America’s Future in Global Economy: This Week’s Words and Deeds

Obama in MinneapolisOn Monday, the same day the White House was finalizing its $900 billion tax deal with Republicans, the President gave an important address at a vocational technical school in North Carolina.

It was his clearest statement yet about the challenges America faces in the global economy. The United States has gone from 1st to 9th place among nations in the percentage of its population that graduates from college, he noted. We now rank 24th in the portion of our children who have a high school degree. Our infrastructure is crumbling.

“The most competitive race is between America and our competitors around the world,” he said. “In the race for the future, America is in danger of falling behind.”

But the President’s tax deal makes it harder for the United States to get back on top. By extending the Bush tax cuts to the wealthy, shrinking the estate tax, and freezing discretionary spending (on everything except defense), he’s leaving almost nothing for education and infrastructure.

And by embracing deficit reduction while agreeing to $900 billion in tax breaks — the lion’s share for the rich — he’s making education and infrastructure spending sitting ducks for a Republican congress intent on shrinking the size of government.

Robert ReichThe states — many of them broke — are still firing teachers, doing away with pre-school programs, and raising tuitions and fees at public universities. And now that the stimulus is about over, there won’t be any more money to rehabilitate the roads, bridges, sewers, and energy systems that are still falling apart all over America.

“We can win the competition,” the President said, Monday. His words were inspiring. But his deed that day, approving a tax deal that continues George W. Bush’s fiscal policies, makes that goal harder to achieve.

Robert Reich

This article first appeared on Robert Reich’s Blog. Republished with permission


  1. in_awe says

    Interesting perspective – here is another:

    – appropriated money for things like highways and infrastructure or education get diverted to other programs or purposes or remains unspent

    – As of April 2010 $36B of $100B allocated in the Stimulus I bill for retaining and hiring teachers remained unspent.
    – For years the absolute number of administrative staff and the ratio of administrative staff to teachers has risen even as enrollments declined in many school districts.
    – Since 1985, inflation-adjusted federal spending on K-12 education has increased 138 percent. Since the 1970s, math achievement has increased slightly, reading achievement has stagnated, and graduation rates have remained at about 73 percent nationally.
    – LAUSD just built a high school that cost $800MM+ to serve a few hundred kids while elsewhere in the district kids are being taught by incompetent teachers. And how many teachers who receive the lowest possible ratings are bounced from school to school or to the “rubber room” holding area where they report daily for years at a time to do exactly NOTHING while receiving full pay and benefits because they “can’t be fired”?
    – In 2010, the DOE employed 4,199 full-time employees. President Obama’s FY 2011 budget request projected full-time employment to grow to 4,603 raising the cost of salaries and expenses at the DOE to $1.83 billion—$344 million more than 2010 levels—a 23 percent increase. The average salary for DOE employees (excluding top managers) is $103K. Now I am certain ever single one of those new people are absolutely necessary and will dramatically reverse the direction of our nation’s schools.
    – Throwing more money at programs that are demonstrably failing while canceling programs that work – all to keep teachers unions happy is insanity.

    – 38% of Highway Transportation Fund spending paid for by federal fuel taxes is for non-highway purposes. If you shut those expenditures down you gain an immediate 50% increase in spending on highways with no new taxes. Just how important is spending of highway dollars for including bicycles, discouraging racial profiling, historic covered bridges, community preservation, innovative finance, and Safe Routes to Schools? What about the $2MM uncrossing in FL for turtles?

    What about infrastructure dollars paying for mandated Metropolitan Planning Organizations—whose focus is shifting from transportation to land use planning, lifestyle issues, and economic development?

    The list could go on. Sure, some of those diversions go toward “good” purposes – but only at the cost of maintaining our schools or highways and bridges, etc. But Congress has been unwilling to take up or down votes on those programs so they just surreptitiously siphon funds off sources like the Highway Trust Fund and then complain about how we aren’t spending enough on highways!

    More transparency on budgets and allocations and diversions would be very enlightening for the public – but that would make the job of Congress and the administration (whoever is in the WH) harder, so don’t hold your breath.

    Most conservatives don’t gripe about paying taxes – they gripe about programs that don’t work or employees that don’t work or featherbedding or pay scales that are in excess of the private sector pay for the same work. And the ruling class in DC can’t ever see anything that can be improved or fixed except where it requires more tax revenue. Freeze all federal spending for 5 years, clean up the waste to save the “good programs” then Reich can start griping again.

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