The following editorial appeared in the Chicago Tribune:
“In part because of the higher tax rates and curbs on spending scheduled to occur this year and next, CBO expects that the economy will continue to recover slowly, with real GDP growing by 2.0 percent this year and 1.1 percent next year. ... In CBO’s forecast, the unemployment rate remains above 8 percent both this year and next. ...” — Congressional Budget Office
Americans with normal vision could go blind reading all the fatalistic projections like those issued Tuesday by the nonpartisan Congressional Budget Office. Or citizens instead could lessen their stress by asking everyone who works in the U.S. House, Senate or White House: Please, earn your pay.
The CBO’s new Budget and Economic Outlook doesn’t lash our federal lawmakers for failing to do their jobs. It does, though, document the rapid rise on their watch of federal debt as a percentage of our gross national product — from an alarming 68 percent in 2011 to a siren-wailing 75 percent in 2013.
Fairly foreseeable circumstances dictate what happens after that. A nonpartisan private group, the Committee for a Responsible Federal Budget, on Tuesday summed up the future facing beleaguered taxpayers: The good news is that under provisions of current federal laws, the debt would become more manageable a few years from now. The bad news is that sticking with those current provisions is politically unrealistic, not the best way to proceed and not a long-term fix.
The committee says projecting a rosy reduction in federal debt as a share of our economy assumes that lawmakers will do four things that the committee rates as highly unlikely: (1) allow the tax cuts of 2001, 2003 and 2010 to expire as scheduled, (2) suddenly allow the alternative minimum tax to smack millions more households, (3) fail to enact another so-called doc fix to preserve Medicare payments to providers, and (4) stick to automatic spending cuts triggered by Congress’ failure last year to reach a “supercommittee” deal on cutting future deficits and debt.
If you instead think that Congress and the White House will try to weasel out of Washington’s current and controversial commitments, then the true projected increase in debt would be enormous: The CBO says debt held by the public would rise to 94 percent of GDP in 2022 — the highest figure since just after this financially exhausted nation ended World War II.
What does this mean? That the politicians we send to Washington are fiddling while the taxpayers’ future burns. Expanding debt burdens will devour ever more of our government’s resources.
Congress and the White House spent most of 2011 failing, miserably, to reach a Go-Big deal on spending and revenue that would begin to curb the nation’s runaway debt — currently rising toward $16 trillion. Democrats fought spending cuts. Republicans fought tax cuts. Our own preference has been for a three- or four-to-one ratio of cuts to tax hikes.
But achieving any real solution would, heaven forbid, offend interests or industries or individuals. So Congress decides mostly by indirection, making short-term fixes to problems such as the alternative minimum tax, and inventing deadlines after which spending cuts and tax increases automatically occur. How skittish are lawmakers about expressing real convictions on our government’s disastrous finances? The U.S. Senate hasn’t passed an annual budget in more than 1,000 days.
Many of those senators, like irresponsible legislators in Illinois and other profligate states, act as if some robust economic recovery will spare them from offending their political bases and actually ... cutting ... deficits. The CBO is ready to puncture that silly-gas balloon. The agency warns that the trajectory of future deficits probably depends less on how well the economy performs than on “the fiscal policy choices made by lawmakers as they face the substantial changes to tax and spending policies that are slated to take effect within the next year.”
That is, lawmakers really do need to decide whether to let the Bush and Obama tax cuts expire, which would raise taxes in a weak economy, and whether to let across-the-board spending cuts take effect as scheduled in 2013.
Better to reform the tax code now, take steps to constrain the growth of entitlement spending tomorrow, and make the spending cuts and revenue hikes that will begin to lower our debt. Those measures would prime the U.S. for growth, encourage businesses to expand, and create more jobs.
Aspirants to Congress who come before our editorial board seeking endorsements keep talking about how Washington needs to make “the tough choices,” the “hard decisions” about slashing our immense federal deficits. This year spending will exceed revenues by more than $1 trillion for the fourth consecutive year.
If responsible budgeting genuinely strikes our political class as tough or difficult or hard, then these folks need to find another line of work.
Members of Congress, President Obama, please, earn your pay.