Chicago had better win the national competition to have one of its neighborhoods designated a federal Empowerment Zone.
The way it looks, that new program may be the last federal aid to cities for a long time.
If Congress is serious about passing a balanced budget amendment to the U.S. Constitution, there may not be any federal aid to cities by the end of the decade. Not for community development. Not for mass transit. Not for the education of low-income children.
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Those are what the budget writers call “discretionary” programs. They will be the first to go if Congress forces itself to balance the budget by decade’s end, as is called for in a proposal sponsored by Sen. Paul Simon (D-Ill.).
Mind you, there’s nothing in Simon’s proposal that orders urban aid to the chopping block.
If fact, Congress wouldn’t have to cut a single program if it were willing to raise taxes by $250 billion a year by 2001. But that’s not going to happen. Nor should it.
So it’s a matter of what programs are to be cut: the relatively small “discretionary” programs such as aid to cities, or the huge and fast-growing “entitlement” programs such as Social Security and Medicare?
Eventually both types will have to be cut, because even if all the discretionaries were zeroed out, the cost of entitlements is growing so fast that the budget will never be balanced unless they, too, are cut.
In a more rational world the discretionaries and the entitlements would be reduced evenly, over time. But that’s not going to happen.
Ask yourself: Would you be willing to forgo your Social Security benefits if your retirement income exceeded $40,000 or some other “needs test” threshold? Or give up your income-tax deduction for the interest you pay on your home mortgage?
Of course you wouldn’t. Neither would I.
That’s why federal aid to cities is about to go the way of the dodo. The political clout in this country resides with the middle class, and while we hate to see anybody suffer, it will be a chilly day in hell when we give up entitlements we’ve supposedly paid for and planned our lives around.
The cities and the poor folks who live in them are going to take it in the neck regardless of whether Congress passes, and the states ratify, a balanced budget amendment. The deficit cannot be allowed to grow at its present rate, reaching 20 percent of our gross domestic output by 2020. That’s the road to ruin.
The Clinton administration doesn’t want to be straitjacketed with a balanced budget amendment. But it has acknowledged the problem in two successive annual budgets that, for the first time in a long time, cut the size of the annual deficit. Not cut the cumulative national debt, but cut the rate of its growth.
People who worry about cities should take a hard look at how Bill Clinton, the New Democrat, accomplishes this feat-by cutting the discretionaries, not the entitlements.
Listen to Frank Shafroth, veteran budget-watcher for the National League of Cities:
“By not taking on federal entitlement spending-which, when combined with interest on the national debt-now consumes about two-thirds of the federal budget, the (Clinton) budget ensures increasing federal deficits before the end of the decade and further pressure to cut investments in education, safety, community development and public infrastructure . . . in effect, cities are being asked to pay the price of federal budget restraint.”
Clinton does call for increased spending on certain favored programs, such as Head Start and job training. But for every addition there is a deletion: $16 billion in discretionary cuts overall in the ’95 budget, including urban programs such as public-housing upkeep and home heating subsidies for the poor.
And, as Shafroth points out, the cutting has just begun, balanced budget amendment or no balanced budget amendment.
Which is why Chicago had better win that Empowerment Zone contest.
Only five big cities will be chosen, and New York and L.A. are considered locks. The winners each will get $100 million in federal grants, plus generous employment tax credits for companies that start up in, or move into, a zone.
A lot of people say the zones won’t do much good, that no amount of federal incentives will bring employers back to the inner city.
I think there’s a chance they will work . . . the last chance.