Budgets are ultimately
moral documents. They establish our priorities and reveal our
values.
Despite a brief flirtation
with fiscal responsibility in the 1990s, for most of the past
several decades our government's economic actions have been marked
by pious words and profligate spending. It's been a succession
of free lunches paid for by passing the buck on to the next generation.
But the bill is coming.
The baby boomers begin
to turn 60 this year, as President Bush pointed out in this week's
state of the union address, acknowledging the "me-first"
attitude of his generation by saying it is "more than a personal
crisis. It is a national challenge."
The financial pressures
of an aging population on our society have only just begun and
already once-proud companies like General Motors have been brought
to their knees as a result of generous labor deals cut decades
ago. Rising private sector pension and health care costs will
have a devastating domino effect on the budgets of surrounding
local and state governments of Detroit and Michigan.
This is not just a
Rust Belt problem. By the year 2030, Social Security, Medicaid,
and Medicare costs will take up 60% of the U.S. federal budget.
That doesn't leave a lot for actually running and protecting the
country - those little things that the government was actually
formed to do in the first place.
That's why Mayor Bloomberg's
farsighted budget for New York City deserves not only local applause
but national recognition. Blessed with an unexpected $3.3 billion
budget surplus courtesy of Wall Street profits and the real estate
boom, on top of the $52 billion annual budget, the recently re-elected
businessman mayor chose to spend his newfound political and actual
capital to pay down the city's debt and address the rising fixed
costs of long-done labor deals and spiraling entitlements.
On Tuesday, Mr. Bloomberg
proposed spending $500 million to pay down the city's long-term
debt, while using a billion to pay for capital projects upfront
instead of borrowing and saddling future mayors with financing
costs. He also set aside $2 billion to establish a fund for municipal
retirees' health care - already a $1 billion annual expense to
the city. And that's not the only cost that will exponentially
increase as the baby boomers are digested: New York City's pension
costs have already spiked to more than $10 billion, double the
amount spent just five years ago.
Dealing with the underlying
issues that constantly threaten to bring the nation's largest
city to the brink of bankruptcy appears a thankless task - it
is not as cool as cutting crime or as emotionally satisfying as
promising to be the education mayor. That is precisely why Mayor
Bloomberg deserves widespread thanks for choosing to take on this
necessary effort. It may just be a businessman's common sense,
but this is one badge of honor that should help define his political
legacy for future occupants of the office.
Of course there will
always be critics, ideological ostriches who prefer to bury their
head in the sand than adjust their opinion based on the facts
on the ground. In the case of New York, the City Council inevitably
complained about the lost opportunity for more education spending,
willfully ignoring the additional $70 million the mayor proposed
for charter and special education schools. But even those who
hope for a Mother Teresa approach from the government must realize
that it can't help anyone unless it is solvent.
Mayor Bloomberg's
focus on the ultimate bottom line seems sadly absent from the
national debate. When President Bush essentially conceded defeat
on his intended second term effort to reform Social Security in
his State of the Union address, the Democratic side of the aisle
burst into applause, prompting the president to slip into schoolmarm
mode, wagging his finger at Congress while delivering his reminder
that "the rising cost of entitlements is a problem that is
not going away."
Suggesting another
approach, the president proposed a bipartisan committee to examine
the impact of baby boom retirements on Social Security, Medicare,
and Medicaid. Whether Republicans and Democrats in Congress can
actually get together to work on a common problem anymore is another
matter.
Ironically, fiscal
responsibility has become a bipartisan value. According to the
new Pew Research Center Report on emerging national priorities
for 2006, the stereotype of Democrats being in favor of free-spending
budget deficits has fallen away. In fact, now more than 62% of
Democrats rate reducing the budget deficit a national priority,
compared to the 45% of Republicans who said the same - a near
reversal of the poll numbers from 1997. At the same time, self-described
conservative Republicans appear to have stopped being fiscally
conservative - just 36% of them rate reducing the deficit as a
national priority. That said, this poll presents hopeful new evidence
that the Democratic electorate's change of heart combined with
historic Republican belief in the virtue of fiscal responsibility
could lead to a more far-sighted national fiscal policy.
The aging of the baby
boomers is a problem that could have been predicted six decades
ago. Delay in dealing with it has made funds scarcer during a
war on terror and a massive rebuilding of the Gulf Region. Political
leaders could do worse than take a cue from Mayor Bloomberg and
embrace not just the rhetoric but the reality of fiscal responsibility.
It may not be an obvious heroic posture for an elected figure,
but it is moral as well as practical politics - because it is
rooted in a sense of generational responsibility. And that is
the standard by which all government action should be judged.
John
Avlon is a columnist for the New
York Sun and the author
of Independent
Nation.
