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Guest Commentary: April 18, 2001
The Budget:
We Need to Stop Suggesting That We Can Have It All
The Honorable John Edwards (D-NC)
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We are at a unique time in our country's history. We have an opportunity to do things that we haven't had the chance to do before. But in order to take advantage of this unique moment in our country's history, we must make the right decisions and make the right choices. I think we have to begin by being straight with the American people.
First, we need to be honest about the fact that none of us know what is going to happen 5, 6, or 7 years from now. For us to suggest otherwise is nonsense. The American people do not know what is going to happen, and we don't know what is going to happen. Any reputable economist in the country will say that there is no way to predict what is going to be happening 5 or 6 years from now in our economy.
Second, in being straight with the American people, we need to stop suggesting that we can have it all. There is a suggestion being made by some people in Washington that, in fact, we can have it all. We can have a huge tax cut. We can do everything we need to do for our public school system. We can give you prescription drugs. We can do everything we need to do to help our military men and women. We can have everything. Well, that is not the truth. That is not being straight with the American people. And I think the American people know this.
There are two basic principles around which I hope this debate will revolve. First, we don't know what is going to occur 5 or 6 years from now; second, no American family can have everything
and we as a nation can't have everything.
First, on the issue of what is going to happen 5 or 6 years from now, what we know from experience is that when budget surplus projections were made -- actually, they were talking about the deficit at the time in the Reagan administration -- the projections were off by hundreds of billions of dollars. When George Herbert Walker Bush was President of the United States, exactly the same thing occurred. The projections were off by hundreds of billions of dollars. The same occurred in the Clinton administration. Common sense would tell us that the current projections are just as speculative. The Secretary of the Treasury and Chairman Greenspan have all suggested exactly the same thing.
So what we know with certainty is that we cannot predict where we will be 5 or 6 years from today.
The President's tax cut is loaded to the last 5 years of their 10-year period. The bulk of the costs and the bulk of the benefits fall in that last 5 years. It is also during that last 5 years that most of the projected surplus falls.
We have two things occurring simultaneously. The bulk of the costs of the tax cut and the benefits occur at exactly the same time that the bulk of the surplus projection occurs, and also at the same time that those surplus projections are riskiest, when they are least reliable.
Does it make common sense for us to have a huge tax cut, the bulk of which coincides with the time when the surplus projections are at greatest risk for being wrong? We know these projections are going to be wrong. That is the one thing we don't have any doubt about. We just do not know how wrong. And we need to be straight with the American people about that.
So knowing these projections are going to be wrong, what is the sensible thing to do? The sensible thing to do is to have a more moderate tax cut that protects Social Security, that protects Medicare, and make sure the tax cut is fair to all the American people.
If 5 or 6 years from now -- and we can't predict right now what is going to occur -- the surpluses actually exist, and we have enacted a moderate tax cut, we have done everything we can to pay down the debt, and if we have protected Social Security and Medicare, we can do something else. We can do another tax cut.
In the alternative, or even in addition, we can also do something about what we know is coming in the next decade -- the retirement of the baby boomers. No one is talking about that, but this is going to put a tremendous strain on the Social Security system. But we know it is coming.
One suggestion which has been made by the Concord Coalition is that we have mandatory IRAs; that we use some part of the surplus at that point to provide mandatory IRAs to the people around the country, which helps deal with the demographic shift that we know is coming in the next decade. This is something we can talk more about, but we need to start focusing on this before it is too late.
What I am suggesting is the common sense thing to do, knowing the unreliability of the surplus projections, knowing that we need to pay down our debt, knowing that we need to protect Social Security and Medicare, is to have a more moderate tax cut now and to pay down the debt to the extent we are able to pay it down.
No one in this body wants to saddle our kids with these huge interest payments that are being made now on our national debt. And we don't want to pass the debt itself on to our kids either. The best thing we can do for them is make sure we pay down this debt.
In addition to that, we don't want to make our kids take care of us because Social Security is insolvent. They shouldn't have to take care of us because we failed to protect Social Security.
We have an extraordinary opportunity to address these problems right now. The key is that we not squander it.
Second, I want to emphasize that we must be straight with the American people and not suggest to them that they can have everything. It is just not the truth.
We can have a tax cut, and we should have a tax cut. But we can't have a tax cut of the size the President is proposing and do all the other things that are being talked about -- education, for example.
Having been to schools all over my State in North Carolina, I know how desperately we need to make a real effort to improve our education system in this country.
We have actually done some great things in North Carolina. Some of what the President is proposing is patterned after North Carolina -- tough accountability, measurement, identification of the schools that are not performing, that are low performing, and making an intense effort to turn those schools around.
This is what we did in North Carolina when we went through that process and identified the schools that were low performing, in addition to having tough accountability, we sent real experts in to turn the schools around. In those schools that are in poor school districts that did not have the resources, we helped them; we gave them the resources they needed to turn the schools around.
We know that needs to be done. Unfortunately, under this budget resolution, that is probably impossible. We cannot expect to have effective education reform if we don't commit ourselves to do what is needed. We have to have a balanced, thoughtful approach to this issue.
Secondly, I want to mention our military men and women. We have military bases that are very important to us in North Carolina. I have been there. I have talked to our military men and women. These are people who are devoting their lives to protect us, to defend us. They have, in many cases, inadequate housing. Some of them are having to live on food stamps. This is an embarrassment to us as a nation.
We have to do something for our military men and women. The problem is, we can't do everything. We can't have a huge tax cut and still do what needs to be done in these other areas. But what we can do is have a more moderate tax cut that doesn't jeopardize our commitment to important national interests and that doesn't jeopardize Social Security and Medicare. And most importantly, we can pay down the debt, not saddle our kids with it.
What we ought to do is not spend money we do not have, to not spend money if we have no idea whether it will ever come into existence. Why is that not the responsible thing to do?
The key to this -- in this debate, and in our discussion, our dialog with the American people -- is that we tell them the truth. We do not know what is going to happen 5 or 6 years from now. In addition to that, we have to be responsible when we decide what to do about this budget resolution. They can't have everything. They know it. American families can't have everything they want, and they know as a nation that we can't have everything we want.
We also have to make absolutely sure that this tax cut we enact is fair; that it is fair to everybody; that the benefits are not directed at a particular part of our society. We need to make sure that everybody gets a benefit -- including those people who work but only pay payroll taxes and don't pay income taxes; those people need to be included in any tax cut.
We need to make sure it is balanced so that middle-income people all across this country get a substantial benefit, so that working families get a substantial benefit.
So the principles we should be guided by are: No. 1, having a moderate, fiscally responsible tax cut; No. 2, making sure Social Security and Medicare are protected; and, No. 3, making sure this tax cut is fair--fair to all Americans, not unfairly benefitting one part of our society.
In conclusion, we are at a remarkable moment in our country's history. We have a chance to have a real impact not only over the course of the next decade but over the course of the next century. But we can only do it if we make the right decisions, if we are careful and deliberate and thoughtful, and if we are straight with the American people. We can have a balanced, moderate tax cut, giving real tax relief to the American people. We can pay down our debt, which is the responsible thing to do. We can preserve and shore up Medicare and Social Security. And we can have a tax cut plan that is fair to all Americans. But in order to do that, we have to begin by telling the American people the truth. And the truth is, we don't know what is going to happen 5 or 6 years from now, and they can't have everything.
We as a nation have important decisions to make. We have important choices to make. Those choices are going to have consequences for our country, and for our children.
Note: This column has been adapted from a speech Sen. Edwards delivered on the floor of the Senate, April 3, 2001.
 How to contact Senator John Edwards (D-North Carolina)
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