WASHINGTON, DC – When economists discuss “fiscal adjustment,” they typically frame it as an abstract and complex goal. But the issue is actually simple: Who will bear the brunt of measures to reduce the budget deficit? Either taxes have to go up for some people, or spending must fall – or both. “Fiscal adjustment” is jargon; what austerity is always about is the distribution of income.
Much of Europe is already aware of this, of course. Now it’s America’s turn. And current indications there suggest that the people most directly in line for a fiscal squeeze are those who are least able to defend themselves – relatively poor children. For example, the current budget sequester (that is, across-the-board spending cuts) is already hurting programs like Head Start, which supports pre-school education.
The American comedian Jimmy Kimmel recently poked fun at his compatriots’ lack of fiscal knowledge by asking pedestrians on Hollywood Boulevard what they thought of “Obama’s decision to pardon the sequester and send it to Portugal.” The segment is hilarious, but also sad, because the impact on some people’s lives is very real. Around 70,000 children are likely to lose access to Head Start on our current fiscal course.
And much larger cuts are in store for early-childhood nutrition programs and health care. Perhaps most shocking are the dramatic cuts to the Medicaid health-insurance program that the House of Representatives’ Republican majority have embraced in their latest budget proposal. Paul Ryan, the chairman of the House Budget Committee, proposes to balance the budget over the next 10 years largely by slashing the program. About half of all people covered by Medicaid are children.