Category Archives: Budget

Blog: Elephant Economics

Elephant Economics

By Mary Georgevich
February 14, 2011

Every time I see an article about the debt limit increase or the budget fights, I have to take a few deep breaths to calm down. To put it bluntly, this national conversation is stressing me out. So I decided to learn more background information about economics. (Because information is power, right?)

I attended a panel at the Urban Institute called What Policymakers, the Public, the Press, and Parents Need to Know About Economics… in 90 minutes or Less. The most important thing that I learned at this panel was that competing economic theories can sometimes both be true.

To explain economic theory to us, one panelist used the example of blind men checking out an elephant. One man feels the tusks, so he believes an elephant is hard, with sharp ends. Another feels the tail and thinks it is soft. Another feels the foot, and another the side. Each man is correct about how an elephant feels, but none gets the whole picture. Economists tend to see the elephant through the part they’ve studied, and though they aren’t necessarily wrong, they aren’t completely right either.

So how does this apply to the situation right now? Well, I think it underscores the fact that simply cutting taxes will not make the economic situation better. We need a wide variety of solutions, so we can try to cover as much of the elephant as possible.

The other important fact that I learned was that something that is good for an individual might not be good for the economy. For instance, if one person saves, that’s good for them. If everyone saves, that’s bad for our economy, which relies on consumer spending. Conversely, something the government does (like creating regulations) may be bad for one person, but good for the economy as a whole.

The things I learned at this panel didn’t necessarily make me feel calmer about the state of affairs in Congress right now, but it did help me feel better about my response to it. The national conversation is less about the economy than it is about the role of government in our country. But instead of engaging the question of what the government should do, Congress is just engaging the question of how much to defund it.

That won’t solve any problems. It will just make the situation even worse for the people who tend to get trampled on by the elephant.

Blog: The Debt Limit Debate

Blog: The Debt Limit Debate

Casey Schoeneberger
Jan 19, 2011

As the 112th Congress gets into full swing, Republicans are positioning themselves to fight for unprecedented cuts in non-security discretionary spending in exchange for their votes to raise the debt limit. Despite Republican threats to bring government to a halt if an agreement is not reached, raising the debt limit should not garner concessions from President Obama or Members of Congress. It is not a move that anyone wants to make, but it needs to be done for the country to function and should not be used as a bargaining chip to obtain across-the-board cuts on non-security discretionary spending. The debt limit is expected to be reached as soon as March, and an agreement must be reached before then. Members of Congress are trying to turn the urgency of the situation into an excuse to threaten cuts to vital programs. While it is difficult to conceptualize what cutting billions of dollars from the federal budget would do, picture 21% cuts on Head Start, Family Violence and Battered Women’s Shelters or the Social Services Block Grant (which happens to serve as the biggest source of funding for the Child Protective Services System).

Raising the debt limit is a painful and necessary reminder that we need both spending cuts and revenue increases to care for our elderly, educate our children, and create infrastructure to remain competitive in the global economy. This is neither a game nor something to use for political fodder. As Americans who are affected by and care about these vital social programs (including something as basic as The Department of Education), we must not allow Congress to compromise the lives of children and the most vulnerable by these political games of “Uncle.”

Congress must be forced to bear witness to the reality that those cuts impose on people’s everyday lives. Making 21% cuts across the board is the easy solution for them. They neither have to dig deeper to see both the true spending and lack of revenue problem nor irritate any particular part of their constituency.

We must not allow these decisions to be easy ones for Congress. There are millions of Americans and hundreds of advocacy organizations in D.C and across the country ready to stand up to Congress and their careless decisions. Congress may believe that widespread cuts would not irritate any particular part of their constituency, but I happen to be particularly annoyed. I am annoyed at the lack of foresight some members of Congress show when speculating that double digit cuts could somehow be good for Americans who are still trying to pull themselves out of the hole the Great Recession dug.

Treasury Secretary Timothy Geithner stated that even if we do manage to return to 2008 spending levels (like the Republicans are proposing), the debt limit increase would only stand to be delayed for two weeks. Essentially, this compromise on spending cuts and the debt limit could threaten the safety net of millions of Americans and destroy essential protections for low-income Americans, so we can delay the inevitable for a few weeks of political victory. I know difficult decisions must be made, and we must start designing an America budget that pays attention to spending reductions – and revenue increases – but it would be unconscionable to put the weight of these spending cuts on the backs of the poorest and most vulnerable Americans.

We must ask ourselves where our priorities lie, and who needs to be protected during this prolonged, economic recovery. Our budget is a living, breathing moral document and one that dictates and says to all our citizens, including our children, where our priorities lie. Let’s show them and their parents that our priority is not just to rein in the deficit, but to give them a safe world to grow up in. And not a world where we are solely concerned with homeland security, but security of a different sort. The security to know that if you are willing and able, you will have the opportunity to get an education and go to college and Pell grants will be funded to help you get there. You, as a child, will not have to be denied food because of cuts to food stamp programs and you will have a place to sleep because it remained a priority to fund low-income housing. That when you grow up, you can feel confident  knowing that the Medicare and Social Security safety nets  will be there to protect your parents. Let’s be clear to Speaker Boehner, all of Congress, and President Obama, exactly where our priorities lie.

