We’re all chips in Washington’s poker game

12/16/2012

The no-limit poker game between President Obama and House Speaker John Boehner of Ohio rolls on, with the threat of a return to recession on the table. Although there’s no resolution in sight, barely two weeks before nearly $700 billion in automatic tax hikes and spending cuts are set to afflict us, I’d rather be playing the President’s hand.

Mr. Obama argues persuasively that voters gave him a mandate last month for his insistence that tax rates on the wealthiest Americans must rise as part of any deficit-reduction deal. Mr. Boehner continues to counter with vague — at least in public — ideas for higher revenue, along with demands for slashes in entitlement programs and other spending that are louder than they are specific.

Public opinion polls suggest that Americans will primarily blame Republicans if the nation tumbles off the fiscal cliff. Mr. Boehner surely cares about that, even if the reckless extremists in his caucus don’t. But the stakes are too high for all of us for the budget talks to become merely a matter of who blinks first.

A report in The Blade last week detailed the impact on Ohio of a plunge off the cliff. About 47,000 unemployed Ohioans would lose extended jobless benefits. Some local teachers and other public employees would quickly lose their jobs.

Fewer poor children would be served by the local Head Start preschool program. Public schools with large numbers of low-income students would get less remedial aid for tutoring and other services. Schools would have less money to train and support teachers, and to provide special education. Class sizes would get bigger.

There would be fewer home-delivered meals for needy old folks, fewer trips provided to their doctors’ offices, and less assistance to buy nutritious food at farmers’ markets. Impoverished households would get less help with their heating bills. There would be less money to help pregnant women and nursing mothers eat better.

The City of Toledo would lose federal grant money for community development and emergency services. Local preparedness and public-health safeguards would take a hit. Fewer Lucas County residents would be trained as nurses, truck drivers, and information technology specialists.

Air safety, food safety, federal law enforcement — all are threatened. If a budget stalemate brings back the recession, the overall unemployment rate, in Ohio and across the country, certainly will rise. Do we really want to risk all of these things to preserve tax breaks for millionaires and billionaires?

Mr. Boehner and other Republican members of Ohio’s congressional delegation assert incessantly that the problem with the federal budget is not revenue but spending. Would they like to defend these specific spending cuts, which would affect many of their constituents?

A new report by the education fund of the liberal advocacy group Innovation Ohio concludes that the GOP revenue proposals would not raise enough money to meet deficit-reduction goals, and could mean higher taxes for poor and middle-income Ohioans.

The study asserts that the Republican plan to raise revenue without increasing tax rates, by closing tax loopholes and limiting deductions for wealthier taxpayers, also could hit Ohioans who aren’t rich, depending on how those restrictions are defined.

“They’re basically promoting Mitt Romney’s plan,” says Dale Butland, Innovation Ohio’s communications director. “That’s compromise Republican style — adopt the loser’s platform. People who voted for Republican congressmen didn’t vote for their taxes to go up.”

In Ohio, the study says, falling off the fiscal cliff and ending the George W. Bush tax cuts for everyone would cost the average family that earns less than $250,000 a year nearly $2,000 in higher taxes. By contrast, the 1.7 percent of Ohioans who earn more than $250,000 would get an average tax cut of almost $33,000 next year if the upper-income rates don’t change.

The Innovation Ohio report deliberately does not address the spending side of the fiscal-cliff talks. But it’s inevitable that a final compromise must involve not only higher revenues but also lower spending.

If you’re going to avoid the Draconian cuts in discretionary and defense spending that will take effect in the absence of a budget agreement, you have to deal with the entitlement programs whose costs consume 60 percent of federal spending and are rising faster than the economy is growing.

Some Democrats and their special-interest allies don’t want to acknowledge that. They insist that Medicare, Medicaid, and Social Security must be protected from cuts at all costs. Some of this argument may be for show, but it’s no more useful than the Grover Norquist no-tax-never-ever straitjacket that many Republicans have pledged to wear.

The challenge remains to develop balanced reforms to entitlement programs that would, in particular, restrain the growth of health-care costs. The answer is not to target poor, elderly, and disabled recipients, as some proposals would do. It won’t be easy, but it can be done.

You could change the way the cost-of-living index is adjusted without afflicting the neediest recipients. You could means-test entitlements. It’s hardly an ideal solution, but if you raised the Medicare eligibility age from 65 to 67, you still could exempt poor seniors whom Medicaid wouldn’t cover. Such matters at least have to be part of the discussion.

The notion is that the President and speaker are posturing in public to reassure their political bases, giving them room to negotiate in private. Let’s hope they’re making progress. Washington can’t expect us to accept the alternative.

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Last week’s column cited a study by the national research group Public Agenda of high-poverty, high-achieving public schools in Ohio, including Grove Patterson Academy in Toledo. The report mentioned, among other innovations, the academy’s longer school day and year.

Patterson’s principal, Herneika Johnson, advises that because of Toledo Public Schools budget cuts, the school no longer offers an extended day or year. But she adds that the school’s “founding principles” remain intact and continue to contribute to Patterson’s success.

David Kushma is editor of The Blade.

Contact him at: dkushma@theblade.com