The Dems are now going to be expected to do something constructive, like dealing with the budget problem. Which involves raising taxes, cutting spending, or both. What can be done, now, that will work?
Budget deficits like we have now won’t go away in one year or even two. There’s multiple ways it could be balanced. A drastic tax increase, for example, or a drastic cut in spending.
What’s more practical is putting a “halt” on spending in certain areas (meaning no more increases in that area) while possibly implementing moderate tax increases; drastic increases in taxes are not needed as government revenue will generally increase with time as the economy and the salaries of citizens grow.
As long as we’re in Iraq and Afghanistan the budget probably cannot be balanced. No American President has ever successfully balanced the budget during times of major warfare. The old tradition was a budget deficit during wartime and a budget surplus during peace. This tradition came to an end in the mid-20th century and we were saddled with budget deficits for most of the years since WWII, although the deficit was small (and was a small surplus in 1969 IIRC.) This trend was reversed for the last few years of Clinton’s term, but situations are drastically different now than they were so the same things that worked for Clinton probably won’t work for politicians right now.
Ultimately we will always have a problem with deficits from time to time until we find a way to control pork barrel spending. I personally think the line item veto is an excellent tool to do just that, but the SCOTUS seems to feel it is unconstitutional.
Many of the Bush tax cuts were put in with sunset provisions, so that they will expire after a limited number of years. This was done to be able to say that they would be revenue neutral (i.e. they wouldn’t increase or reduce total government revenues), or that their loss of revenue would be limited. Although I believe that some were made permanent, there are several that will still sunset.
I expect that the Democrats will just let many of those sunset provision simply go into effect, eliminating the tax cuts by their own terms.
While eliminating pork spending would be a useful task in beginning to control the deficit (and thereby begining to assert control on the overall debt) it’s nowhere near sufficient to get the job done even with 100% elimination.
We need to, sadly some would say, get a handle on entitlement spending if we want to get serious about it. Control spending there (somehow), eliminate the concept of ‘off budget’ spending completely so the entire thing is out there, and convert to ‘pay as you go’ spending patterns and we’ll see some real gains.
Of course, a lot of those bonds out there are fairly short terms and ALL of them are time sensitive somehow, so simply controlling the deficit for X amount of year would effectively eliminate the debt completely.
And if someone could send me a pony I think I’m entitled to one.
There is NO way the fedral budget can be balanced. in the sense of current accounts, yes, you could have a situation where current $ paid out = taxes taken in. but in the long term, a balanced budget is impossible, for two main reasons;
-the unfunded obligations of the federal Government: stuff like military pensions, Medicare, foreign aid, wars, etc. This is an amount beyond calculation-it probably exceeds $100 TRILLION!
-the interest on the national Debt-which is risning astronomically, as the debt grows
So despite all the blather of politicians, we have neither the will nor the means to balance the budget. the attitude in Washington is: (to quote King Louis XVI ; “apres moi, le deluge”!
Eliminating pork barrel spending or earmarks will do absolutely nothing to reduce spending. Pork barrel spending is simply Congressmen or Senators allocating a certain portion of an agency’s budget to be spent in their state. If we eliminate it, it will only mean that the agency has more discretion over its budget. It will not mean that spending will go down one penny.
That’s the key. Discretionary spending isn’t really the problem. Entitlements are what will kill us, especially in the long run. We should take a long-term view here and work on entitlement reform to reduce spending even if it means we have deficits in the short-run. It’s far more important to bring Medicare, Medicaid, and Social Security under control than to worry about cutting a few billion dollars in spending this year.
Personally, I think we should do both – cut discretionary spending (there are a number of useless programs that could easily be eliminated and no one would be worse for wear) as well as work on entitlement reform. Unfortunately, the Democrats’ proposals during the last six years were for increased spending, so I’m not sure we’ll see any efforts made in these areas.
More likely, they will look to raise taxes. The problem with that is that raising taxes slows economic growth, which also slows tax revenue coming into the federal government. We had a balanced budget in the late 90’s not because of either reduced spending or higher taxes, but because we had a red hot economy. We should be wary of doing anything to dampen economic growth.
a) Raise the social security tax cap. That would only affect folks earning more than (I think) 90K, and there’s no reason I can see that income above & beyond 90K should be exempt from social security tax anyhow.
b) Roll back some of the GWB tax cuts. The goal here is to pay the piper, not to hire a whole 'nother bagpipe band, but since Georgie cut taxes while increasing spending, a correction is needed.
c) Clean up Medicare D. Not only is it a structural nightmare, it diverts revenue from both government and taxpayer alike to the insurance companies and the pharmaceutical industry. Make the latter compete by opening bidding on prescription meds, the former by streamlining the options to make it simple & easy for Medicare recipients to comparison-shop. Eliminate the RxPlans’ right to change formularies out from under their [del]victims[/del] subscribers. Allow import of meds manufactured with proper oversight from other sources.
Anyone interested in concrete ways to reduce spending or increase revenues should check out the Congressional Budget Office’s biennial volume called, simply, “Budget Options.” (There’s a link on the lower right of www.cbo.gov.) It consists of short profiles of around 250 programs that could be cut or taxes that could be levied, along with rough estimates of their budgetary impact. A new version of the report will come out next February.
Various politicians have used it over the years to craft budget plans. Ross Perot really put it on the map during his presidential campaign.
(Obligatory disclaimer: I’m one of the people who works on the report.)
One thing Congress should do: limit the US Military role. It is no longer 1945-and we cannot affort to defend japane, korea, W Europe, Africa, Taiwan, etc. yet the commitemnt grows every year-and our ability to pay for it drops. Think about it: why on earth are we amintaining armies and navies abroad-for no useful purpose?
Not exactly correct. The budget can be balanced, fairly easily. Clinton had a balanced budget, he actually had a surplus. I don’t think that Bush had a surplus though. The Federal Debt is another thing altogether. It would take us many years of budget surpluses to pay off the debt. Most of the debt is for social security I believe. None of it is for military pensions, btw.