October 25, 2014

Washington: America Needs a Budget

Paul Hansen, Western regional director for the Concord Coalition, wrote this guest column which appeared Friday in the Missoulian. 

Those of us who work full time encouraging America to live within our means see a sharp contrast between many elected officials in Washington and the rest of America.

For 21 years, staff members of the nonpartisan Concord Coalition have crisscrossed the nation discussing the causes and consequences of federal deficits, the challenges facing America’s entitlement programs, and ways to build a solid foundation for economic growth. We find that most Americans get it; they realize we cannot continue to pile up huge amounts of debt.

Congress has left little time to put together a funding plan for fiscal 2014, which starts Oct. 1. No enterprise as great as the United States of America should operate without a budget.

Even worse, some irresponsible lawmakers are again threatening not to raise the government’s debt limit. There is no question that it must be raised so the government can pay its bills on money already spent.

This would be true under the Republicans’ House budget, the Democrats’ Senate budget, the President’s budget or the status quo. All three proposed budget plans would require several increases in the debt limit over the next 10 years.

Holding America hostage to get the cuts or spending certain politicians want is risky for our economy and costly for taxpayers. There should be no delay in voting to increase the debt limit.

Nor should there be a delay in finding a compromise plan to reduce the growth of the debt. While some progress has been made in reducing annual deficits, the accumulated debt remains on an unsustainable path, threatening our economic future. After a few years, deficits are projected to begin rising again, adding trillions more to the debt over the next 10 years and beyond. 

Even though recent cuts have put annual domestic spending on a path to historically low levels, some in the House still want more cuts in that part of the budget, such as an additional reduction of 27 percent from the Fish and Wildlife Service and 83 percent from clean water grants. Cutting small programs like these will scarcely dent the deficit.

Real deficit reduction requires doing things with big-ticket items, such as reforming the tax code and the social benefit programs: Medicare, Medicaid and Social Security. We must deal with health care, where our costs per person are at least twice what other developed nations pay.

We also cannot stabilize the debt without reforms to our arcane tax code. Lawmakers in both parties have built their platforms around giving more tax breaks and benefits to preferred groups and paying for it with borrowed money.

Each year more than $1 trillion is given away by special credits, deferrals, deductions or exceptions. Many of these “tax expenditures” provide expensive subsidies to preferred interests without the political risk of writing a government check.

To make matters worse, the tax code is so complex that even the IRS says just figuring out what we owe costs Americans $165 billion a year. Some conservative economists say that figure is much higher.

Senate Finance Committee Chairman Max Baucus, D-Mont., and Ranking Member Orrin Hatch, R-Utah, have suggested a “blank slate” approach to tax expenditures in which proponents would have to make an affirmative case for why each should be retained. It is a promising idea that could grow into a broader “grand bargain” on fiscal policy.

Rather than engaging in another dangerous debate on the debt limit, Congress should do its business by passing a budget that moves America closer to balancing spending and revenue. In a democracy, that means both sides must compromise.

Paul Hansen is the Western regional director for the Concord Coalition. He lives in Jackson, Wyo.