Sen. Pat Toomey, R-Pa., recently commented on "the negative, unintended consequences" of welfare initiatives that he called "transfer-payment programs." He said, "We've had huge increases in funding for these programs, and the net effect now is that there are people who discover that the government will provide food, shelter, health care, education, transportation, cash, a very long list of all the things you need, as long as you don't work very much, you don't make very much." The Philadelphia Inquirer noted that Sen. Toomey's comments came months after former Gov. Mitt Romney's famous remarks about the "47 percent" of Americans "who believe that they are entitled to health care, to food, to housing, to you name it."
Yet from 1979 to 2007, the top 1 percent of households received a 300 percent increase in government benefits; those of the poorest 20 percent decreased by a quarter. It is doubtful that the wealthy were less incentivized to work because of their three-fold increase in governmental assistance; why are less fortunate Americans viewed differently?
Leaders must address our debt and must reduce spending to make our future fiscally sustainable. But what we need is pragmatic discussion grounded on facts, not stereotyped characterizations of what drives different sets of Americans.
The fortunate 1 percent should not be demonized as being greedy because of their success, nor should the less fortunate be portrayed as unwilling to strive for a better life. Families with children stay in subsidized housing an average of only three years (the elderly and disabled are most of those subsidized) before no longer needing it. Meanwhile, the top 1 percent admirably do more volunteer work and give more to charity than the remaining 99 percent. It's like Winston Churchill said, "If we are together, nothing is impossible."
Assumptions that one subset of Americans is avaricious while another is less aspiring hinder the creation of thoughtful policies. Rather, we should just look at the facts.
For instance, 7,000 business leaders recently cited the decline in skilled labor as undermining American competitiveness. Since U.S. spending on labor training is the lowest among high-income, developed economies, should we make the top .1 percent pay to "fix" this problem? After all, their average federal income tax decreased 40 percent over the past half century while tax rates for the bottom 99.9 percent remained constant. On the other hand, with the Government Accountability Office concluding that 47 skills-based training programs, spread across nine different government agencies, lack oversight and waste tax dollars, why should we invest in them?
What's needed is accountability for results. In this case, most of the training programs that show measurable success are run by state and local agencies -- not the federal government -- with strong private sector involvement. They are organized to serve the needs of their local labor markets and populations.
There are three larger points. First, the federal debt is not the only underlying challenge to our economic future. As a military man, I have always viewed education as our "homeland defense," yet 7,000 business leaders have told us we will badly damage our competitiveness if we do not deploy a larger skilled force of workers. As the admiral overseeing the Navy's "CEO" $350-billion-dollar warfare requirements programs, I regarded small businesses as a force multiplier because of their ingenuity in innovating products and their creation of 60 percent of new jobs. Now, this force multiplier has been cut in half, as there are less than 18 new startups for every 10,000 citizens today, not the 35 when I was in the Navy.
Second, we need to reduce our debt while addressing our other competitive challenges. The bipartisan Simpson-Bowles National Debt Commission gave us a thoughtful template: $2 of spending cuts for every dollar of tax revenue for the first $4 trillion of debt reduction this decade. It also outlined an overall economic battle plan, from the training of a competitive workforce, to investments in needed infrastructure, to tax and regulatory reform, all of which can help unleash the job multiplier of small business entrepreneurship.
Third, our leaders should not characterize any subset of Americans as anything but "Americans" who seek to work and excel. We must approach our common challenges in a unified, not a divisive, way.
Joe Sestak is a former Navy admiral and Democratic member of Congress (www.joesestak.com). He ran against Sen. Toomey in 2010 and has expressed an interest in running for state or federal office again.