Whose Priorities? Teaching the Budget Process

It's been a long time.  I've been working on new things that I hope will play out well here.  This is something that Rethinking Schools didn't get back to me on, but that could work anywhere that has students facing cuts to the things that make their lives function in any vaguely proper way.  

During a brief lunch break, I found myself eating a peanut butter sandwich with one hand and using the other to play around with “Budget Puzzle: You Fix the Budget,” a New York Times interactive article challenging readers to balance the Federal budget by selecting from a list of various cuts and taxes.  With surprising ease, I found my budget with a several billion dollar surplus just as two students wandered into my room.  I pointed out my success to them, unsure if they knew exactly what “balanced the Federal budget” meant.  I should’ve known better.  One student excitedly asked how I had done it and another suggested that I send it in, as if the solution to our nation’s funding problems was as simple as just moving numbers around until we can figure out the right answer. 

            I was struck by their assumption that budgets are essentially benevolent documents that just sometimes don’t have room to provide for everyone’s needs.  In the Bronx, where I teach, budget cuts in education and services for working people are common, ranging from reduction in housing or food aid to the constant threat of teacher layoffs or the elimination of free Metro cards for students.  Still, students assumed that cuts like the ones they were experiencing must be happening everywhere, to everyone.  After all, why would services in their neighborhoods be reduced at a disproportionately high rate?

            These types of assumptions were exactly the sorts of things that I wanted to target by teaching about the budget process.  Even though austerity measures are being pushed through in Europe and across the United States, it is simply not the case that cuts to the services that working people are paying for are unavoidable.  By looking at all of the choices on the table and seeing that domestic spending and so-called “entitlement” programs (a disparaging term that should be fought against whenever possible) are not the only places where spending can be cut, students came to realize that the pain of reductions are not being evenly spread by any stretch of the imagination.  The benefits to teaching about the budget process didn’t just end with students coming to a realization that deep cuts in social spending were avoidable though; this unit allowed us to dig into the very deeply-entrenched ideas about how and why some people have more or less than others.

Starting with the Home

            The main problem that I knew I would have while teaching this unit was the dense lexicon of budget discussions.  To ease students into this, I started out with the simplest ideas of budget cuts, revenue generation, and income.  Although they were basic, starting with these three terms helped students break away from simply talking about saving, making, spending, or losing money.  Instead, they learned to see things in terms of costs, sacrifices, and working time.  If they wanted something, they had to generate the revenue to pay for it somehow.  If they didn’t want to be bothered with generating revenue, they had to cut something out of the budget.  The most concrete way to work with these ideas was the home.  Groups of students tackled hypothetical situations where families faced budget shortfalls and had to figure out how to make up the difference.  Predictably, this led to budget cutting measures like walking to work, getting rid of cable, and buying cheaper groceries.  It also less frequently led to the suggestion that families could generate revenue by selling possessions, find jobs for school-age children, or second jobs for parents.  Clearly, students had learned the lessons of hardship well.  The answer is always within the family itself, with every member following the Jurgis Rudkus maxim to simply “work harder.” 

            Not all students were so easily pushed into these answers though.  Some spoke out vehemently against the idea that they should have to cancel their cable because the landlord wanted to raise the rent or that they should have to work extra hours after school to help pay for a rise in the cost of their asthma medication.  They especially disliked the idea of eating cheaper food because of a parent’s wage reductions.  The general consensus among these students was that some belt-tightening was ok, but at a certain point budget cuts meant dropping below an acceptable standard of living.  Several went so far as to ask if there was a point to working at all if people had to do it while living without the basic comforts.  At the heart of all of these problems was one of the most important questions of the unit: Why do working people have to pay so much to so many different people, just to continually get littler and littler comfort in return?

What do we get from the government anyway?

            The question of working people paying out huge sums at every turn was also wrapped up in the one of the biggest (though most productive) hurdles that came from relating government budgets to family budgets.  While students knew that they didn’t like the idea of working hard every day just to scrimp on all the necessities of life, they also knew the anti-tax rhetoric that is all too prevalent among working people, and it came up immediately when we talked about financial hardships on families.  Why does the government need to take out so much? 

            This was a legitimate question, since looking at family budgets showed that a large percentage of money came out of checks and went to the nebulous idea of “taxes,” while other expenses like Metro cards and sales taxes also ate into monthly resources.  However, this provided the opportunity to look at all the benefits that come from tax revenue.  Of course students realized that taxes fed institutions like schools and the military, but they were surprised by other government-backed programs.  Like many Americans, students hadn’t given much thought to the fact that the initial development of the Internet came from tax revenue, as did parks, roadways, fire departments, water purification, bridge construction and upkeep – the list of things they hadn’t thought about coming from taxes was apparently almost endless.  Soon, students began asking why people would want to cut out funding for those things.  Suddenly, taxes and the budget seemed more tangible and important, since they were linked to real things.

