House Republicans announced Thursday that they will cut $74 billion from the president's budget for the current fiscal year. Just $32 billion will be slashed before the end of the calendar year however---far less than the $100 billion Republicans promised ahead of November's congressional elections.
According to Wisconsin Republican Paul Ryan, who chairs the House budget committee, it's just a start. "The spending limit measure marks another step in House Republicans' continued efforts to change Washington's pervasive culture of spending," he announced.
Let's hope so. As the Congressional Budget Office (CBO) reminded us last week, America is on an unsustainable fiscal path, borrowing an unprecedented $1.5 trillion this year, or almost 10 percent of GDP. If no serious spending reductions are enacted, the national doubt will amount to 100 percent of GDP by 2021.
As a result of massive deficit spending in the past years, Congress will have to vote to raise the federal debt ceiling this spring. According to Ryan, lawmakers "must first work to enact serious spending cuts and reforms. Endless borrowing is not a strategy."
One way to reverse the trend is to freeze federal spending altogether. Revenues collapsed to barely 15 percent of the national income as a result of the recession but the CBO estimates that tax revenues will grow by an average of 7.3 percent annually over the next decade.
Without an increase in government spending, the budget will balance itself by 2014. Even if spending is allowed to keep pace with inflation and grow at 2 percent a year, the budget balances before 2020.
Legislators are unlikely to adopt such a proposal however as it would effectively amount to across the board budget cuts, year after year. No politician likes to go back to their constitutes every two years to announce that there's less money available for their children's education and their parents' retirement again---not unless they make clear that government has no business educating children and providing for people's pensions that is.
Instead, here are some comprehensive proposals that Washington should consider:
- Former Republican majority leader Dick Armey and Tea Party organizer Matt Kibbe identified hundreds of billions in potential spending cuts two weeks ago.
- Kentucky Senator Rand Paul has some $500 billion in spending cuts (PDF) that could be implemented this year.
- Fox Business' John Stossel also sees hundreds of billions in spending that could go.
All of them propose to abolish entire departments of government, including energy and education which should be left to the free market. Even without addressing America's looming entitlement disaster, they manage to balance the books! Surely, Republicans can do better than a meager $32 billion?