The Greatest Generation survived a depression, fought a world war against three major military powers, rebuilt Europe, and profoundly invested in its children—creating an infrastructure of transportation, parks, water development, generously provided safety net for children, and public education that was the envy of the world. We, their children—today’s Boomer adults—are not passing it down the line. Our legacy appears to be the disassembling of this historical commitment to children. California reflects some of the hallmarks of this self-indulgence—a jurisdiction whose adult generation has gained uncommon wealth and comfort from the investment of our predecessors. The manifestation of generational self-indulgence has taken many forms:
■ Child poverty is increasing and the public safety net is being withdrawn in a seriatim pattern of strangulation. One generation ago, the basic safety net of Temporary Aid to Needy Families (TANF) and food stamps approximated the federal poverty line in California; it has since fallen to now approach 50% of that benchmark. The federal poverty line itself represents less than one-half of the California Budget Project’s calculated “self sufficiency” budget for California.
■ California has one of the lowest levels of participation in federal food stamps in the nation—as its state government gives those who need food help little priority—even when the funds to provide it are entirely federal.
■ Many of the candidates running for office are threatening to eviscerate the meager TANF safety net remaining. They apparently do not understand (or care) that not only are the levels record lows, but parents are barred from help for themselves or their children unless they are looking or preparing for work—and parents face a five-year lifetime limit on help. And they will not mention in their demagoguery that 75% of the recipients are children, or that most of the parents are working or looking for work in a bona fide fashion. Nor will the media—now dominated by five-second sound bites and celebrity reporting—likely call them on their deceit and hypocrisy.
■ Our current Governor is willing to cut child care assistance radically. This is the Governor who sponsored an initiative to increase after-school child care. The needle in our political spectrum has moved into the extreme “self-indulgence” side, especially for older adults. Assistance for young, working poor families with children is especially lacking. Ironically, many of these folk followed the rules and are now working and need child care help to keep working, or to find a job in a state with double digit unemployment.
■ Despite the passage of federal health reform legislation in early 2010, almost one million California children lack basic health care coverage, while coverage for the elderly (who cost seven times as much each) is universally assured. Indeed, the state General Fund was unable in 2009 to provide even the one-third state match for new child enrollment in Healthy Families, and has had to expropriate funds intended for other purposes—including the fund approved by voters to help children ages 0 to 5. For families whose children remain uncovered, this means little preventive care and reliance on emergency room care—with billing at three to five times the cost paid by private and public insurers. An operation and short stay in the hospital means financial ruin for working poor families. Taking a child in for treatment continues to feed the largest source of personal bankruptcy in the state—collection of medical bills.
■ K–12 education investment is in sharp decline. The state has dropped to 47th among the 50 states in per pupil spending—and class sizes now fall to 49th, with thousands more teacher lay-offs threatened.
■ Higher education fees and tuition are at record levels as state officials, eschewing evil “tax increases”, make an exception by increasing higher education tuition (as well as increasing fees for child care and foster care licensure). Federal Pell grants have now fallen to a small fraction of annual tuition. College kids now graduate with unprecedented debt. The State CalGrant system has similarly not kept pace with higher education costs for the students covered. And symptomatic of the overall malaise, higher education capacity is being slashed. Fewer youth will have a chance at college, at any cost. Once the pride of the nation, the state’s public and higher educational systems have declined markedly.
All of the above are apart and beyond the state’s imminent evisceration of public investment in order to close a budget gap now reaching $20 billion per annum. Reciting these developments in repetition of previous warnings risks the appellation of “chicken little” false alarmism. Except that the sky, while it has not fallen, is in point of fact demonstrably darkening for children.
The federal stimulus package protected the state somewhat in 2009. But it is not in prospect for the last half of 2010 or for 2011. And even as to remaining federal matching funds in accounts for safety net and health coverage, will the state be able to provide its share? That is increasingly in doubt.
