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Transcript of 1742 Connecticut Ave., N.W., Washington, D.C. 20009 (202) 234-8494 Moving Towards Long- Term Action...
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Moving Towards Long-Term Action on Tax and
Budget Issues
A Presentation at the 2004 Grantmakers In Health Fall Forum
Gary D. Bass
November 5, 2004
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
PART IThe Problem
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
As Baby Boomers Come of Age, the Deficit Explodes
Source: Derived from Chart 12-5, OMB, 2005 Budget, Analytical Perspectives, page 194
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Lost Federal Revenue Compared to Philanthropic
Giving
485.2
260.3
38.1 25.7 17.30
50
100
150
200
250
300
350
400
450
500
$ in
Bill
ion
s
LostRevenue
IndividualGiving
Foundations Bequests Corp Giving
All figures in 2009 Dollars. Philanthropy source: American Association of Fundraising Counsel’s Trust in Philanthropy/Giving USA 2003.
Assuming charitable giving keeps pace with the growth in the economy, giving in 2009 will be $341.4 billion. Charity would need to increase 142% to replace the lost federal revenue, assuming it continues to fund existing activities.
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Breakdown of the Projected DeficitAs a Percent of GDP
YearSocial
Security Medicare Medicaid
Rest of
Govt Interest Total Revenue GAP
2004 4.3 2.7 1.5 10.3 1.8 20.6 15.8 4.82010 4.3 3.7 1.5 9.0 2.5 21.0 17.2 3.82015 4.7 4.2 1.8 8.3 2.5 21.5 17.4 4.12020 5.3 5.1 2.0 8.0 2.5 22.9 18.4 4.5
2040 6.5 8.4 2.8 8.0 6.1 31.8 18.4 13.32050 6.5 10.9 3.5 8.0 11.0 39.9 18.4 21.5
Source: Henry Aaron estimates, based on CBO long-term projections and estimates by William Gale and Peter Orszag
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Closing a 10% GDP Deficit Gap
Item Action % of Gap ClosedIncome tax (8.5% GDP) Raise by one-third 28%
Payroll tax (4.5%) Raise by one-third 15Social Security (6.6%) Cut cost growth by half 11
Medicare (8.4%) Cut by one-fourth 21
Medicaid (2.8%) Cut by one-fourth 7
Rest Of Govt (8.0%) Cut by one-fourth 20
Total Total of the aboveof the above 102% 102%
Source: Henry Aaron, Brookings Institution
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Big Squeeze• Lower revenues due to tax cuts• Higher expenditures for national
defense and homeland security• Demographic changes leading to
more expenditure on Social Security and Medicare
The RESULT….No money left for other priorities of
nonprofits (education, child nutrition, research, etc. )
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
The Long-Term Problem• It’s a Revenue Problem. The tax
cuts since 2001 cause long-term structural problems. Additionally, there is a need to develop a fairer tax system with more revenue.
• Hard Choices Await Us. Even with additional revenue, some hard choices about spending priorities may be necessary. For example, some note that current health care policies may not be sustainable over the long-term.
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
How Did We Get Into This Problem?
“I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”
Grover Norquist, Americans for Tax ReformJune 25, 2003
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Proactive Policy Initiative
• Not enough to be “defensive” – fighting short-term legislative battles
• Must be proactive on broad tax and budget issues– Must look outside immediate issue
areas– Must look at longer-range policy
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
What Has OMB Watch Done?
• Call to Action paper (December, 2003) • Internet Survey completed by over
700 respondents (Jan/Feb, 2004) – Helped to shape the set of issues examined
in subsequent meetings
• Regional Strategy Meetings: Chicago, IL; Columbia, SC; Philadelphia, PA; Phoenix, AZ; and Seattle, WA;
• National Retreat: with 65 national, state and local nonprofit leaders
• Interviewed hundreds of nonprofit leaders
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
PART IIInternet Survey Results
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Strong Support for aTax & Budget Campaign
90% of respondents say it is time to launch a longer-term offensive campaign on federal tax and budget issues.
34 56
0 20 40 60 80 100
%
Somewhat Agree Strongly Agree
90%
Given limited time and resources and the fact that there are many other important issues, do you agree or disagree that it is time to launch a long-term offensive campaign around federal tax and budget issues?
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
37 51
40 49
34 56
38 52
35 56
36 56
34 59
0 20 40 60 80 100
%
Disability
NP Sector
Education
Health
Emplymt
Child, Youth, Families
Housing
Somewhat Agree Strongly Agree
Support for Tax & Budget Campaign by Primary Activity
Those Primary Activities Listed by 20% of More of Respondents
93%
92%
91%
90%
90%
89%
88%
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
77
17
60
33
61
29
61
29
0
10
20
30
40
50
60
70
80
90
100
%
ProgressiveTaxes w/
Adequate $
Econ Growth &Jobs
Funding FedMandates
HighlightDomestic
Needs
Very Important Somewhat Important
What Should Be the Focus?
94% 93% 90%90%
9 in 10 say the focus should be:
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
“Redefine the definitions of "tax" as more than some kind
of perverse theft of money. Tax must become redefined in a
context of community-building, fairness, common ground and
even patriotism.”