Blog: As the 112th Congress Opens

Blog: As the 112th Congress Opens

Marge Clark, BVM
Jan 12, 2011

Reflection on the first week of the 112th Congress is particularly difficult. The events of the week have tossed emotions across uneven seas. House and Senate members returned to Washington on January 5 for the swearing in, getting to know each other and finding offices. I was privileged to take part in a beautiful, hope-filled prayer vigil to initiate the work of the 112th Congress. Priests, Rabbis, Protestant ministers and Congressional leaders across party lines led us in Scripture, hymns, prayers and a reflection on the role of Congress in our time. What a positively inspirational commencement of this new Congress.

Hopes were lifted as advocates met and chatted about issue agendas and how they could work together on shared goals.Meetings were set up, visits to new members discussed. Leaders of the majority and the minority spoke to their desire to cooperate with those “across the aisle.” There were references to the progress in bipartisanship which had brought such great progress in the not-so-lame-duck session.

However, with each new Congress come apprehensions as well as hopes. The 112th is no different. Apprehensions heightened with House leadership vowing to control the deficit through huge cuts to non-military discretionary spending and repeal of the new Healthcare Act for which we (NETWORK staff and members) worked so hard.

And then, on Saturday, political violence moved from verbal to physical with the slaying and injuring of 20 people, including Rep. Gabrielle Giffords.  People had come together to interact with their Congressperson – to take an active role in governing – but the good of that event was suddenly shattered.  Whether there is a direct connection between the vitriolic language in the political arena in recent years and the shooting in Arizona is irrelevant.  The angry and violent references belittle us as a nation, reducing the trust and value placed in government – in many cases replaced by expanded valuing of financial security for those with the greatest power, and those who wish to be in that position.

Revised poverty data indicate that greater than 20% of our children live in homes below the poverty threshold, with 25% of children in food-deprived homes. These statistics don’t seem able to improve in a nation with almost 10% of our workers unemployed, and with far more underemployed or having given up the job search. Yet, these children and their families are a part of us.  We bear responsibility for their ability to live in dignity.

So, hopes and apprehensions – the yin and the yang – keep us alert, and hopefully in balance.

Blog: Shocking Poverty Statistics

Blog: Shocking Poverty Statistics

Mary Georgevich
Sep 16, 2010

Today, the United States Census Bureau announced the poverty statistics for 2009. The numbers are pretty shocking for me: 43.56 million people were living in poverty in 2009. It’s the largest number that they’ve measured since this data has been collected (they started measuring this in 1959), and it’s a 1.1% increase over 2008’s numbers. Living in poverty is defined as a family of four who makes less than $21,729 a year.  At NETWORK, we knew this bad news was coming. For a couple of weeks now, we’ve been bracing ourselves for the worst. But it’s important to remember that these numbers are telling us about history. There are thousands of non-profits out there that have been witnessing the personal tragedies of these numbers every day since the start of this recession.

The recession hit these programs with a double whammy: dried up funding (from governments and private donors) and increased need. I witnessed this personally at the end of 2009 and most of 2010. I was working for a gang intervention program in Los Angeles called Homeboy Industries. It’s an amazing organization, run by Greg Boyle, S.J., that offers many services completely free of charge including tattoo removal (the most popular service), counseling, twelve step meetings and even a charter high school. And most importantly – especially during this recession – they employ hundreds of men and women with barriers to employment and help train them to do various types of jobs. This is an especially important part of Homeboy’s service because not only does it offer a sense of purpose to many people looking for a reason to hope, but it is a place to go every day, a shelter from the streets. Like their t-shirts say, “Nothing stops a bullet like a job.”

Well, during this recession, gang members are a group of people that have been disproportionally affected by the unemployment rates. Whereas University of California graduates are underemployed, California Department of Corrections graduates tend to be unemployed. This year, Homeboy Industries found itself drowning in the demand for employment. Funding just couldn’t keep up with the need, and as a result, Homeboy laid off most of its employees in May (about 300 people, including Fr. Greg). They raised some money right away and hired back about 100 employees, but the program is operating as a shadow of its former self. And that is a tragedy for the city of Los Angeles.

This is why the social safety net is so needed right now. Homeboy Industries keeps people out of jail. It is a community, a source of hope for thousands of people in Los Angeles. While programs like Food Stamps, the TANF emergency fund and Section 8 housing (to name a few) don’t solve the problem, they can provide support for programs like Homeboy which are on the front lines battling against the disillusionment that accompanies poverty and marginalization.

When I hear that 29.9% of single mothers are living in poverty, I picture the line cook in the Homegirl Café who won’t be able to move her daughter out of an unhealthy home environment until Los Angeles is able to work through their Section 8 waiting list and start accepting new applications again. And when I see that there were 1.4 million more children living in poverty in 2009, I think of the teenager who was working his way out of the cycle of poverty when he was shot and killed Thursday morning. I think that’s important-that when we look at these numbers and we read the news reports detailing how bad this makes the Democrats or Republicans look, we try to remember who these numbers are actually affecting.