Published Online: November 22, 2011

Commentary

The 'Supercommittee' Fails Kids, Too

The wolf is at the schoolhouse door.

Charles L. Schultze, a former chairman of the Council of Economic Advisers, decades ago suggested that federal debt would either cause an imminent mortal threat to the U.S. economy, like a snarling wolf; long-term economic deterioration, like “termites in the woodwork”; or, least plausibly, no real danger, like a “domesticated pussycat.”

Now that the Nov. 23 deadline will pass without the ludicrously conceived congressional “supercommittee” reaching a meaningful debt-reduction agreement, what does this mean for K-12 education?

Any scenario is likely to harm our already fiscally wounded public schools. Although federal education cuts, if any, may be minor, there will be no more of the $100 billion in stimulus dollars that were channeled to states between 2009 and last June to bolster K-12 budgets, and none of the $30 billion proposed for that purpose in President Barack Obama’s effectively defunct jobs bill. In fact, many seemingly tough Washington deficit-cutters just want to shift more spending burdens onto the states.

"States and localities are chopping billions in K-12 public school spending this year, even though enrollment, not surprisingly, is up nationally by about 260,000 students."

States, which already were cutting during the years of federal stimulus, are now being hammered. While the Obama administration claimed that the stimulus preserved 275,000 education jobs in the third quarter of 2010, about 211,000 jobs are being eliminated because of state cuts this year, the Nelson A. Rockefeller Institute of Government recently estimatedRequires Adobe Acrobat Reader. State budget cuts “will hit education, health care, and other state-funded services harder in the 2012 fiscal year—which started July 1, 2011—than in any year since the recession began,” according to the Center on Budget and Policy Priorities, or CBPP. At least 46 states are reducing services for residents, hitting children and the most vulnerable especially hard.

States and localities are chopping billions in K-12 public school spending this year, even though enrollment, not surprisingly, is up nationally by about 260,000 students as private schools move further out of reach for many families. Spending for school libraries, textbooks, after-school programs, physical education, arts and other elective classes, and programs for gifted, needy, and other targeted populations have been reduced in state after state. At least 120 districts have gone to four-day school weeks, school funding is down by approximately one-quarter since 2008 in South Carolina, Arizona, and California, and 23 of the 46 states for which data are available cut per-pupil spending by 5 percent or more, the CBPP reports. Pennsylvania’s 10 percent, $900 million education budget cut this past summer resulted in larger class sizes in 70 percent of the state’s school districts this fall.

The K-12 education cuts in 37 of 46 states with available data have eliminated many school programs, resulted in significant teacher layoffs, and created crowded classrooms for burned-out teachers who remain. Pre-K programs are being cut across the country, and in places such as Keller, Texas, students now have to pay to ride school buses. In my son’s high school, I was recently told not to bother a counselor with something that was part of her job description because her salary had been cut by 17 percent.

The cuts also are stifling reform efforts to improve teacher quality, school and college readiness, and low-performing schools. As U.S. Secretary of Education Arne Duncan said in Senate testimony last year, “It is very difficult to improve the quality of education while losing teachers, raising class size, and eliminating after-school and summer school programs.”

To make matters worse, states and localities are hamstrung by structural budget problems that the federal government doesn’t have. Every state except Vermont is constitutionally mandated to balance its budget. Local governments also derive much of their revenue from property taxes, which foot a sizable proportion of the bill for K-12 education, and which have plummeted as housing values have crashed since 2007; in the second quarter of this year, property-tax revenues were down by 1.8 percent, the U.S. Census Bureau reported.

But many state legislatures and governors are at least trying—making difficult budget cuts and raising taxes—in a way that should shame their counterparts in the nation’s capital. Combined state budget shortfalls of $430 billion for fiscal years 2009 through 2011 already have been closed by states using spending cuts, federal stimulus money, revenue increases, and withdrawals from reserve, or “rainy day,” funds, according to the CBPP. Overall increases in state tax collections have contributed to a 10.8 percent growth in revenues during the second quarter of this year, according to the Rockefeller Institute, which has helped pay teachers and cushion the cuts in poorer school districts.

Instead, in Washington, we have the spectacle of lawmakers paralyzed, as they were over the debt ceiling during the spring and summer, and have been for so many years. “Rarely in peacetime has a single issue dominated politics the way the budget deficit is doing now,” The New York Times reported, but that was written 22 years ago! Time keeps slipping away, but we can’t keep punting the issues of reducing deficits, while ensuring adequate education funding, for another generation.

For much of the time since 1989, we had the benefits of a growing young and middle-aged labor force, a post-Cold War peace dividend, and a rapidly rising China that has loaned America $1.3 trillion. In the years ahead, we have an aging population poised to draw enormous Social Security and Medicare benefits, potentially squeezing education spending even more, while paying less in state and local taxes to fund public education.

We need comprehensive fiscal reform that prevents the United States from failing to reduce its debts and failing to meet its people’s needs. We needed it years ago, and we need it this week.

Without a supercommittee deal, “automatic” 10-year, $1.2 trillion cuts to the Defense Department and domestic agencies are supposed to be triggered. More likely, the alleged doomsday trigger will turn out to be a paper tiger much like the dear departed Gramm-Rudman-Hollings deficit-reduction mechanism of the late 1980s, since the committee’s escape hatch gives Congress 13 months to modify the law.

If all we get is a paper tiger, what more fearsome animal is likely to appear?

Most economists have long subscribed to the “termites” school of thought, but many have been sounding more alarmist. A few years ago, Federal Reserve Chairman Ben Bernanke already warned that “the longer we wait, the more severe, the more draconian” the problems will be.

As we’ve seen in Greece and Italy, the termites can be quickly supplanted by the wolves. But who is there to keep the wolves at bay? Pontificating pundits and politicians? A disgusted populace that gives Congress single-digit approval ratings, but is not yet really aware of the potential consequences? Certainly not America’s 50 million schoolchildren, who will be among the biggest losers. The real kick may come from the ratings agencies.

If they do downgrade U.S. debt because of Washington’s failures, who will continue to buy our Treasury securities? The Chinese, Japanese, and other foreign lenders, who hold $5 trillion in federal debt, may just decide that their domestic investments in infrastructure and education are paying a better dividend. It can’t be a coincidence that China—or, at least, Shanghai—has vaulted to the top of international K-12 performance comparisons, as much of U.S. education continues to founder.

Vol. 31, Issue 13

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