Saving America for Future Generations, Cliffs and All
When Katharine Lee Bates wrote America the Beautiful in 1893, she sang the praises of our purple mountain majesties and fruited plains, but she made no mention of our cliffs, although we do have a sprinkling of them across the country. Little did she know that 119 years later, our whole country would be headed over a cliff, fiscal though it may be. Thankfully, the Heritage Foundation is helping to fulfill her prayer and to mend our nation’s flaws:
God mend thine every flaw,
Confirm thy soul in self-control,
Thy liberty in law!
Heritage experts Alison Acosta Fraser, William W. Beach, and Stuart M. Butler have produced valuable research and proposed suggestions for saving the American Dream during “fiscal cliff” negotiations and beyond. Heritage is putting forth the ideas necessary to reverse the negative Washington trends of fiscal irresponsibility, out of control spending, and excessive taxation, which are all affronts to our liberty and prosperity.
They explain that the only attempt to rein in spending that has been made since the Saving the American Dream plan was published in 2011, was the Budget Control Act (BCA). The BCA was the trigger for the combination of spending cuts — which hit our military the hardest — and tax hikes, which will hit all Americans as well.
The word “attempt” is key here, because as outgoing RSC Chairman Jim Jordan (R-OH) said yesterday, “Not one of the scheduled cuts, not one of the promised cuts in the debt ceiling agreement last summer, not one of them have taken place yet and it’s now time to raise the debt ceiling again.” Of course, the BCA was never meant to save America; it was simply a political gimmick. Washington needs less political gimmicks, not more.
Notably, the core requirement of the Saving the American Dream plan is to exercise serious fiscal control and to rein in politicians’ vicious penchant for spending, which has driven our debt to unfathomable heights. Spending should be brought under control, and tax revenues should be held at their historical share of gross domestic product (GDP), roughly 18% of the economy.
The area in most dire need of spending cuts is entitlement spending. The numbers don’t lie. Yet, sequestration leaves entitlements “virtually untouched.” It’s imperative to understand, though, that conservatives do not simply want to cut Medicare, Medicaid, and Social Security entitlements. It’s not a budget slashing exercise to punish grandma, but rather, we suggest that the “core foundations” of these programs be strengthened.
Also, note that liberals want to allow these programs to spiral out of control. Clearly the liberals aren’t channeling Katharine Lee Bates. Indeed, the growth of entitlement programs is “automatic, with autopilot spending increases built in and no serious budgetary constraints.”
Rather than extend the benefits of these programs only to those who truly need them, as conservatives would have it, liberals would just as soon have swaths of Americans become dependent upon them needlessly. Want proof? Try this pudding: 62 percent of the federal budget goes to entitlements and the Congressional Budget Office (CBO) estimates that spending on entitlements will double by 2050, reaching 19 percent of the entire economy.
In other words, entitlement spending will swallow every bit of tax revenue coming into the federal government, leaving no money for anything else, including defense, unless taxes are raised significantly. Now you can see why the left is so eager to get Republicans’ fingerprints on tax increases.
Heritage also suggest (liberals, you might want to sit down for this one) that the “federal government must be restricted to its proper functions.” This means that other spending must be curbed, and “[d]efense, as a core constitutional function of the federal government, should be fully funded and efficiently delivered.”
Spending cuts must be accompanied by structural reforms to the tax system that will foster growth “by eliminating tax distortions of private economic decisions, especially on savings and investment.” The system should also be made “simpler and more transparent.” Moreover, the federal budget is also strained by other mandatory spending such as unemployment compensation, a problem exacerbated by the high unemployment rate, but also through politicians’ desire to be there when someone hurts.
Heritage has laid out specific steps that Congress and the President should follow to save the American dream. Among these is that the President should submit a budget by February 4, 2013 deadline “that outlines strong, sweeping changes in entitlement programs that will reduce spending over the 10-year budget window.” Perhaps President Obama should set his own goal though, of submitting a budget that can actually garner support from at least one member of Congress.
The President’s budget should contain a “revenue-neutral tax reform plan.” Also, rather than increasing the debt limit, Congress and the President should reform entitlements and implement further reductions in other spending areas, including Obamacare.
As far as the fiscal cliff goes, Heritage suggests that all of the 2001, 2003, and 2010 tax cuts should be extended. The automatic defense sequestration provisions should be eliminated and offset with other broad spending reforms. The “doc fix” should be extended for one year, and the Sustainable Growth Rate Formula should be rolled into Medicare reform. The payroll tax cut should be extended for one year, and the alternative minimum tax should be extended. Finally, unemployment benefits should be wound down to 63 weeks nationwide with a pathway for continued reduction back to traditional level of 26 weeks.
Failure on the part of politicians to heed these recommendations will have catastrophic results for our nation. Unfortunately, that is not an exaggeration. There is “hope” yet and time for reform, but it is running out, and conservatives have laid out in great detail a path to renewed prosperity.