“To save money, let’s all quit our jobs and drop out of school!”

A week ago, Gerald Britt wrote a column for the Dallas Morning News questioning the sanity of the program-cutting frenzy in Washington (see below).  In his blog, Rev. Britt updates his crique.  The striking conclusion to the blog post sums things up nicely:

The Rev. Gerald Britt

“In order to rebuild the economy, we must cut education spending, cut job training, cut supports for the low-income and elderly, cut access to health care for those who can least afford it AND give tax cuts to those who have no track record of utilizing tax cuts for 10 years to provide jobs to stimulate the economy?! And, after we have enacted all of these cuts, the poor and low income, the untrained, the elderly, the homeless, the hungry, the incarcerated, the sick and the poorly educated and the inadequately educated will provide the foundation for a new and revived economy?


It’s the equivalent of a family deciding that, in order to save money on gas, we will all quit our jobs and drop out of school.”

Here’s Rev. Britt’s DMN column:

Gerald Britt: Targeting the poor in budget cuts will backfire financially

14 February 2011

More on this storyEfforts to rein in federal spending, impose fiscal discipline and lower the deficit should not include measures that threaten to consign millions of Americans to greater economic insecurity. Yet, as the March 5 deadline looms for Congress to consider a continuing resolution for the U.S. budget, that is exactly what Republican proposals will do.

The fiscal 2011 appropriations proposals now in the House include cuts in non-security discretionary spending of 15 percent; within that reduction are transportation/HUD cuts of 26 percent. So disguised in the lofty and noble concept of “shared sacrifice,” the GOP would require that low-income families, desperately in need of subsidized housing, to disproportionately bear the burden of attempts to balance the budget. At the same time, the proposals keep in place the mortgage interest deduction, which will cost more than twice HUD’s 2012 budget. The impact on the two classes of people: those who need subsidies in order to have a home and those who get subsidies because they have a mortgage, is a distinction as drastic as night and day.

Rental subsidies are not simply rental assistance for the poor. Without such subsidies, low-income families spend an average of 66 percent of earnings on housing; leaving approximately $20 a day for food, transportation, health care and education. This has profound significance for more than 10 million children and their families, nearly half of whom live in neighborhoods of concentrated poverty. The idea that we can cut cavalierly into programs that provide shelter for these children and their families without paying a much larger price is the height of insensitivity at best and blatantly foolish at worst.

Such proposals may play well to a constituency unreflectively looking at short-term financial benefit. But a long-term view of the costs of poverty trump the savings associated with these cuts. Stresses associated with growing up with insecurity in basic areas such as food and shelter are directly related to gaps in achievement and development; gaps that, according to the McKinsey Global Institute, cost between $1.3 and 2.3 trillion annually, or 9 to 16 percent, of lost U.S. gross domestic product. This is a quintessential example of being penny wise and pound foolish.

Completely ignored are considerations to lower the deficit by reforming the mortgage interest subsidy, as recommended by the National Commission of Fiscal Responsibility and Reform.

The mortgage interest deduction mainly benefits homeowners in the top fifth of income distribution and is only available to those who itemize deductions on their tax returns (making it worth more to itemizing taxpayers in higher tax brackets). Studies show that this deduction has no effect on homeownership rates. Currently, the deduction is applicable for mortgages up to $1 million dollars and applies to both primary and second residences. It also extends to $100,000 for home equity loans. The bipartisan debt-reduction commission is among those recommending the government replace the mortgage interest deduction with a 12 to 15 percent tax credit, a cap on the interest deduction on mortgages at $500,000 and no deductions for second homes or home equity loans.

This is a proposal more sensible and cost effective than one that threatens to push a quarter of eligible families off of critical housing assistance and further into poverty or possibly homelessness. The package currently being discussed would, through fiscal sleight of hand, push an ideological fiscal agenda to cut non-security funding by $100 billion dollars by getting us back to pre-2008 spending levels. And, on closer inspection, they are proposals that will accomplish neither goal.

Texas’ congressional delegation shouldn’t support “shared sacrifice” proposals that balance the budget on the backs of the population that is suffering most from the most recent recession and will be among the last to experience recovery.

The Rev. Gerald Britt Jr. is vice president of public policy at CitySquare. His e-mail address is gbritt@citysq.org, and he blogs at changethewind.org.

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