The move last week by Barack Obama and congressional Republicans to increase the federal debt ceiling certainly helped both sides avoid what has been a public relations and political nightmare. As Washington Examiner columnist Tim Carney declared in one of his recent columns, the administration no longer has to deal with "embarrassing debt-limit votes" while the Republicans get "what they wanted" on substance.
But now, both Obama and House Speaker John Boehner have to worry about the more immediate threats to their respective bids for retaining political power. The first such threat: economic malaise that that could end up as long-lasting as that which still grips Japan for a third decade. Last week’s headline-grabbing 512-point drop in the Dow Jones Industrial Average -- which includes just 30 stocks -- merely underlined general dissatisfaction extending into its fifth year.
Meanwhile, unemployment persists, both as a cause and effect of that dissatisfaction. With last Thursday's report that new unemployment claims remain at more than 400,000 for the 17th consecutive week, and that only 117,000 jobs were added last month, both Obama and congressional Republicans need to take quick action. They need to make it appear that they are improving conditions for companies to hire more workers and for entrepreneurs to start businesses. So reductions in corporate income taxes, along with cuts in federal spending after two years of failed stimulus subsidies, will have to be enacted.
But the biggest long-term drains on the nation’s economic growth stem from our woeful public school systems. Millions of high school dropouts rank among the nation's long term unemployed, essentially shut out of the jobs market for all but the most menial labor. Fifteen percent of American high school dropouts age 25 and older were unemployed on a seasonally adjusted basis, according to the U.S. Bureau of Labor Statistics, virtually unchanged from the same period last year. That's nearly double the rate for high school graduates with some amount of college education and three times higher than that of collegians with bachelor's degrees.
The problem is even worse with the new generation of dropouts -- some 1.2 million leaving schools each year without a diploma -- who have even fewer prospects for employment. Nearly a third of dropouts age 16-to-24 are out of work on a not seasonally adjusted basis. These are young men and women who could not qualify for high-paying blue-collar jobs in auto factories (which require employees to have at least 60 hours of college credit), or welding. And given their low literacy and math skills, they are unlikely to make it into the military (once the last resort for dropouts) or gain meaningful middle-class employment.
The long-term unemployment problem for dropouts points to the single-biggest threat to both the American economy and the concept of small government. 33 percent of American third-graders read “Below Basic Proficiency” on the National Assessment of Educational Progress, while 27 percent of eighth-graders are mathematically illiterate. With the low quality of instruction among America's teaching corps, the lack of high-quality school options for all but the wealthiest parents, and English and math curricula that would hardly match up to (often low) 19th-century standards, the nation's traditional public schools have become a nearly-$600 billion drain on the nation's economy.
Meanwhile, school districts and taxpayers are struggling with $1.4 trillion in defined-benefit pension deficits and unfunded retired-teacher healthcare costs. Budget-cutting governors, facing these burdens along with Medicaid costs that are increasing by 19 percent in the 2011-2012 fiscal year, are pushing to pare (if not slash) the deals states and districts struck with affiliates of the National Education Association and the American Federation of Teachers. The array of benefits featured in these deals -- including degree- and seniority-based pay scales, near-lifetime employment and near-free healthcare -- do little to help improve student achievement or attract talented college graduates to teaching, and even contributes to the declining quality of the profession.
Together with centrist Democrat and conservative school reformers, governors and legislators on both sides of the aisle in states such as Wisconsin and New Jersey are either abolishing collective bargaining or forcing teachers unions to pay more toward their healthcare costs. But as seen last week with the Save Our Schools rally, the nation's two largest teachers' unions are going to fight hard to protect the privileges that have made teaching the most-comfortable, lucrative and secure profession in the public sector -- even to the point of recruiting action star Matt Damon to their cause. Even with a long string of political and public relations failures (including revelations by education magazine Dropout Nation of the American Federation of Teachers' latest anti-school reform strategy), the battles will only get tougher.
The Obama administration has supported their cause, namely with its Race to the Top initiative. This effort builds upon the efforts of George W. Bush, who passed No Child Left Behind with the help of then-House Education Committee Chairman John Boehner and Ted Kennedy. The administration and congressional Republicans are pursuing their visions of school reform in entirely the wrong way.
Last month, U.S. Secretary of Education Arne Duncan stepped up his campaign to get a speedy reauthorization of No Child by announcing that he would waive (and essentially gut) No Child's accountability requirements -- which have helped reveal the depths of the nation's education crisis -- instead of waiting on Congress to finally get around to the matter. This led Republican House Education and the Workforce Committee Chairman John Kline (who also wants to gut the law) to accuse the administration of overreach. The unwillingness of Kline to move on reauthorization, along with general opposition to Duncan's move by House and Senate Democrats, and the end of stimulus funds used to fund Race to the Top, has the administration sputtering at the worst possible moment.
Kline has managed to pass some of his own measures, including a bill that, in theory, would give states more flexibility to spend federal education dollars with less accountability as during No Child’s passage a decade ago. But the addition of 12 new Republicans to his committee (many of whom more concerned with overturning Obama's healthcare reform plan than with education policy) means he's getting little done. The fact that he is getting opposition from Republican governors (who used his law to advance their own reform measures), possibly getting pushback from House Speaker Boehner (who has bigger fish to fry), and can't get anything past Senate Democrats (who themselves are not doing much on reauthorizing No Child) means that nothing will happen soon.
The bad news? Neither Obama nor congressional Republicans are actually doing much to address the single-biggest long-term drain on the economy. But with the states moving forward on their own -- and teachers unions losing influence in education -- this may end up turning out for the best.