June 30, 2000
By Jerome DeHerrera
Last week President Clinton announced that the federal budget surplus for this year will be $224 billion dollars, and if the current economic forecast prove true, the surplus for the next ten years will be $4.2 trillion dollars. These dramatic numbers should force Latinos to look at our community's needs when choosing a presidential candidate.
Of the total surplus, everyone agrees the $2.3 trillion from Social Security receipts will only be used to strengthen Social Security. The remainder $1.9 trillion would be available to other programs, a very impressive amount.
Presidential candidate, George W. Bush proposes using $1.6 trillion of the $1.9 trillion for a tax cut. He also proposes increasing spending to expand health care coverage, to improve education and to build a missile defense system projected to cost more than $60 billion. If anything is left over, Bush would use it to reduce the national debt.
His opponent, Al Gore, proposes using $200 billion for a retirement savings plan, $430 billion for Medicare including a prescription drug benefit, $500 billion for targeted tax cuts for middle and low income families, and the rest for debt reduction.
Gore wants to use the tax cuts to expand the existing child care tax credit so that it is refundable to families who need it the most but do not earn enough to pay income taxes. Gore also proposes a refundable tax credit to pay for after-school programs, tax credits for health care insurance costs, and helping families with children in college by making as much as $10,000 of tuition tax deductible.
The two candidates' proposals present very different options for America and the Latino community. Bush plans to enact a large tax cut that will benefit today's tax payers. Gore also proposes a tax cut, but his is targeted to low-income families and education programs. Gore also intends to use a larger part of the non-social security surplus for debt reduction that will bolster Social Security and Medicare.
Under current law, by 2037, Social Security will no longer be able to cover full benefit payments and Medicare is expected to be in the same situation in 2025. These are important programs and unless their impending financial shortfalls are dealt with, future workers will bear a heavy burden.
In times of unprecedented surpluses, these programs should be fixed. There are two effective ways of using these large surpluses to deal with the impending problems of Social Security and Medicare.
One way is to pay down the federal debt and use the savings from lower interest payments to bolster Social Security and Medicare. In 1999, 14% of the total budget was spent on net interest, a total of $230 billion.
The other, and probably more important way to use today's surplus is to invest in the people who will be working in tomorrow's economy. This would include increased spending on education, child care, head start and health care.
Unless the problems facing Medicare and Social Security are tackled today while we have economic good fortune, workers in the future will be faced with higher taxes and future retirees will face cuts in benefits.
How the surplus is used will have a tremendous impact on Latinos because we are such a young and growing community. In 1999, 40% of our community 12.5 million was under the age of 19. Thus, decisions made today on how to spend the surplus will effect our young who will make up a larger share of tomorrow's workforce.
As the youngest and fastest growing group of Americans, Latinos should be the most interested in making sure that today's surpluses are used to make the investments that will serve us in the future.
Jerome writes a political column from Washington. Please send your comments to: firstname.lastname@example.org