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
63
24
45
30
39
31
0
10
20
30
40
50
60
70
80
90
%
Cut RegressiveTaxes
Promote Need forGovt
Revenue forUnmet Needs
Very Important Somewhat Important
Other Supported Campaign Themes87%
75%70%
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
19 37
0 20 40 60
Cut Deficit w/Spending
Cuts
Not Important Somewhat Unimportant
A Majority Oppose Cutting Spending to Reduce the Deficit
56%
%
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Participation May Be a Challenge
2821 31 16
53
34 56
-50 0 50 100
%
LaunchCampaign
Participate
Somewhat Disagree/Unlikely Disagree/NoSomewhat Agree/Likely Strongly Agree/Very Likely
POSITIVENEGATIVE
90% of respondents say it is time to launch a campaign BUT 49% say they are unlikely to participate.
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Even Though 49% say They Might Not Participate in a
Campaign…
61% Say They Will Help Redistribute Information
About the Campaign
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Other Ways Groups Say They Would Participate
40 38
25 24
0
5
10
15
20
25
30
35
40
%
Town HallMeetings
LobbyActivities
EditorialBoard
Meetings
Be Part ofLeadership
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
35
41
32
40
0
20
40
60
80
%
Lack ofCoordination
Limited Leadership& Org Structure
Somewhat Challenge Major Challenge
76% 72%
Top Challenges to ConfrontIt’s an Organizing Issue
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Other Challenges to Confront
Relationships between National, State and Local Groups
67% say that national groups do not listen to state and local groups and are out of touch with their concerns
“National organizations often fail to form the partnership and show little respect for the amount of work being done on the local level. In addition,
national organizations are often very ‘abusive’ partners.”
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Other Challenges to Confront
Top Down Nature of Federal Budget & Tax Policy
69% say the top down nature makes state and local groups feel irrelevant.
“Convincing local organizations to carve out time for working on ‘bigger picture’ issues when the day-to-day running of an organization are often
overwhelming.”
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
The Role of Foundations
34
47
33
43
28
47
38
36
29
27
0
20
40
60
80
100
%
EducateTrustees onTax/Budget
PublicEducation
Projects onTax/Budget
AdvocacyCapacity
Bldg
PilotProjects for
GovtReplication
Programs toReplace
Govt
Somewhat Important Very Important
With respect to tax and budget issues, how important is it for foundations to…
81%76% 75% 74%
56%
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Foundations vs. Other Respondents
64 6355 52 52 57
49 43
13 80
10
20
30
40
50
60
70
EducateTrustees onTax/Budget
Public EducProjects onTax/Budget
AdvocacyCapacity Bldg
Pilot Projectsfor Govt
Replication
Fund Projectsto Replace
Govt
All Respondents Funders
Dif
fere
nce
bet
wee
n
Imp
ort
ant
and
No
t Im
po
rtan
t
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
PART IIIRegional Strategy Session Results
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Hosts of Strategy Sessions
• Columbia, South Carolina (March 12)– South Carolina Association of Nonprofit
Organizations
• Chicago, Illinois (March 22)– Voices for Illinois Children
• Seattle, Washington (March 23)– Civic Engagement Project/Univ. of Washington,
Institute for Washington’s Future, & United for a Fair Economy
• Phoenix, Arizona (March 24)– Arizona Community Foundation
• Philadelphia, Pennsylvania (April 28)– Center for Responsible Funding, African American United
Fund, AIDS Fund and WOMEN’S WAY.
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
1 Develop a Vision.
2 Develop Progressive Tax Policies &
Principles.
3 Change the Language We Use.
4 Address the Attacks on Role of
Government.
5 Strengthen Civic Responsibility.
Five Objectives Identified by Nonprofits
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Five Objectives of an Initiative
1 Develop a Vision. We need the equivalent of a new social compact. Some talked about the “American dream;” others about “healthy communities.” All wanted a positive vision which serves as the basis for why we need a vibrant government with adequate funding.
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
2 Develop Progressive Tax Policies & Principles. The focus of a campaign should not be about taxes, but about pursuing the vision. To adequately support the vision we need a plan that insures a fair way of raising the resources to meet the vision.
Five Objectives of an Initiative
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
3 Change the Language We Use. More than an ad campaign, there is a need to reframe the debate and to use values-based language that the public understands and that will resonate with them. Developing these new frames and language should be a key objective of a long-term initiative.
Five Objectives of an Initiative
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
4 Address the Attacks on Role of Government. It is essential to not only stop the conservative attacks on government, but also to demonstrate the importance of government. The public no longer realizes how important a role government plays in everyday life. Simultaneously, we must address issues about government inefficiencies.
Five Objectives of an Initiative
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
5 Strengthen Civic Responsibility. Unless we engage the electorate in a more effective manner, we will fail. We will need to increase nonprofit advocacy on tax and budget issues, hold elected officials accountable, deal with mobilizing the electorate, and wrestle with the role of money in politics.
Five Objectives of an Initiative
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
PART IVNext Steps
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
Mapping of what organizations are doing and creation of a resource center;
Framing and Messaging – coordination and dissemination of frames;
Creating “Intellectual Space” for longer-range thinking;
Promoting civic engagement and public “literacy” around federal tax/budget issues;
Developing the governance and operations of the Initiative/Network, including addressing resource needs of groups involved.
Proposed Next Steps
1742 Connecticut Ave., N.W., Washington, D.C. 20009
(202) 234-8494 http://www.ombwatch.org
• Help develop a vision of what we want our society to look like in 10 years
• Find ways to educate trustees, executives, and program staff about these budget and tax issues
• Convene meetings to discuss longer-range, proactive thinking
• Assist grantees in thinking beyond just their issue area
• Fund work in this area
Steps GIH May Want to Consider