean of government-wide red ink. Something has to be done.
Question 8. When the baby boom generation starts retiring, around 2012 or 2015, the cost of Social Security will soar. Unless changes have been made in this program by then, all the hard work now underway to balance the budget will be washed away in a flood of red ink. Looking down the road 10 to 20 years, how do you think the nation should plan for this situation? What do you think we should be doing now?
Background:
It is irresponsible for candidates to refuse to admit there is a problem. The sooner we address the situation, the more options there will be for dealing with it.
Even though today's retirees paid into Social Security all their working lives, on average they get back their contributions in just a few years. In the future, however, this will change, and today's young workers have little chance of ever recovering their FICA contributions.
Changing demographics namely, the retirement of the baby boom generation will bankrupt the system. There simply won t be enough workers to support all the retirees.
The Concord Coalition Citizens Council favors two specific changes. Together these two changes would put the program on almost a sustainable basis.
First, the eligibility age for full retirement benefits, which is already scheduled to rise to age 67, should be gradually increased to age 68. (Reduced benefits starting at age 62 would continue to be available.)
Concord also favors a sliding scale entitlement means test or affluence test starting with people in families with annual incomes of more than $40,000 or $50,000.
The idea of building up mandatory individual retirement savings accounts instead of paying into Social Security has great appeal and has worked successfully in Chile and a few other nations. However, the transition from the old system to a new one would be difficult, and perhaps politically impossible. Unless we simply write off today's retirees, which no one is suggesting, several generations will be called on to pay for both their elders retirement and to save for their own retirement.
Concord emphasizes the importance of acting sooner, rather than later, to address the shortfall in the Social Security program. The longer decisions are delayed, the narrower and more painful the options become.
Question 9. In 1985 the Gramm-Rudman-Hollings law was supposed to balance the budget by 1991. Instead, we ran a deficit in 1991 of $269 billion. How do you think a balanced budget plan could best be enforced? How would you prevent future Congresses and presidents from just making new rules?
Background:
Any plan to balance the budget is only as strong as the enforcement measures that go with it.
All the effort and sacrifice invested in eliminating the budget deficit could be wasted unless procedures are adopted to enforce decisions once they have been reached. Enforcement procedures and processes cannot erase the impact of economic cycles on the budget deficit. But a strong enforcement discipline can give elected leaders powerful incentives to adhere to deficit elimination policies that have been enacted and put roadblocks in the way of those trying to undo them.
The Concord Coalition Citizens Council advocates spending limits, or caps, on discretionary appropriations. These programs currently make up approximately one-third of the budget. Spending caps have been in place since 1988 and have proved effective.
The pay-as-you-go system, established in 1990, has also been effective. Under this system entitlement expansions and tax cuts are not allowed to increase the deficit. However, more is needed.
The pay-as-you-go system prevents only enactment of new entitlements or entitlement expansions that are not paid for. It does nothing to stop automatic increases resulting from the entitlement programs, precisely the kind of cost increases that keep us in red ink.
Therefore, two entitlement spending caps should be established: one for health care entitlements, and the other for other entitlements excluding Social Security, net interest and deposit insurance outlays. If entitlement payments began to cost more than the caps allowed, Congress could either restructure the programs to reduce their cost or, if Congress failed in this task, across-the-board percentage reductions in the amounts of entitlement payments would be implemented automatically.
The strongest enforcement device would be a balanced budget constitutional amendment. The Concord Coalition has supported this idea, even though implementation and enforcement of a balanced budget amendment would be difficult. The amendment would not resolve the tough choices required for deficit elimination; it would only require that the choices be made. However, without the strong legal and moral imperative of a constitutional amendment, it is doubtful that the necessary political will can be summoned to balance the budget.
Question 10. Would you describe what benefits we, as individuals and as a nation, would receive if we adopted a sensible, fair balanced budget and stuck to it except in times of outright war or deep recession? In contrast, what would the continuation of large budget deficits do to the prospects and outlook for today s families and the next generation.
Background:
Balancing the budget is necessary to provide the money needed for investment for economic growth and a secure future.
If we ignore our mounting debt, it will grow like a cancer that will eventually overwhelm our economy and our society. The interest we owe on the debt will skyrocket. We will continue our vicious cycle of having to raise taxes, cut spending, and borrow more and more to pay interest upon interest. Our productivity will remain stagnant, more of us will have to settle for low-paying jobs, and our economy will continue its anemic growth. Inevitably, we will become more dependent on foreign capital to finance our debts, and our children and grandchildren will face crushing tax burdens to pay off our debts. America will decline as a world power.
If on the other hand we balance the budget, interest payments on the national debt will shrink to more manageable levels; our businesses will be able to invest more because the government will be using up less of our private savings; the economy will renew its rapid growth of earlier years; more of our people will find employment in higher-paying jobs; our children and grandchildren will have their future restored to them without crushing tax burdens and massive debt; and the American Dream will be restored.