Today, Congressman Pat Tiberi (R-OH) and Ranking Member of the Ways and Means Committee Richard E. Neal (D-MA) introduced legislation to make the New Markets Tax Credit (NMTC) a permanent pa...
IN CASE YOU MISSED IT: DISPATCH: OP/ED: Taming the deficit will require more
By Jack Torry
During his speech at this year’s Democratic National Convention, former President Bill Clinton drew thunderous applause from the delegates when he said: “People asked me all the time how we got four surplus budgets in a row. What new ideas did we bring to Washington? I always give a one-word answer: Arithmetic.”
Unfortunately for everyday Americans, nobody in Washington seems to be paying much attention to arithmetic as President Barack Obama and lawmakers from both political parties continue to put off the tough decisions on bringing under control the federal government’s massive debt.
Even if the White House and Congress agree to an eleventh-hour deal to avoid the blend of tax increases and spending cuts that would go into effect tomorrow, they have given little indication they can muster the political courage anytime soon to restrain the growth of federal spending.
The numbers provided by the nonpartisan Congressional Budget Office are daunting. During the next decade, the government is expected to spend $46.5 trillion. No, that is not a typo.
So far, the acrimonious negotiations between Obama and House Speaker John Boehner, R-West Chester, have been over how to cut about $1 trillion in federal spending during the next 10 years while raising anywhere from $800 billion to $1.4 trillion in higher taxes. That is not a serious attempt to tame the deficit.
For the most part, the debate has revolved around whether conservative Republicans will blink and give Obama the tax increases he wants on wealthier households. The results of the November election mean the Republicans have lost that argument. Taxes for high-income households are going up.
But taxing the wealthy does not even begin to solve the long-term problem. Only by raising taxes on everybody can the federal government raise enough money to begin to climb the mountain of federal debt it has accumulated on a bipartisan basis since 1980.
No, the real problem — as Boehner has relentlessly pointed out — is spending. People don’t want to hear that. But the entitlement programs of Social Security, Medicare and Medicaid are the driving forces behind the deficit.
The CBO makes that very clear. From 2011 to 2022, Medicare spending will increase from $560 billion a year to $1.1 trillion. During that same period, Social Security spending will grow from $725 billion a year to $1.35 trillion a year, while Medicaid, which provides health coverage to low-income Americans, leaps from $275 billion to $592 billion.
“People have talked about the fiscal cliff, but the fiscal cliff is the symptom, it’s not the disease,” said David Walker, former comptroller general of the United States and founder of Comeback America Initiative, a nonpartisan organization that champions lower deficits. “The disease is the fiscal abyss,” he said, which includes millions of baby boomers retiring, rapidly rising health-care costs and what he calls an “outdated” income tax system.
We have reached this point because leadership is sorely lacking in Washington. Boehner wants to make a deal, but he is in a headlock because House Republicans hate higher taxes and Obama has not offered deep spending cuts. The Senate has been a spectator, failing to pass any budget during the past three years.
As for the leader of the Free World? The reality is nothing gets done in Washington without presidential leadership. That is something analysts privately say we have not seen from Obama. He probably can score a short-term victory in forcing Republicans to agree to higher taxes. But without a long-term plan to reduce spending, he is stuck with massive deficits for the rest of his term. And high deficits can cripple the economy.
As the CBO warned in November, “Federal debt cannot grow faster than the nation’s output indefinitely, and prolonged increases in debt relative to (the gross domestic product) can cause significant long-term damage to both the government’s finances and the broader economy.”
Jack Torry is chief of the Dispatch Washington bureau.