The Republican Party rose to power last week on the mantle of smaller government, spending cuts and tax breaks for everyone. However, its main asset last Tuesday was an unpopular opponent.
The country is worried about debt and deficits, but it is mostly because the people aren’t sure all that money is making their lives any better. That point is up for debate, and probably won’t be clear for another decade or two, and politics is a game played in the present.
Since the Republicans have taken the House, they have a chance to move forward with their key fiscal goals. With a Democratic president and Senate, it’s unlikely they can pass something that will truly rein in the federal budget, but they can at least demonstrate they have a plan and need help from the voters to get it through.
The central talking point of the Republicans this year was a freeze in non-defense discretionary spending, which returned a portion of the budget to prerecession levels. That’s a fine start, but it’s only the first step if we’re ever going to see a balanced budget.
Most estimates put savings in the range of $100 billion. The total deficit is larger than $1 trillion and growing, so obviously more needs to be done. Anyone with a middle school education could tell you to close a budget deficit, you need to raise revenue or cut costs.
Raising revenue is a tall order in America because tax increases are like nails on a chalkboard. The federal government can raise revenue in other ways, like a more efficient system or by fostering economic growth, but neither of those will get us all the way to a balanced budget. So while we can move toward higher revenues, the real focus must be on the other side of the ledger.
Any serious attempt to bring the budget under control needs to take decisive aim at government spending. The Republicans’ plan to cut non-defense discretionary spending is good, but we need to cut far more.
First, despite it being taboo in most Republican circles, we should evaluate cuts in defense spending. This is another area that won’t save much, but it should still be placed under consideration.
The United States spends more on defense than any other country. The percentage of its GDP used on defense is similar to many other countries, and the U.S. has military commitments that are critical to the safety of other nations as well as our own.
That being said, we should still take a serious look at the Pentagon’s budget. The military shouldn’t be
exempt, and we should cut waste and open up competition when awarding contracts. We’re likely to save less than $100 billion a year, but we shouldn’t just blindly shield defense spending.
The key focus of the cuts, however, needs to be on the non-discretionary part of the budget. Entitlements like Social Security, Medicare and Medicaid, which make up about half of all government expenditures should be examined. These programs are growing faster than any other part of the budget, and little has been done to slow that growth.
There are many ways to restructure those programs. Some of these include privatization, raising the retirement age or cutting benefits. The best solution is probably a mix of all three.
Ultimately, the goal needs to be making those programs a supplement for people in need, and not their entire income.Since the advent of welfare programs in the 19th Century, people have grown more reliant on them.
When we instituted them in the United States in the 1930s and ‘60s, we put ourselves on a path to insolvency.
The reductions need to come in waves. The total benefits have to decrease for younger Americans until we have a program capable of paying for itself. Younger generations should start planning now for a world without so much government assistance so they can be prepared to finance their own retirements.
This solution is part practical, part ideological. From a practical standpoint, the current system is unsustainable. We must cut costs if we hope to keep our heads above water.
Ideologically, we would all be better off if we shifted responsibility back to individuals. This is especially true of the wealthy and the middle class, two groups that should be able to save for their own retirements if they plan accordingly.
Social welfare programs should be a safety net, not a reward for 45 years in the labor force.
This is the kind of plan we need to see in Washington. This is the kind of honesty we need if we’re going to make any progress. Some Republicans, like Paul Ryan of Wisconsin, are touting this message, while others are being politically safe and just talking about the non-defense discretionary cuts.
If we’re going to do something about the debt and deficit, politicians will need to make unpopular statements, and we need to let them. We need to understand cutting Social Security doesn’t mean our grandparents will all of sudden end up on the streets.
We need political amnesty for anyone willing to speak out on these key issues because it’s the only way we’ll get a plan that addresses the problems and not just the politics.