Saturday’s editorial recommends Congress devote itself to the spending restraint and entitlement reform that will correct the country’s unsustainable budget crisis.
Editor’s note: Part 2 of 2 about the federal budget.
You will hear, in the coming weeks, about the massive deficits contained in the Obama administration’s budgets.
In dollar terms, they truly are staggering: nearly $1.6 trillion this year and $1.3 trillion in 2011. To be fair, tax revenues are still projected to be about 15 percent beneath their peak in 2007 and 2008, while the costs of everything (especially including those mandatory programs) have continued to rise. Moreover, President Obama inherited a $1.3 trillion deficit when he took office and still plans to cut it to about $700 billion as the economy recovers near the end of his term. Even so, our country is clearly on an unsustainable path – and the “wasteful spending” you will hear described is only a small part of the problem.
In fact, our problems are much more serious. About 64 percent of the 2011 budget is “mandatory” spending – items that the law requires to be funded, primarily Medicare, Medicaid, Social Security and interest payments on existing debt. They alone will consume nearly all the federal tax revenues next year, before any military spending or new programs are counted.
By contrast, stimulus spending in 2011 will be only $134 billion – so eliminating it altogether would still leave well more than $1 trillion in deficit spending. Earmarks? U.S. Sen. Jim DeMint, a well-known crusader against earmarks, identified $32 billion last year, so eliminating them still doesn’t bring the deficit below the trillion-dollar mark.
A course correction for the
· Spending restraint and responsible taxation.
Meanwhile, the Bush Administration’s tax cuts will expire next year, and if Congress renews them as expected, the deficit will double its current projection 10 years down the road. No one wants to raise taxes during a recession, but as soon as the worst has passed, Congress should not enact any more tax cuts that do not have corresponding cuts in spending.
DeMint and Graham have also
re-introduced the Balanced Budget Amendment, a premise which deserves serious
study. Too strict a measure could severely restrict the federal government’s
ability to respond to true emergencies – such as wars and recessions – but a
moderate version would restrain the inexcusable deficit spending during periods
of relative peace and prosperity that made the
· Entitlement reform. The explosion in Social Security and Medicare/Medicaid costs represent the single greatest contributors to the explosion of debt in the years to come. Social Security can be made solvent again by an adjustment of benefits (a reduction for some seniors, actually, which is why Congress continues to avoid such an “easy” fix), but the medical entitlements can only be addressed by slowing inflation in health care costs.
The same Congressional Budget Office that projects the looming debt crisis has also said the Democrats’ health care bill would help lower the deficits, partly by reducing Medicare expenses and partly by beginning to tax some of the money large employers spend on employees’ health insurance. A bipartisan compromise bill with Graham as one of a dozen co-sponsors would accelerate this process, presumably helping stop medical inflation even more quickly.
In sum, though the deficits are massive, all the pieces to correct it are already on the table. Swap health care reform for a balanced budget – it’s a plan so simple that only Congress could reject it.