The principal role of GOP in Washington is to hold
the coats of Democratic spenders
Last fiscal year Uncle Sam had some budget good news. After running $1
trillion-plus deficits four years in a row, Washington had to
borrow “just” $680 billion in 2013. Victory was at hand!
True, that was the fifth highest deficit in history, 50 percent greater
than the pre-financial crash record. But it’s only the taxpayers’ money, so
what’s the big deal? Politicians in Washington talked about the need to start
spending again. There certainly was no justification for sequestration, which
imposed a shocking, brutal, horrific 2.3 percent cut in federal spending. What
were legislators thinking when they approved that reduction? The government and
nation almost collapsed as a result!
Now Republicans and Democrats have come together on Capitol Hill for a new
budget agreement which increases both outlays and taxes. Bipartisanship in
action! That the Democratic Party wants to spend more is hardly surprising. But
the GOP has demonstrated yet again that its principal role in Washington is to
hold the coats of Democratic spenders when they raid the Treasury.
The legislation adopted by the House drops sequestration, which actually
trimmed federal outlays, and hikes spending over the next two years by $62
billion. In return, Congress promises to lower the collective deficit over the
next decade by $85 billion—while spending tens of trillions of dollars. The
accord raises revenue, including a very real $12.6 billion in airline taxes.
There are a few spending reductions—kind of. The bulk of them are entitlement
caps a decade hence, which even Sen. Jeff Sessions (R-AL), ranking minority
member of the Senate Budget Committee, admits are of “dubious validity.”
After all, in the same bill the House GOP voted to drop discretionary
spending cuts for 2014 approved just two years ago.
Yet the new entitlement caps are slated to take effect after two presidential
elections and four congressional elections. Which means the reductions will
never occur. The best that can be said is that the new outlays are trivial
compared to Uncle Sam’s gluttonous spending binge. The increase in so-called
discretionary outlays will be overwhelmed by the coming entitlement tsunami. We
won’t notice the extra bloat.
The only surprise in the sell-out was the role of House Budget Committee
Chairman and 2012 Republican Vice Presidential nominee Paul Ryan. Although no
radical, he nevertheless had seemed committed to a more responsible budget
path. Yet he traded real current spending increases for fake future spending
cuts, a standard congressional tactic running back at least to the infamous
Reagan tax hike of 1983.
Of course, holding only the House means the Republican Party has to
compromise, as it learned during the recent health care battle. Shutting the
government to defund ObamaCare always was doomed to fail. The Democrats held
both the Presidency and Senate and could not be expected to abandon their only
significant domestic policy achievement of the last five years. Moreover, no
Congress can bind future legislators, so at most a one-year funding pause was
possible. While the public disliked the federal health care takeover, most
people were not inclined to hold every agency and program hostage in a
GOP-orchestrated political battle.
However, a budget fight would have been far easier. The Republicans
wouldn’t have had to perform the Maori Haka while chanting death threats
against government agencies. The GOP merely had to support the fiscal status
quo, sequester included, unless the Democrats offered equivalent alternative
cuts.
The sequester was an arbitrary and inefficient tool, but it proved to be
the only practical means of restraining federal spending. As my Cato CATO +0.23%Institute
colleague Chris Edwards put it before Rep. Ryan waved the white flag, “In
theory, Republicans have the upper hand in budget talks because current law
specifies that discretionary spending will be modestly reduced in 2014 to $967
billion. Republicans always claim that they are for spending restraint, and
here they just need to hold firm on current-law budget caps to save serious
money over time.” Instead, the GOP tossed away its only weapon.
Earlier this year the Congressional Budget Office highlighted the stakes:
“Between 2009 and 2012, the federal government recorded the largest budget
deficits relative to the size of the economy since 1946, causing federal debt
to soar.” The debt-GDP ratio “is higher than at any point in U.S. history
except a brief period around World War II, and it is twice the percent at the
end of 2007.”
Today the national debt exceeds both $17.2 trillion and runs more than
$54,000 per citizen and nearly $150,000 per taxpayer. At 100 percent of GDP the
debt burden is greater than in Europe. Before the GOP
cave-in the CBO figured that in the best case Uncle Sam would add $6.3 trillion
more in red ink over the next decade. The annual deficit would drop to “only”
$378 billion in 2015. But then deficits would begin another inexorable rise. By
2023 federal ink would be $895 billion, warned CBO. The official debt-GDP ratio
would have jumped by a third. This
was the agency’s optimistic estimate.
....
Read more at :
....
Read more at :
No comments:
Post a Comment