But it is more than an immediate problem. It is an extended and evolving failure of generational performance—an unprecedented accumulation of obligation by one generation for its care and comfort imposed on those who follow it. Former U.S. Comptroller General David Walker published a book in 2009, Come Back America. Much of its data is regrettably confirmed by non-partisan sources. Medicare, Social Security, and the federal budgetary debt are now projected to total over $50 trillion in unfunded liability for the next generation—those now being born. Rather than diminishing it, he projects that we are adding $1 trillion a year to that daunting total. And it now appears that his numbers have been overly conservative. We have promised the current group of elderly a set of benefits that vastly exceed their contribution to its financing. California is perhaps the worst offender nationally; it has added to the national total of $50 trillion owed to the two major elderly accounts and the budget deficit additional sums at the state and local level. Through the ubiquitous “defined benefit” format of current public pensions, California adds to the nationally determined total with high unfunded liability for state workers, school district teachers and employees, and city and county personnel. The City of San Diego alone has a $2 billion unfunded public pension liability. Teachers and special district employees, and even utility retirees have piled up substantial pension deficits for our children to pay. Many public employees are now able to retire at age 55—or younger—at full salary. The demographics not only of longer lives, but of smaller families, means that far fewer young will be available to support a relatively larger population of our elderly.
The related problems of the Southern European welfare states (Greece, Spain, Italy, Portugal), politically dominated by public employee unions, may well presage our own fate.
Indeed, how ironic it is that the major source of current security for the United States, as our obligations begin to mount, is the full faith and credit from the People’s Republic of China, a totalitarian regime. Our officials rightly warn of the pitfalls of dependency on Middle Eastern nations and the OPEC cartel, but less attention is paid to our supine posture before a communist regime with nuclear weapons—that is now our largest national creditor.
What is the scale here of deficits and unfunded obligations? How much is $50 trillion—a conservative projection given the power of the organized elderly and advances in joint and organ replacement, and in extended life, and our exclusion of public employee pensions? One trillion is substantially more than one million dollars deposited every day from the time of Christ to the present. To carry this understated sum of $50 trillion at a modest 4.5% (not to pay any of it off), our grandchildren will have to pay over $20,000 per family in current dollars. That is almost one-half of median family income before taxes. Although Nobel Economist Samuelson is talking about it, few others are. In fact, the problem has been clouded by the anti-government, anti-deficit demonstrations of the “tea party” movement, which has contaminated this legitimate and compelling critique with demagogic ramblings, class warfare rhetoric and tribalistic partisanship.
Even if the media were attuned to a problem that is gradual and long range, political influence factors favor the elderly. At the federal level, AARP spends 28 times as much on lobbying as do all child advocates combined ($28 million versus just under $1 million). The elderly vote heavily, and the median age of large campaign contributors is over 68 years of age.
Instead of taxing us at levels approaching those contributed by our parents, we Boomers in California are complaining about our rather average burden, including property tax levels that are among the lowest in the nation. And to exacerbate the disinvestment, those property taxes are slanted to allow our adult generation a cross-subsidy from the young. Those property taxes are an ad valorem tax (Latin for a tax on market value). But we have substantially frozen real property at just above 1977 levels for us older folks, while assessing those who start new businesses or buy new homes at current market rates. That means that the young commonly pay five or ten times what Boomers pay in taxes for the same public services. The Proposition 13 limitation of taxation to 1% of a property’s value is not the problem—instead, it is how it is assessed on dishonest market value bias, taken by one generation from the next. This practice stands as a rather naked violation of the American tradition of fairness and intergenerational equity. The exploitation of our young by the Boomers in our state is not only unquestioned, any criticism of the arrangement is considered political suicide—and that judgment is one of the few bi-partisan agreements extant.
California represents one of the wealthiest jurisdictions on earth. It is locked into paralysis borne of a deep and abiding generational flaw, and of three antidemocratic structural problems that exacerbate it:
▸ Both parties have gerrymandered the state to minimize competition, concentrating anti-state zealots in about 20% of the state’s legislative districts;
▸ Unlike almost every other state, California requires a two-thirds vote to enact a budget; and
▸ The Republican caucus, curiously eschewing their “individualism” ethic, adopted a rule binding all to vote with its majority. Hence, 18% of the most radical representatives block child investment—a greater affront to democratic values than the often criticized 40% required to block action in the U.S. Senate.
