The U.S. public debt burden is $7.75 trillion, and “most economists agree that our rising deficit poses a very real threat to the health of our future economy.” We could start paying down this debt – as many Americans are struggling to do with their own personal finances – but our federal government continues to run up even larger deficits.
One of the reasons we cannot reign in our spending ways is our political leaders continue to care more about representing the interest of their state, and getting reelected, than about the future health of the U.S. economy. Take Senator Ken Conrad (D-ND), Chair of the Senate Budget Committee, for example. Sen. Conrad is adamant that Congress and the President need to reign in their irresponsible spending ways and pass a balanced budget. He has even gone on record as saying:
“Yes, the small things are important to my state, but I also recognize that the big things are what matter from a national perspective. What really matters is that we have an overall (budget) plan that is balanced.”
As Chair of the Senate Budget Committee, Sen. Conrad has arguably more clout over this process than any of his Congressional peers. So, in practice, how does he use this influence? Well, Sen. Conrad awarded his home state of North Dakota with the third highest amount of federal earmarks per capita of any U.S. state ($213 per capita versus the U.S. average of $41 per capita for fiscal 2008 -2009).
In a time when we as a country are spending 10% of our revenues ($250 billion) to repay our federal debt, and Social Security, Medicare and Medicaid consume another 57% of our budget ($1,430 billion), it’s good to know our leaders are “looking out” for our best interest. Oh, least I forget, the current 2011 budget request is likely to add another $1.6 trillion to our growing public debt (Did you know that China and Japan, collectively, own $1.5 trillion of U.S. debt?), which went before the Senate Budget Committee this week. The best part of it all is that the Obama administration projects the entitlement programs and the interest on our deficit will “absorb 80% of all federal revenues by 2020.” Therefore, let’s all be clear, our current political leaders, much like their recent predecessors, are fully aware of the approaching fiscal crisis and are doing nothing to avert it.
Speaking of fiscal crisis, let’s not forget about our own state’s budget woes. Last year, the state of Pennsylvania took 101 days after its constitutional deadline to pass its $28 billion budget. PA was the last state to pass its budget amidst the worst recession since the Great Depression. By August of last year, most of the state’s 67 counties could not afford to fund their nonprofit agencies without state money. (Harrisburg did manage to pass an interim budget that would pay the state’s 71,000 government workers, but nonprofit agencies were not included.) During a time of great community need, and declining public contributions, foundation funds, and already scaled back government contracts, Pennsylvania politicians could not decide on how to fill a $3 billion hole in our budget (or 10% of the total budget, which is pretty “cheap” in comparison to our projected 33% federal budget hole for fiscal 2010 – 2011). Instead, nonprofits were forced to take out private loans to continue to operate; reduced their services; furloughed or reduced their staff; and, in some cases, closed their doors altogether.
The bad news for nonprofit agencies and Pennsylvanians alike is the fiscal picture in Harrisburg is sure to only get worse because of the looming debts in both the state employees’ and teachers’ retirement funds. PA legislators entered the millennium with a pension surplus and spent the surplus funds despite the fact that they would one day have to deliver on this “accounts payable”, just as their federal counterparts did (remember Al Gore’s 2000 platform promise to create a Social Security “lockbox”?). Unfortunately, the “payable” starts coming due in 2012, and the Tribune Review and Post-Gazette both estimate it’s going to cost the state approximately $3.5 billion (the Trib says $4 billion, the PG says $3 billion). Mind you, this money will not be used to improve our schools, create new jobs, or improve living conditions in our cities and rural communities, but rather will cover the state’s entire employer contribution for state workers and half of the employer contribution for school workers for fiscal 2012 – 2013. Essentially, the folks in Harrisburg are imitating the same fiscal irresponsibility of their federal counterparts. May the most irresponsible lawmaker “win”, I guess?