DES
MOINES
– A
public
forum
sponsored
by
the Progressive Policy Institute (PPI) today
kicked off the 2020 presidential debate over fiscal issues in the
nation’s first caucus state. The event featured Former U.S. Secretary
of Agriculture and Iowa Governor Tom Vilsack; Former Iowa Lieutenant
Governor Patty Judge; Iowa Rep. Chris Hall, Ranking Member on the House
Appropriations Committee; and Director of PPI’s Center for Funding
America’s Future, Ben Ritz. PPI President Will Marshall moderated the
panel discussion.
There,
PPI
released
a
new
report authored
by
Ritz
about
the
role that public investment plays in providing the
foundation for a prosperous economy, as well as the steps that must be
taken to end America’s current public investment drought.
“Federal
spending
on
public
investments
in education, infrastructure, and
scientific research is now near record-low levels as a percent of
GDP,”
said
Ritz. “Meanwhile,
the
cost
of
interest
on our growing national debt is skyrocketing
thanks to fiscally irresponsible tax cuts and the unchecked growth of
federal health and retirement programs. By 2026, annual interest costs
will be more than the twice the size of all public investment spending
combined if current policies remain in place.”
This
year,
for
the
first
time in modern history, China – not the United
States – will be the global leader in R&D spending, jeopardizing
America’s position as the global leader in innovation. Failure
to
reverse
America’s
disinvestment
in
infrastructure
could reduce GDP
by nearly $4 trillion over the next decade, costing the average family
about $3,400 per year. And growing problems with our nation’s education
system are denying American workers the skills they need to compete for
next-generation jobs.
A
major
cause
of
this
public investment drought is irresponsible
policymaking in Washington, according to the report. President
Trump
and
the
Republican-controlled
Congress
abandoned
any pretense of
fiscal responsibility and starved public investments of much-needed
revenue by adding more than $2 trillion of reckless tax cut to the
national debt over the past year. Further, the aging of the population
and rising health care costs is causing projected spending on federal
health and retirement programs to grow from about 10 percent of GDP
today to nearly 16 percent of GDP in 2048. The refusal of both parties
to modernize these programs has left fewer resources available for
federal public investment.
State
and
local
governments
are
also suffering from similar problems that
constrain their own abilities to fund public investments. Republican
governors
and
legislators
in
states
such
as Kansas and Oklahoma enacted
unaffordable tax cuts that resulted in dramatic cuts to public
investment. State and local budgets are also strained by demographic
changes: as a share of GDP, state spending on Medicaid has increased
nearly 40 percent since 2000 due to rising health costs, while the
costs of unfunded pension liabilities have doubled during the same
period as the bill for retiring baby boomers comes due.
The
result:
a
perfect
storm
of fiscal mismanagement has drained public
investment spending at all levels of government.
Fortunately,
there
are
signs
that
the American people appreciate the stakes and need
for change: the report notes that large majorities of voters in both
parties have expressed strong support for government spending on public
investments in several independent polls. Additionally, a poll
conducted by PPI on the eve of the 2018 midterm elections found that
more respondents (85 percent) were very or somewhat worried about the
growing federal budget deficit than any other issue polled – including
almost 9 out of 10 independent voters.
These
findings
suggest
that
Democrats
serving in the 116th Congress, and
running for President in 2020, have a unique opportunity to draw a
stark contrast between themselves and fiscally irresponsible
Republicans by offering the electorate an agenda that pairs robust
public investment in progressive priorities with the fiscal discipline
necessary to secure those investments for generations to come.
###