It would seem obvious to most people that, when facing bankruptcy, the time for saving loose change in the jar has probably passed. However, the politicians battling over the budget on Capitol Hill seem to lack this basic intuition. While it would appear that the logical approach to solving our nation’s deficit crisis would be to look for savings and cuts in the largest areas of government spending, Republicans and Democrats alike are unwilling to address the root cause of government spending: entitlements and taxes.
For nearly six months, the federal government has been hobbling along on emergency spending bills that are preventing a complete shut down of non-essential government programs. On March 15, Congress approved another such delay bill that kept the government afloat until early April.
Both parties have been avoiding passing a budget while they bicker over the minuscule cuts to the budget. Republicans, who retook the house in the November elections, promised their electorate $100 billion in cuts and have so far only been able to come up with $61 billion in cuts from federal discretionary spending, a sum that constitutes about 10 percent of total discretionary spending.
Their proposed cuts range from eliminating public funding for PBS to funding for EPA regulations. Democrats have bitterly fought the cuts sometimes on principle, creating the stalemate that if unchecked will cause government operations to grind to a halt.
And while they are locked in an ideological clash over what needs to be cut, both parties are ignoring what should be glaringly obvious: Their cuts are in the wrong places. According to the Congressional Budget Office, for the 2010 fiscal year, federal non-defense discretionary spending comprised about 19 percent of total federal government spending.
Meanwhile, the combined spending of Medicare, Medicaid, Social Security and other mandatory government spending was 55 percent of spending. Spending on these programs has balooned over the past decades into enormous government expenditures. As the Economist magazine reported on March 10, between 1990 and 2009, Social Security Disability Insurance spending increased 420 percent to $110 billion while Supplemental Security Income increased 124 percent. Government spending on health care and benefits has been increasing steadily over the past decade with no increased revenue to support their growing cost.
Along with government spending, the government’s revenue collection also needs to be addressed. The U.S. income tax code, first implemented under Woodrow Wilson in 1913, has grown from a relatively simple 400-page document to a baffling 70,000-page tome lengthier than the King James Bible.
As the Economist magazine reports, Americans spend 7.6 billion hours a year struggling with their taxes, equivalent to an industry six times the size of the auto industry. A simplified tax code, one that eliminated the myriad of exemptions and reductions that favor wealthy Americans and corporations, would be greatly beneficial in securing much needed revenue for the government.
Reforms in both government spending and taxes are not a foreign concept. In 1983, both parties agreed to cuts in Social Security and in 1996 Bill Clinton negotiated a restructuring of welfare benefits. In 1986, the tax code was rewritten and many exemptions were eliminated.
Of course, both these reforms carry with them enormous political ramifications and both parties are reticent to take up such contentious issues so near election time. However, it is times such as these when we need our politicians to make the decisions that our best for the country and not best for their seat in Congress.
It’s time that our leaders follow the examples of the past and attack the deficit at its heart by cutting bloated government spending and simplifying convoluted revenue collection. The time for idling has passed and all the painless cuts have been made. Our country cannot afford to keep adding seconds to the ticking time bomb of the deficit. It must be defused and defused quickly.
