WASHINGTON : Businesses Lobby Against Plan to Tax Them for Children’s Aid Programs

In the world of politics, everyone likes kids and dogs. And no one likes taxes.

That is why a bill proposed by Sen. Christopher J. Dodd (D-Conn.) faces a long, long battle in Congress. The Children’s Investment Trust Act is based on a simple equation: Take any child and add adequate prenatal care, good nutrition, education and job training. What is the result? A healthy, productive, taxpaying adult.

Subtract any of those elements, and the odds increase that the result will be a person with problems that make it harder to become a self-sufficient member of society. He might have a learning or physical disability or a drug problem. He might lack the skills to hold a job. He might end up in jail.

Dodd’s bill would create in the federal budget a separate trust fund that would be run by the Treasury Department. The fund would finance the ongoing, proven and cost-effective early childhood and education programs for children and families in need, such as WIC (Women, Infants, Children--a nutrition program), Medicaid, childhood immunizations, Job Corps, Head Start and education for children with disabilities.

The legislation would also provide states with new funds for similar state-run programs, and it would not interfere with existing programs and regulations. Finally, the bill would require the President to report on the status of the nation’s children and families and include in his annual budget a six-year plan for expenditures from the trust.

Dodd is seeking $15 billion for the children’s trust fund. His bill does not specify how the money is to be raised, but he has been clear about where he would get it--and that is why the business community is so opposed to the measure.

Dodd favors a 2% increase in the maximum corporate tax rate, a surtax on joint incomes over $250,000, restrictions on business meal and entertainment deductions and an increase in cigarette and alcoholic beverage taxes.

His logic is that although such programs are usually paid for by the users, a tax on disposable diapers and infant formula is hardly the answer in this case. The Connecticut liberal argues that corporate America is the ultimate user of the pool of human resources, so it should pay.

“We found the money to bail out the savings and loans, and we found the money for Operation Desert Storm,” Dodd recently said at a hearing of the Senate Labor and Human Resources subcommittee on children, family, drugs and alcoholism, which he chairs. “But when it comes to our children--the poorest and most vulnerable in our society--the silence is deafening; the inaction is disgraceful.”

No one dared to be silent at the hearing. One after another, friendly witnesses espoused the need for such legislation.

“This could very well be the most important day ever for the future of American children,” one witness said.

The view from the business community was less enthusiastic.

“I regret to say that I cannot support your Children’s Investment Trust Fund,” said William H. Kolberg, president of the National Alliance of Business.

While supporting funding for some programs targeted by Dodd, Kolberg said in a later interview: “Trust funds are just a diversionary tactic. Dodd’s bill is the wrong vehicle. In the business community, there seems to be unanimity on the importance of early childhood education. But in a trillion-dollar budget, we shouldn’t be thinking about new taxes. I think there is adequate money to do the kinds of things we need to do.”

And already other business leaders and organizations are objecting to the prospect of new taxes.

“We are looking at the year 2000 with a shortage of workers and greater complexity in the workplace environment where more training is needed than ever before,” said D. J. Gribbin, legislative representative for the National Federation of Independent Businesses. “However, last year Congress raised over $140 billion in taxes in the next five years. We find it amazing, with each passing year, with taxes going up, that it is never enough. We would prefer that Congress looks at the money it has already, sets priorities and spends within its means. We recognize the challenge that is facing us. But, boy, are we tired of paying taxes.”

Whatever the vehicle, Dodd’s bill or cutbacks in other programs that free up funds for these education and health programs, this is a pay-now-or-pay-later situation. If the money is not invested in the children of today, there will be an even heftier price to pay for the adults of tomorrow.

For once, what is both the right and the kind thing to do also makes sense economically.

For example, for every dollar invested in WIC, the country saves $3 in short-term hospital costs. For every dollar invested in the childhood immunization program, the country saves $10 in medical costs. For every dollar invested in Head Start, the country saves $4.75 in special education and public assistance.

Business Groups Back Job Corps Expansion

While business groups are lining up against Dodd’s Children’s Investment Trust, some of them have joined a coalition created to support one of the programs that would benefit from the legislation.

A group of business, labor and public interest organizations has formed to urge Congress to expand the highly successful Job Corps, the residential educational and vocational training program created in 1965 as part of President Lyndon B. Johnson’s Great Society.

The coalition’s new Job Corps 50-50 Plan would expand the service to reach 50% more disadvantaged youths by enriching the existing program and opening 50 new centers in the next decade.

Currently, the Job Corps reaches only a fraction of the eligible at-risk youth across the country, or about 60,000 of the potentially qualified 440,000 young people a year. The 50-50 plan, if fully implemented, would provide resources for 103,000 people. The coalition is asking Congress for $1.16 billion in 1992, with $160 million of it used to open the new training centers.

At a recent hearing before the House Education and Labor subcommittee on employment opportunities, Tommy Thompson, first vice president and secretary of the National Assn. of Home Builders, described the program’s benefits.

“Job Corps provides essential services to our labor force, our employers and our industry,” he said. “The most important service that Job Corps provides our industry is a steady supply of trained workers, with the needed job skills and positive attitudes.”