WHEREAS:
In addition to our trade and fiscal deficits, America faces a "third deficit" — the deficiency of public investment in our people and our economic infrastructure; and
WHEREAS:
Public investment programs are those that increase the nation's future capacity to produce goods and services which creates economic growth; and
WHEREAS:
Economic growth is the key to higher living standards; and
WHEREAS:
The public investment deficit will have a crippling effect on America's future competitiveness; and
WHEREAS:
Just as business must continually reinvest in order to prosper, so must a nation, and higher productivity is a function of public, as well as private, investment; and
WHEREAS:
President Clinton, during his campaign, called for reversing the long-term trend in which Americans have been working harder for less and proposed a national economic strategy that "put people first by investing more than $50 billion each year for the next four years" in human and physical infrastructure programs; and
WHEREAS:
The Clinton short-term stimulus proposal and much of the long-term investment package was defeated in the Congress; and
WHEREAS:
The deficit reduction plan has achieved startling success, the projected budget shortfall for Fiscal Year (FY) 1995 is $24 billion below the level agreed upon in last year's budget plan — this alone will not produce good jobs at good wages; and
WHEREAS:
Even if the U.S. economy stays on its present course, it will not generate enough investment to reverse the nation's long-term decline in real wages. Public and private investment will fall hundreds of billions of dollars short of what is needed to support a high-wage future for the majority of America's working families; and
WHEREAS:
By agreeing to extend and tighten the discretionary spending caps in last year's budget, the Administration and Congress have painted themselves into a fiscal comer, and by refusing to cut military spending further that corner was made even smaller. As a result, the FY 1995 budget is more of the same: an investment strategy held hostage by the obsession with deficit reduction; and
WHEREAS:
For the third year in a row, total federal outlays in FY 1995 for physical capital, education and training and civilian research and development will be roughly stagnant as a share of Gross National Product (GNP); and
WHEREAS:
A return to the 1980 investment level, the year before the decade long decline, would require an additional $40 billion annually in education, training and physical infrastructure; and
WHEREAS:
Human investments are cost-effective, for example, $1 invested in prenatal care saves $3.38 in care for low-birthweight babies; $1 invested in immunization saves $10 in treatment costs; $1 invested in Head Start saves $4-6 of special education, public assistance and crime costs; and $1 invested in Jobs Corps training produces $1.46 in benefits, by increasing employment and earnings and decreasing crime and transfer payments — each of these and other human investments, particularly in education and training is crucial to the creation of a high-skilled, high-wage workforce; and
WHEREAS:
Physical capital investments have significant long-term private sector returns. If since 1970, the United States had maintained the 1950s and 1960s share of Gross National Product for core infrastructure, productivity growth would have been 50 percent higher; and
WHEREAS:
The longer the United States waits to address its public investment deficit, the more expensive catching up becomes and the longer the U.S. economy is condemned to stagnant levels of public investment.
THEREFORE BE IT RESOLVED:
That AFSCME should encourage the President and the Congress to immediately address its public investment deficit; and
BE IT FURTHER RESOLVED:
The federal government should immediately raise its annual level of investment in education, training and public infrastructure by at least $40 billion; and
BE IT FINALLY RESOLVED:
With a budget agreement that mandates tight budget caps which freeze domestic discretionary spending, new mechanisms must be considered for overcoming the public investment shortfall.
SUBMITTED BY:
Louis G. Albano, President and Delegate
Richard Delio, Secretary and Delegate
AFSCME Local 375, Council 37
New York