By Rob Thompson
The anti-deficit fever rippling through Congress threatens to jeopardize the modest recovery that we’ve begun to experience in North Carolina and in other states. Most recently, and against the advice of mainstream economists, the U.S. House of Representatives stripped extended state Medicaid assistance from an impending “jobs†bill, and it’s unclear if the Senate will restore it. If the Senate fails to act, North Carolina stands to lose $500 million in anticipated revenue for the upcoming budget year.
What would this mean for North Carolina? To be clear, the loss of $500 million in Medicaid assistance will not be contained within Medicaid itself. Legislators will doubtlessly spread new cuts to public schools, child protective services, community colleges and much more. Not only would such cuts result in the direct loss of thousands of jobs, but it would also mean that children and families won’t have access to the support they need to thrive in tough times.
Let’s talk about specifics. Here’s one scenario: We could eliminate health care for 130,000 low-income children ($77 million), all of North Carolina’s public health programs ($161 million) and our juvenile justice system ($145 million) and still have more than $100 million left to cut. This would mean no more community programs for at-risk youth, no more infant-mortality prevention programs and no capacity to respond to a pandemic. We are talking about serious money with serious consequences.
Yet, many of our congressional leaders, both Democrat and Republican, are so deluded by the recent anti-deficit hysteria that they invoke meaningless rhetoric whenever a discussion about spending arises. One of the most popular sayings goes about like this: “As our families are forced to tighten their belts, so must the government.†The exact opposite is true: As families struggle to get by (i.e., “tighten their beltsâ€), we expect the government to play an active role in making the hard times a little less hard and to ensure that our children continue to receive an education, health care and the like. To do that, Uncle Sam has to spend some money.
It’s here that the federal government has a unique role. In almost all states, including North Carolina, the state constitution does not allow the state to run a deficit. This means that when a recession hits and revenues drop, North Carolina has to either raise taxes or take millions out of funding for everything from education and public safety to road construction and traffic lights. Fortunately, in 2009, President Obama and Congress passed the American Reinvestment and Recovery Act, which provided North Carolina with invaluable support during the worst of the recession and arguably saved the country from a full-blown depression.
Now, with recovery struggling to gain a foothold, North Carolina cannot afford for the federal government to pull back on its investment in our state and in other states around the country – especially given that anti-recession spending has contributed only a tiny fraction to the federal deficit. In better times, we can prioritize reducing that deficit; but while families are still struggling to get by, the federal government needs to loosen its belt and help states, communities and families make it to the other side.
Rob Thompson is the director of the Covenant with North Carolina’s Children.