            This is the point that has to be addressed first if Americans are going to be able to fully understand the lopsided class conflict that budget balancing has been part of.  Taxes pay for things that are necessary for society and cuts to those things mean cuts to the structural foundation of actual communities. Like a household budget without cable, Internet, decent food, heat, or toiletries, the idea of a community without parks, clean water, good schools, or drivable roads seemed ridiculous, given the obvious abundance of resources in America.  So the point of taxes isn’t to pay for things, but to chip in and get more than you might be able to if you had to pay for everything by yourself.  They are dues that community members pay to be part of a community.  If the idea of clean water is appealing, taxation is necessary. 

            As this argument goes with adults, so it went with students though.  “I don’t use any parks or the fire department, so why should I have to pay for them?” asked one student openly and without any malicious intent – he simply wondered how that idea worked into the whole community perspective.  Then it happened.  A group of students came up with the idea that everyone had to pay in a little bit for everything, but it was only fair if those who benefited most from infrastructure paid more.  We have to have roads, so everybody’s got to pay a little for them, but big stores really need the roads to get customers and products in, so they should have to pay more.  With a little facilitation, the logic snowballed.  The banks depend on police to protect their piles of wealth.  Millionaires with multiple homes and a couple of buildings that they do business out of depend on the insurance of the fire departments in numerous locations, not just for one apartment like the students did.  Landlords could charge more for apartments if there were nice parks and good access to public transportation in the area.  Businesses were more likely to use the courts, to benefit from technological development, even to an educated workforce.  It turns out, the rich not only use these government services more than average, they actually profit from their existence.

How would working people balance the budget differently?

            Looking at the budget template from The New York Times site, I assigned pairs of students to individual budget items, ranging from the various proposals on changes to capital gains taxes to changes in Social Security or disability benefits.  Their first major challenge was decoding the language of these individual proposals, since the level of difficulty in political budget prose is rather intentionally dense, even in summary form.  Even though some proposals were only a paragraph long, some students took a full class to figure out exactly what their item was talking about.  Causes of the confusion ranged from tracing through items such as “Allow expiration for Bush Era tax cuts to individuals with incomes above $250,000” in an effort to determine exactly what was being done to taxes on which group of people, to trying to figure out what “Using an alternate measure of inflation” to calculate cost of living increases in aid money actually meant. 

The process was a liberating one in itself.  As students overcame the alienation caused by the language of the politicians and bureaucrats, they developed a sense of power.  They could’ve been fooled or confused or simply turned away by the language of proposals like the Bowles-Simpson plan to “simplify” the tax code by eliminating some tax loopholes and reducing the overall tax rate for individuals and businesses.  However, as they read and analyzed what each proposal would actually mean, they were able to look past words like simplify and reduce tax rates, which are included to persuade the casual observer that these might be ideas that would benefit just about anybody.  Instead, I asked students to determine who would benefit from or be hurt by each item, and in what way. 

Some of these were simpler than others.  Students quickly decided that a carbon tax would either generate revenue by punishing polluters or encourage industries to find cleaner ways to do business, both very popular outcomes with middle school students.  Sure, the factory owners would be charged a bit, but it was in the interest of cleaning up the planet and keeping down the costs of global warming in the future. 

Other items sparked conversation about why anyone would argue against such proposals.  For instance, establishing a millionaire tax benefits the overall system by generating revenue and is a more progressive approach to taxation, but costs the rich money, so it seems that those items unfairly burden one group of people.  However, students quickly pointed out that it might actually be more beneficial for the rich to pay a small surtax if it meant that the government could maintain infrastructure that would facilitate business.  Taxing the rich was largely necessary in order to maintain the system that made the rich successful.            

            As students prepared to present these items to each other, they already had begun prioritizing certain types of budget proposals.  Cuts to state aid were almost universally never considered.  While students cared about items on the Federal budget, it quickly became apparent that the items that most directly affected them came from state money, including education, many types of public assistance, and public transportation.  Cutting the state seemed like too much of a sacrifice, especially in light of the comparatively paltry 40 billion that this would save over a 20 year period, equaling less than 4% of the overall budget.  For students, this cut would cost much more than it would save, hurting nearly everyone in some facet of life, and contributing very little to any actual solution.  An egalitarian focus was central to this conversation.  If a proposal would hurt many and benefit only slightly, it simply wasn’t worth the cost.  Similarly, although some students supported a consumption tax in various forms, usually as a 5% Federal sales tax, their logic was based on the presumed equality in such taxes.  Sales tax would depend upon how much someone bought, and most arguments centered on the assumption that the rich would be forced to pay their fair share because they buy so much more than other classes.  Other suggestions, like cutting jobs or freezing pay in the Federal workforce, were non-starters.  Students could clearly see that reducing jobs or pay to working families would only save in the short term and would ultimately cost more, not only to the people put out of work or the unemployment agencies that would have to pay out benefits after layoffs, but to the economy in general when these workers stop spending money, sending a ripple effect through other sectors. 

