The following editorial appeared in today's Los Angeles Times:
In the past few years, Congress has funded the government by setting unrealistically low spending limits, breaking them, and then covering the difference by payment shifts and budgetary gimmicks. This fiscal year, Congress has ceased even to pretend to stick to budget discipline. With much of its work still to be done, Congress is on track to appropriate some $630 billion to $640 billion for discretionary spending, nearly $100 billion above the cap it set in 1997.
That still leaves some of the leftover non-Social Security surpluses to pay down the debts so we don't have to worry about renewed budget deficits yet. But splurging on this scale makes a mockery of the surplus projections that the presidential candidates use in their spending and tax cut plans. It is also going to make it much harder for Washington to deal with the coming Social Security and Medicare crises.
Both Gov. George W. Bush and Vice President Al Gore start out with a Congressional Budget Office estimate that, if the economy keeps growing over the next 10 years, if the markets that generate taxable capital gains remain bullish and if spending increases at the rate of inflation, the revenue surplus will add up to $4.6 trillion.
Most of it $2.4 trillion would come from unspent Social Security revenue that both parties have pledged not to touch. Bush would spend most of the $2.2 trillion that's left over on an across-the-board tax cut. Gore favors a smaller cut and big spending programs. The math is a lot fuzzier than either candidate admits.
The Center on Budget and Policy Priorities and other independent budget analysts calculate that, if Congress keeps spending at the current rate, extends programs that expire but are routinely renewed and sets aside the $360 billion in Medicare trust fund surpluses, the $2.2 trillion will shrink to $700 billion over the next decade.
There is still hope that the budget office has underestimated the surpluses it has done so before and that the economy will generate even bigger surpluses. The new figures are due out early next year.
What the economy will not support is the huge obligations the nation's health and retirement programs face in the coming decades as the baby boomer generation starts drawing benefits. In a sobering estimate published earlier this month, the budget office warned that even in the most optimistic scenario, one in which the government saves every penny of the extra cash, surpluses will turn into deficits so large they would smother economic growth. The long-term revenue forecasts may be off, but the demographic trends are unmistakable. America is aging, people live longer and their demands on medical care grow. A free-spending Congress is hastening the day of reckoning.
© 2016. All Rights Reserved. | Contact Us