If there is a single reason why the current debt ceiling imbroglio has yet to be resolved, it is the Republican insistence on no tax increases, even through the elimination of tax breaks for high earners. Yet the debt ceiling budgetary proposal put forth by House Speaker John Boehner includes a huge, hidden, and destructive tax increase on those least able to fight back, or even register their opposition: children.
Boehner proposes to immediately cut the discretionary budget by more than $1 trillion, most -- if not all -- of which would come from the non-defense discretionary budget. This portion of the budget includes a lot of important government services, including benefits for military veterans, Homeland Security, environmental protection, and consumer protection against corporate abuses and the excesses of the financial industry. But nearly half of this budget is composed of what economists call "public investments": infrastructure, education and training, and basic scientific research and development.
The case for higher public investments is overwhelming. The United States is falling behind in educational attainment and broadband access and connectivity. Blackouts caused by our antiquated electricity grid are occurring with greater and greater frequency, and much of our transportation infrastructure is literally crumbling beneath our feet. According to the American Society of Civil Engineers, over one in four U.S. bridges are structurally deficient or functionally obsolete (not news to anyone from Minneapolis), and billions of gallons of untreated wastewater are discharged into our surface waters each year due to an aging sewer system. Overall, we need to spend an additional $1 trillion over the next five years just to restore our existing infrastructure to adequate condition.
Herein lies the tax hidden in Boehner's plan. Our investment levels are already too low, but according to a recent EPI analysis, Boehner's proposal would, by 2021, cut the level of public investments as a share of the economy by almost 45%, down to 1.3 percent of GDP, the lowest level in over half a century. Those cuts would certainly cause immediate harm, costing us hundreds of thousands of middle-class jobs in construction, education, and throughout the economy. But inadequate investment in these vital areas are the functional equivalent to a tax on future generations, who will be increasingly burdened by an antiquated and crumbling infrastructure and a poor education system that leaves them unable to compete in the global labor market. They will live in a country with fewer job opportunities as businesses move the knowledge and innovation jobs of tomorrow to the same place they moved the manufacturing jobs of yesterday: overseas.
It is this America -- a country of lower productivity, income, and living standards -- that Boehner proposes to pass on to the next generation. Instead of reversing 30 years of tax cuts on high-earning individuals, Boehner proposes that we instead tax our children and grandchildren.