The sacrifice here demanded of California’s adults is trivial compared to our parents’ performance for us. The state can select from a relatively painless menu: tax corporations at a level typical of other states; eliminate corporate tax avoidance through locational dishonesty; tax alcohol at the level other states commonly assess; restore the longstanding 2% vehicle license fee improvidently reduced after more than 20 years and producing $5 billion per annum we are now losing; and/or examine closely the nearly $50 billion in tax credits, deductions and exemptions that currently exist (which are not examined annually—or ever—and require a two-thirds vote to end). Want more options? Apply sales taxation to professional services; tax internet sales and allocate to states; and/or reform property taxation by assessing all property at actual value—perhaps reducing the 1% of value tax limit to ½ of 1% in the bargain.
Importantly, the 2001/2003 federal tax cuts gave California’s wealthy class $37 billion per year in additional income. Some combination of the measures listed above to recapture about one-third of this amount would retain most of the tax subsidy while (a) eliminating the state deficit; (b) allowing the state to capture federal matching funds otherwise foregone; (c) restoring safety net protection and educational opportunity; (d) medically covering the state’s children (as every other civilized nation accomplishes); and (e) allowing spending decisions to be made at the state level consistent with stated conservative principles of federalism.
But the problem is more complicated than the structural ability of a small minority to determine allegedly democratic outcomes. The Republican philosophy does have some important messages to impart about the limitations of government, the importance of outcome measurement and accountability of agencies, the need to use market and self-regulating forces rather than “top down” dictation of policy by public authority, the tendency of Democrats to sequentially expand a social service establishment by hiring more and more public employees, and the failure to demand personal responsibility.
The last element purportedly a part of conservative concern includes the most momentous decision human beings make—to create a child. That message is in particular order where unwed births rise from levels of 8% a generation ago to 40% today—with most of the involved children living in poverty amidst a collapsing safety net. Interestingly, the children of married couples live in families with median incomes well above $50,000, not 50% more or double, but about five times the family income of their contemporaries born to unwed mothers. The poverty from unwed births is driven by improvident sexual license, contraception ignorance, and paternal abandonment. Absent fathers of such children pay an average of less than $60 per month per child, and almost half of that money goes to state/federal accounts as TANF compensation. Regrettably, it is considered politically incorrect to talk about such things by both parties.
But the Republicans have largely surrendered these laudable principles. Instead of a partnership for children, where they back child investment conditional on this list of defensible principles, they have surrendered them in order to win from Democrats an ongoing public disinvestment in children. They dare not offend the elderly—the welfare state there is sacrosanct. Personal responsibility is not demanded—they will just remove the safety net for the kids. And people do not pay their own way, they steal from those who follow. There has been an implicit deal struck that allows each party to essentially sacrifice its laudable pro-child agenda in return for the excision of the other party’s counterpart. There has not been a “contract with America” by public officials, but an undiscussed “contract on California’s children” by both parties.
— Robert C. Fellmeth
Price Professor of Public Interest Law, University of San Diego School of Law
Executive Director, Children’s Advocacy Institute
About the Author:
Professor Robert C. Fellmeth
is a tenured law professor at the University of San Diego (USD) School of Law and Founder and Executive Director of the USD Center for Public Interest Law
and its Children’s Advocacy Institute
. He is the holder of the Price Chair in Public Interest Law at the USD School of Law, one of two such chairs in the nation. In 1997-98, he was honored for his “outstanding, balanced, cumulative career contributions supporting the mission and goals of USD.”
A graduate of Stanford University and Harvard Law School, Fellmeth was one of the original “Nader’s Raiders,” organizing the student groups in 1968 and directing the Nader Congress Project in 1970-72. As a deputy district attorney and Assistant U.S. Attorney in San Diego from 1973-81, he litigated 22 antitrust actions and founded the nation’s first antitrust unit in a district attorney’s office.
He currently chairs the board of directors of Public Citizen Foundation, is a member of the boards for both the National Association of Counsel for Children and First Star, and is counsel to the board of Voices for America’s Children. He has served on the board of directors of Consumers Union and California Common Cause.
He has taught at the National Judicial College, the National College of District Attorneys, and the California Judicial College. He has authored or co-authored 14 books or treatises, including The Nader Report on the FTC (Baron, 1968), The Politics of Land (Grossman, 1970), California Administrative and Antitrust Law: Regulation of Business, Trades and Professions (Butterworths Legal Publishers) and California White Collar Crime (LEXIS Publishing). His latest treatise is Child Rights and Remedies (Clarity Press, 2002), a text on child advocacy.