Overall, the students were able to balance the budget by keeping these sorts of concerns in mind at all times.  In general, students favored items that would generate revenue, although they did also suggest cuts that seemed to earn big reductions in the debt.  These ranged from reductions in the Social Security benefits of higher wage earners to an elimination of costly nuclear missile spending through weapon decommissioning projects.  Even in terms of taxes though, they were less hawkish than I was in my budget.  More often than not, they favored reducing tax breaks for the rich, such as higher-income mortgage deductions and corporate loopholes.  They were wary of capital gains or estate taxes on any but the very highest earners, partially because of the residual anti-tax conditioning they came to class carrying, but also because of what can only be described as an amazing sense of sympathy.  Showing a benevolent tendency that was quite unlike that of the rich interests who normally craft government budget documents, students were concerned with the possibility that, even if the wealthy in general could afford higher taxes, what would happen if an individual had special circumstances that limited his or her ability to pay?  What if that person lost a home or couldn’t put kids through school?

Of course, these concerns reflected the realities that many of my students had faced themselves and wanted to spare other people from facing.  This was no dictatorship of the proletariat, just an attempt to make people pay their fair share.  Most of their budgets actually divided spending cuts and tax increases fairly evenly, arguing that it would be unfair to ask for too much from anyone without everyone being willing to give something up.  Unfortunately, when their budgets were finished, they had produced documents that couldn’t hope to pass through a House subcommittee, let alone make it to the point of being signed by the President.  They were speechless when I told them their budgets would be laughed out of Congress.  They had avoided job cuts, minimized tax increases on all but those who could bear them the easiest, gave sustainable funds to education and the environment, and made some hard decisions about the military.  Many of them had even managed to run a short term surplus, even though they were only in 8^th grade.  Clearly something is wrong.   

So why doesn’t the budget ever look like this?       

            As students worked through their budgets and eventually came through in the black, the first thing that happened is that they dropped their initial scorn for government officials who were behind on passing a budget.  Originally we had made it a bit of a game, mocking educated leaders who couldn’t do something that a bunch of early-teens were about to do.  After looking at all the variables and facing many arguments about priorities and values, students were a bit more sympathetic.  This was hard stuff.  They developed a new irritation though.  While looking at summaries of the Paul Ryan budget and President Obama’s counter-proposal, students were struck by how many items on their budgets didn’t appear on either document from Washington.  The President made lackluster pushes for a repeal to the Bush Era cuts to the wealthy, but shied away from anything resembling the millionaire’s tax or the reduction in corporate loopholes.  Republicans denied the possibility of adding any taxes, even for oil industries in the wake of record profits.  Instead, the two groups seemed to only be arguing about how deeply to cut from an already bare-bones Federal budget.

Furthermore, students started to realize that it was taking a lot of cuts to working people to equal up to just a few cuts to the rich.  One estimate claims that the millionaire’s tax would generate almost one hundred billion dollars in revenue over the next 10 years by imposing a 5.4% tax on a few people who aren’t exactly struggling.  However, this tax has been looked over in favor of a Federal workforce pay freeze that will effectively reduce the pay of tens of thousands of workers by approximately 5%.  Even though this cut to pay for workers affects more people who have less to lose, students were quick to point out that it didn’t generate even one fifth of the revenue.  Cuts to state aid and other Federal programs like the Office of Safe and Drug-Free Schools would also be necessary to make up the gap left by neglecting the Millionaire’s tax. 

There’s a clear trend here.  While students were concerned about asking too much from the rich, the beneficiaries of such consideration have no problem asking for everything from working people.  Reductions in salaries, benefits and standards of living for workers are framed as “tough sacrifices” while taxes on the wealthiest members of society are declaimed as “class warfare.”  Students were appalled by the fact that they hadn’t been willing to attack the rich in order to balance the budget but were expected to put up with seemingly endless cuts themselves.  One student demanded a chance to rewrite his budget, blow for blow.  Suddenly it was all-too-clear that budgets weren’t the benevolent documents that students had assumed them to be. 

Students left the unit angry, but unsure what to do about it.  Clearly the government had betrayed them and sided with the wealthy, even in the more progressive cases.  What it took time for them to realize was that this unit was an important first step, one that many people in the adult world still haven’t taken.  Understanding how the budget works, starting with the simple fact of not being intimidated by the language used to talk about it, is key to changing the predatory tendencies built into the ways that decisions about our economy are made.  Being able to look at the whole range of items on a particular budget to identify its priorities gave students the critical analytical skills necessary to answer any politician who mock-sympathetically explains that there just isn’t enough money for education or parks or aid to families.  There is enough money.  It just got put somewhere else, which the people who wrote the budget deemed to be more important.  Understanding this seemingly simple point is key to not only understanding how budgets work in general; it is absolutely necessary for understanding why, unless people learn to read and analyze these documents critically, the wealthy will continually benefit from institutionalized helping hands, while workers continue to be asked to bear an obscenely heavy load.