Robert Greenstein, director of the Center on Budget and Public Priorities, spoke at Hamilton on April 12 as a part of the Levitt Center Speaker Series "The Environment: Public Policy and Social Responsibility."
Described by Professor of Sociology Dennis Gilbert as a true "player" in Washington politics, Greenstein discussed the United States' federal budget, focusing on the recent tax cuts and the long-term effects of the cuts.
Although many people argue that the United States' Social Security System is bound to collapse by the time baby-boomers retire, Greenstein argued that this simply is not true. What is true, however, is that the national deficit and budget are much worse than most think, and projections show that the tax cuts will only increase the national deficit over the next 10 years.
In early 2001, the Office of Management and Budget was forecasting a financial surplus for the next 10 years; the United States was projected to generate an extra $5 trillion, which would go toward alleviating the national debt, as well as brace Social Security for the baby-boom retirement boom, according to Greenstein. The United States' anticipated surplus would eliminate the interest payments that the nation currently makes before boomers retired, Greenstein explained.
"That was where we were three years ago. That is not where we are today," Greenstein said. Greenstein explained that many financial institutions have looked at our recent economic state and our current economic policy. The Bush Administration's policy, as it stands now, is to continue the tax cut while simultaneously increasing spending on national defense and homeland security. This combination of cutting and spending will yield, according to Greenstein, an economic recession and a huge national deficit.
Although many people argue that the United States government's spending is out of control, when one looks historically at spending in the United States, the current administration is spending less this year (as a share of the economy) than any other year from 1975 to 1996. However, Greenstein explained, federal revenues have fallen to "historically low levels." The total of all federal revenues is now at its lowest since 1950, and the federal income tax revenues are at their lowest since 1942, according to Greenstein.
Greenstein highlighted the drastic role the tax cut makes by showing several slides. He argued that although a deficit would still exist without the tax cuts, the tax cuts only add to the deficit, and will not help alleviate the deficit, as many people argue.
Similarly, confirmed Greenstein, the Bush Administration plans to cut spending on domestic programs, including education, health and other public services; the budget for these programs, although currently being slimmed, will be cut drastically in the years after the 2004 presidential election.
As America's baby-boom generation ages, and as health care costs continue to rise, it seems as though right now is an inappropriate time to propose a tax cut, thus cutting the government revenue, and therefore increasing the national deficit, according to Greenstein.
Therefore, where can we go from here? Greenstein agreed that no matter who is elected president, if Congress remains Republican, American citizens cannot expect the tax cuts to be overturned. America needs to have hope, Greenstein stated, as well as voice their opinion. "All the pain is passed to your generation," Greenstein concluded, urging Hamilton students to advocate for economic change.
-- by Emily Lemanczyk '05
