Democrats Need a New Deal
WHEN President Clinton delivered his State of the Union speech Jan. 8, it opened the Democrats' 1996 campaign. But the themes were out of the 1930s and 1960s. The tragedy is that crucial Democratic principles crying out to be adapted to the 1990s will be left by the wayside.
One of the most important lessons of the New Deal was that government can stimulate the economy by borrowing from the future. But we have made what was meant to be temporary strategy a standard practice - to the great burden of our children. Pre-spending the next generation's money has become so standard that with the most conservative Republican budget plan, we will still add $1.5 trillion over the next seven years to the national debt.
The Democratic Party was wonderful in distributing the bounty of a growing pie, with great consideration and fairness to the poor and vulnerable. Heroically, we fight for student aid, Head Start, and the earned- income tax credit. America's chief challenge today, however, is not only how to distribute our economic pie, but how to grow that pie. The US faces, in the words of Sen. Bill Bradley, "inadequate economic growth unevenly distributed." Our history makes us much better at distributing among the present needs than growing for the future.
Many of the great Democratic Party victories involved lifting the elderly out of poverty. We succeeded so well that today older Americans have among the highest discretionary income in the US. Poverty today is found more often among those in diapers. The federal government spends more than 60 percent of our social budget on the 13 percent who are over 65, despite the fact that the elderly are among the age groups with the lowest poverty rates. We no longer fund those who need it most, but those who lobby the hardest. We spend more turning 80-year-olds into 90-year-olds than we do ensuring 6-year-olds become educated 18-year-olds.
Social Security, the crown jewel of the New Deal, was so successful in raising the elderly out of poverty that we failed to notice that demography has made the current system unsustainable. An aging society, with fewer children and lower per capita economic growth, turns programs like Medicare and Social Security into actuarial disasters.
Yet, we piously protect these entitlement programs as if they still only help the poor and vulnerable. We ignore the fact that they largely benefit the middle- and upper-income segments of our society. By preserving these programs at any price, we actually aid the destruction of crucial discretionary programs and, thus, expose the poor and vulnerable to more hardship. Busy fighting off the critics in the name of "fairness," we have failed to note that too many New Deal programs have become unsustainable, tilted toward the rich, and brutally unfair to future generations.
Democrats have a hard time understanding that debt can either save a society (as in the Depression) or destroy a society (as in Argentina and Germany in the 1920s). Growing our economic pie - by balancing the budget, increasing national savings, and reining-in bloated entitlement programs - is as important as fairly distributing the pie.
Indeed, it is true to our Democratic spirit to fight to preserve the earned-income tax credit and Head Start. But we cling to the chains of the past by blindly sparing outdated and dangerously expensive programs. And by ignoring the consequences of a skyrocketing national debt, we mock the spirit of the future.
