Listening to politicians talk about the nation’s deficit is like planning an ascent of Mount Everest without checking to see how high it is. A chief difference is that Mount Deficit continues to grow as you climb it. If you dally or get diverted, the top gets farther away.
Apparently, politicians in the midst of campaigns are too busy to check the altitude or to plot a course to the top. Oh, they’ll put various paths “on the table” to “take a look at” … once the election is over. However, if you’re like me, you’d like to see an actual route before climbing it. So I headed off to a veteran budget sherpa to learn just how challenging this will be.
The Concord Coalition was formed in 1992 by the late Sen. Paul Tsongas, D-Mass., and former Sen. Warren Rudman, R-N.H., to educate the public about “the causes and consequences of federal budget deficits.” A Democrat and a Republican working together. Quaint, I know. Anyway, if you want to understand the current and projected height of Mount Deficit and the difficulty of conquering it, concordcoalition.org is the place to be. Once there, look around for the policy brief titled “CBO update casts doubt on campaign rhetoric.” Read it, but make sure to have a bathroom nearby. You can only swallow so much campaign baloney.
The Democrats cannot address the deficit without getting much more serious about cutting spending. The Republicans will also fail if they refuse to raise taxes. Given the campaign rhetoric, it would appear as if Republicans, thanks to the insurgent tea partiers, are more serious about this matter. Appearances are deceiving.
Before congressional Republicans even get started on the current deficit, they want to deepen it by extending all of the Bush tax cuts. In addition, they want to keep the fixes that have protected six-figure earners from the alternative minimum tax. This will make the budget hole $3.9 trillion deeper over the first 10 years. Financing this debt will bring the total to $4.8 trillion. Left unchecked, these cuts will continue drilling a hole. Compare that with the “out of control” stimulus measure, which was a one-time $787 billion expenditure, or TARP, which is being repaid and will end up costing taxpayers an estimated $66 billion.
In addition, Republicans want to “repeal and replace” the new health care law. Say what you will about the plan, but at least it pays for itself with identifiable revenue sources. How will the GOP finance its replacement without raising taxes? Also, health care reform will largely close the hated Medicare Part D “doughnut hole,” which is a gap in coverage where seniors must pay 100 percent of drug costs. I’ve yet to hear how any replacement health care plan addresses Medicare Part D, so it’s fair to assume that the doughnut hole will be reopened.
But wait! There’s more!
Health care reform has extended the solvency of Medicare’s Hospital Insurance Trust Fund by 12 years and cut projected program costs for Medicare Supplementary Medical Insurance by 23 percent over 75 years. So repeal the law, and new revenue will be needed or the long-term prospects for Medicare grow dimmer.
So let’s take a breath and reassess.
If Republicans follow through on extending all the Bush tax cuts and repealing the health care law, they will be facing a much taller Mount Deficit. Seems a crazy way to run an expedition.
You can’t handle the truth. The truth is that few people want to hear the truth. You can’t climb Mount Deficit without raising taxes and taking on Social Security, Medicare, Medicaid and defense spending. Those are the four biggest budget items, not counting the annual interest we pay on the debt. Freezing discretionary spending, banning earmarks, ending stimulus and “going through the budget line by line” are all fine if the goal is summiting the tallest hill in Kansas.
Now, not all politicians are hiding the pain. The “Young Guns” in the Republican Party are talking about it. To his credit, U.S. Rep. Paul Ryan, R-Wis., has a “road map” to a balanced budget. It involves steep tax cuts for the wealthy, the elimination of most deductions and credits and the introduction of a federal consumption tax that would keep taxes about the same for the middle class. It would turn Medicare into a voucher program, wherein seniors would be given a lump sum to go buy private health insurance, and it would remake Social Security and Medicaid. Overall, it would slash spending to 1951 levels.
It’s bold. It’s ambitious. And it balances the budget and pays off the debt … in 2080, according to the Tax Policy Center. To get there sooner, Ryan would need to raise taxes.