Let the Budget Battles Begin

 

By Alan Caruba

The announcement of a new fiscal budget for the U.S. government always sets the stage for struggles between the spenders and those trying to put some limits on the spending. The spenders usually win because politicians—particularly progressive ones—love to tap the national treasury in order to reward their supporters.

As the Speaker of the House John Boehner said on the occasion of the March 17 announcement, “For 53 of the last 60 years, the federal government has spent more than it has taken in. It is unacceptable.” Not so unacceptable that one Congress after another has not seen fit to ignore common sense and fiscal prudence.

The sheer enormity of the budget tends to overwhelm and I suspect that most voters pay little attention to it and the issues it represents except to want assurances that their benefit check arrives. Rarely mentioned or largely unknown is the size of the nation’s unfunded liabilities, long term obligations in Medicare and Social Security. In 2014 they reached nearly $49 trillion with a “T”.

Our annual Gross Domestic Product, (GDP) what the U.S. takes in for goods and services is about $14 trillion. Our current national debt is $18 trillion and growing. Regarding the unfunded liabilities, Romina Boccia of The Heritage Foundation noted last year that they were “nearly three times the size of the total national debt or more than $150,000 for every person in the U.S.” He predicted that “even the most vulnerable Medicare and Social Security beneficiaries would see their benefits drastically cut after 2030.”

Here’s another way of looking at our debt. When interest rates return to normal WE are going to be paying several hundred billion in interest on our current $18 trillion debt. In short, we have to desperately start cutting spending NOW to reduce that debt. Or else!

The 2016 budget announced by House Budget Chairman Tom Price represents Republican values. As the Wall Street Journal noted, it “would cut spending by $5.5 trillion relative to the status quo over the next decade, reducing federal spending to 18.2% of the economy by 2024. The share today is 20.3% and is headed toward 22.3% in a decade on present trend.” It’s useful to keep in mind that every dollar the government collects and spends is one less dollar that the private sector can spend on starting and expanding businesses large and small.

All that money represents opportunities for waste that are mind-boggling. A recent article in CNS News reported that “Medicare and Medicaid made a combined $77.4 billion in improper payments in fiscal 2014, a 20.4 percent increase from fiscal 2013, according to data published by the Government Accountability Office and the federal paymentaccuracy.gov website.” Twelve government programs that wasted money made the Government Accountability Office list including the school lunch and public housing/rental assistance programs.

The good news about the new fiscal budget is that it openly calls for repealing ObamaCare. It also outlines deregulating Medicaid to give governors more flexibility. It is a terrific fiscal burden. The budget took note of the fact that there are too many duplicative government programs such as 92 antipoverty programs. The Congressional Budget Office estimates that consolidating such programs would increase real GDP per capita by 1.5% in 2015. Eliminating a whole bunch of them would save even more.

Jane M. Orient, M.D., the Executive Director of American Physicians and Surgeons, and a policy advisor to The Heartland Institute, warned that “there seem to be some good first steps, such as block-granting Medicaid to the states. But even Republicans aren’t admitting that their budget also involves fighting over money that we don’t have, that the Federal Reserve will create out of faith and credit.”

“Also absent,” said Dr. Orient, “is recognition of the crushing burden of regulation, especially EPA rules to destroy a huge portion of our electrical generating capacity, with heavy subsidization of costly, unreliable, environmentally destructive wind and solar projects that can’t possibly replace coal, nuclear, or natural gas. Or recognition of the destructive impact of the Department of Education. How about devolving environmental protection and education back to the states, too, along with Medicaid?”

“This new House budget,” said Peter Ferrara, a Heartland Senior Fellow for Entitlement and Budget Policy, “shows the passing of the Age of Obama and the broad gulf of difference between today’s conservative Republicans and the modern, ultra-Left, extremist, neo-socialist Democrats. Reagan-life, the plan would balance the budget without tax increases, while modernizing our increasingly dangerously lagging military.”

The Wall Street Journal editorial pointed out that, “As important, failing to pass a budget would also deprive Republicans of the procedural tool known as reconciliation. This allows the GOP to pass a final budget with a simple majority in the House and Senate, and thus it will be crucial to putting larger reforms of ObamaCare or taxes on Mr. Obama’s desk. A vote against the budget is in that sense a vote for the ObamaCare status quo.”

In sum, the proposed budget represents a serious effort to enact reforms that are long overdue. These and other measures are needed to encourage economic growth, the heart's blood of the nation.

© Alan Caruba, 2015