Elections 2012: Austerity as an Experiment

The Democrats and the Republicans made it a point to include American Indian and Alaska Native issues in their party platforms. As Rob Capriccioso pointed out both the parties have pro-tribal government statements, here and here.

But one word defining this era – austerity – is not found in either document. I’m the first to admit, this is a terrible topic for a Friday afternoon. But it’s important. So scan it now, then head off and enjoy the weekend. But don’t give up and don’t ignore this idea of austerity because it will shape much of what occurs in Indian country for the next few years.

A bit of context: Austerity is a global trend. Governments in Canada, the United Kingdom, Spain, Greece, really, governments worldwide, are cutting services and employees in record numbers. The result of those policies is consistent in every country because drastic budget cutting depresses job creation and inflicts pain on its citizens.

Today’s national job report reflects that. The private sector is growing – more than 1.2 million jobs were added – while government shrinks. Governments, city, county, state and the federal, lost 7,000 jobs in August for a total of 93,000 in 2012. (Unfortunately there is no real time data for tribal government jobs. It should be a priority.)

This austerity experiment will continue no matter which party captures the White House in November.

The act of cutting government at levels is a bit more troubling for the Democrats. The party debates itself in its platform. It talks about investments in education and tax credits for students mostly in the past tense. The one exception is a proposal to “double key investments in science to educate the next generation of scientists and engineers, encourage private sector innovation, and prepare at least 100,000 math and science teachers over the next decade.”

Yet a few sentences later the Democrats return to its version of the austerity pledge, a promise to “restore fiscal responsibility to Washington.” It calls for “tough pay-as-you-go budget rules of the 1990s so that all permanent new spending and tax cuts must now be offset by savings or revenue increases. President Obama has already signed into law $2 trillion in spending reductions as part of a balanced plan to reduce our deficits by over $4 trillion over the next decade while taking immediate steps to strengthen the economy now. This approach includes tough spending cuts that will bring annual domestic spending to its lowest level as a share of the economy in 50 years, while still allowing us to make investments that benefit the middle class now and reduce our deficit over a decade.”

What’s wrong with that tough approach? It solves the wrong problem. The slice of the budget called domestic discretionary spending is not the source of any of America’s budget problems; it’s the unfunded, long-term promises found in government pensions, Medicare and Medicaid. By that standard the $16 trillion debt we owe is nothing. The real challenge is much, much bigger. Some economists peg it as much as $100 trillion.

The Democrats simply say those programs will be protected without saying how. Playing off Bill Clinton’s speech on Wednesday night, it’s demographics. There are more older Americans than ever before and fewer younger Americans to pay the bills.

But if the Democrats are eager to show their fiscal resolve cutting domestic spending, the Republican document offers a contrast because it also lays out a course for two of the big three ticket items, Medicare and Medicaid. “It isn’t enough to merely downsize government, having a smaller version of the same failed systems,” the document says. “We must do things in a dramatically different way by reversing the undermining of federalism and the centralizing of power in Washington.” So on health care, the Republicans say, “genuine competition is the best guarantee of better care at lower cost.”

But in the meantime, until the country reaches consensus about how to even debate its long term promises, the next few years will be all about austerity.

The austerity experiment takes shape next year when automatic across-the-board budget cuts begin, using a process called sequestration. The details about how those cuts will work is not yet known, but they start at around 8 percent for most federal programs, except 2 percent for Medicare providers such as the Indian Health Service.

Because so much of Indian country is the direct beneficiary of federal spending, the impact will be immediate. And painful. No matter which party wins.

Mark Trahant is a writer, speaker and Twitter poet. He is a member of the Shoshone-Bannock Tribes and lives in Fort Hall, Idaho. He has been writing about Indian Country for more than three decades. His e-mail is: marktrahant@thecedarsgroup.org.