Contents

Chapter One

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In The Government We Deserve, Eugene Steuerle, Edward Gramlich, Hugh Heclo, and Demetra Smith Nightingale offer a blueprint for changing the direction of American domestic policy and politics. They propose a series of fiscal and political reforms, warning that the federal government has made so many open-ended commitments to programs with automatic growth rates that "it can do very little that is new without reneging on promises it has already made." As co-author Steuerle notes:

"Within three decades ... the pension and health demands of retiring baby boomers, combined with the rising cost of health care and interest on the debt, will eat up close to 100 percent of projected revenues at current tax rates--leaving literally nothing for any other public expenditure."

At the same time, widespread public disengagement with political life has left critical policymaking in the hands of professional politicians, image consultants, and powerful interest groups. The result, according to co-author Heclo, is "a government incapable of responding to current needs and a citizenry that has lost a sense of ownership of government."

Recognizing Current Needs

The first step to effective reform, the authors say, is an evaluation of the forces changing our society. Major trends highlighted in the book include:

• Unequal Sharing of Wealth: Despite positive economic growth, the last two decades have witnessed significantly increased income inequality, with greater wealth concentrating at the top. "Perhaps most disturbing, " warns co-author Nightingale, "are the rising poverty rates for single parents with children, a growing segment of the population."

• Changing Structure of the Economy: The increasing demand for a skilled and educated workforce has caused declines in real earnings for workers with less education. Social welfare policy may need to turn away from the current focus on simply providing security toward policies that create opportunities for higher earnings and more savings and encourage continuous human capital development.

• Changes in American Family Life: Because most adults now work outside the home, children increasingly go without adult supervision. School schedules are still based on agrarian life of the 19th century. Tax policies significantly discourage marriage in low-income families and penalize some working men and women in two-earner households.

• Seismic Demographic Shifts: People are living longer, retiring earlier and receiving ever larger aggregate retirement benefits. As our population ages, the number of retirees is growing faster than the number of workers contributing to their support through social security. Retirement benefits take up an increasing portion of the nation's income and the federal government's budget, yet these benefits increasingly do not go to the elderly with the greatest needs, typically the very old.

A Plan of Action for the Twenty-first Century

The Government We Deserve weaves together analyses of issues traditionally addressed as separate, often unrelated concerns and argues that better government requires dealing simultaneously with the economic, family, fiscal, and political changes of our time. In lieu of prescriptions for specific policies, it provides a set of eight goals for reform:

Free our fiscal future — We must create some fiscal slack in our budgets, so future generations have the requisite flexibility to decide what are the most important needs of their time. This requires constraining automatic growth in programs and reducing the competitive disadvantage that new programs and discretionary programs now face in the legislative process.

Give social insurance a modern face — Retirement and health policies have large built-in growth based on insurance models that are decades old, says co-author Gramlich: "It's time for a comprehensive assessment of the relative priority of different programs for Americans."

Make a government for all ages — A government for all ages would put retirement and health programs into the context of overall social needs, including education and opportunities for accumulating wealth.

Increase everyone's chances to build financial security — By creating opportunities to accumulate assets for financial security, especially among the most disadvantaged, society can give everyone a greater stake in the future. We should look to the twenty-first century as a time to strike a balance between security and opportunity.

Stress learning over a lifetime — Lifetime learning is a key to developing and maintaining the human capital vital in a technological economy that so richly rewards both knowledge and education. We should not just improve education, but also extend and equalize educational opportunities at all stages of life.

Provide children with access to greater adult or parental supervision, guidance, and mentoring — While research shows that children are most likely to get in trouble when unsupervised and that children's relationships with adults are essential for their healthy development, government programs continue to neglect the fundamental need of each child for adult stimulus, nurturing, and supervision.

Support the modern family — Many government tax and expenditure policies, built around stereotypes that do not fit modern families, are neither equitable nor efficient, and they often contradict important values in society. For example, tax policy puts low-income individuals at a disadvantage by reducing their combined income up to 30 percent when they marry.

Foster a new democratic citizenship — Revitalizing citizenship depends upon each of us as citizens trying to do the right thing to build trust in our civic life. Doing so requires improving media communication, nourishing deliberative and thoughtful public opinion, and supporting institutions that encourage responsible journalism and civic education.