Skip to comments.After November 2 (The reality: Cuts of the size necessary to balance the budget are going to hurt)
Posted on 10/28/2010 7:40:29 AM PDT by WebFocus
If Republicans want to keep power, they are going to have to show the courage to make some very, very tough decisions.
Although the polls are still in flux, it looks increasingly likely that Republicans will win a big victory next Tuesday. But that doesnt mean that Americans have fallen in love with them.
In fact, even as voters prepare to put Republicans in charge of the House and possibly even the Senate, polls show the Republican party to be only slightly more popular than used-car salesmen. A recent Pew poll showed that only 24 percent of voters approve of Republicans in Congress.
Therefore, if this election is going to be the start of a long-term trend and not a one-time blip, the new Republican-dominated Congress is going to have to deliver. In particular, Republicans are going to have to follow through on their promises to reduce government spending and the deficit. Nothing was more central to Republican campaigns this year, and it was a critical issue to the economically conservative, socially moderate suburban voters who backed Democrats in 2006 and 2008 but switched to Republicans this year. But promises of balanced budgets may prove much easier than actual budget cutting.
Of course, the Pledge to America calls for returning some discretionary spending to 2008 levels. But by 2008, spending was already out of control. Moreover, the pledge does not specify exactly which programs Republicans plan to cut. Unfortunately, budgets have to be balanced on specifics, not generalities.
To show just how tough balancing the budget will be, consider an analysis by the National Taxpayers Union Foundation of the budgetary proposals of four Republican candidates: Pat Toomey in Pennsylvania, Carly Fiorina in California, Marco Rubio in Florida, and Mark Kirk in Illinois. Most of their calls for spending cuts (or increases) were too vague to be fully costed out. But once the budget proposals that could be assigned a price tag were added up, Fiorina was the champion cost cutter, calling for a net reduction in government spending of $155 billion. Rubio was close behind with $153 billion. Most of Pat Toomeys proposals could not be scored, but the cuts that could netted just $2.5 billion in savings. And Mark Kirk would actually increase spending by $734 million.
To be sure, this is a lot better than their opponents. Toomeys opponent, Joe Sestak, for example, has proposed spending increases of more than $100 billion. But in the face of a $3.55 trillion federal budget and a $1.3 trillion deficit, its going to take much bigger cuts than have so far been proposed.
During an election campaign, it is perhaps understandable if candidates avoid specifics when talking budget cuts. After all, every program has a constituency that would be alienated by proposals to cut it. But when Republicans turn from campaigning to governing, they are going to have to make cuts that will offend powerful voter groups. Cuts of the size necessary to balance the budget are going to hurt simply cutting the usual waste, fraud, and abuse isnt going to get there.
For example, no serious budget cutting can take place without addressing entitlements. Some Republican candidates, including Toomey, Rubio, Ron Johnson in Wisconsin, Joe Miller in Alaska, Rand Paul in Kentucky, and Sharron Angle in Nevada, have shown a willingness to consider some creative ideas for entitlement reform. But the Republican leadership in Washington has not been as brave. The Pledge to America exempts programs for the elderly from the proposed cuts, and congressional Republicans spent much of the debate over health-care reform posing as defenders of the elderly from Medicare cuts. They are going to have to do a lot better than that.
The Pledge also keeps defense spending away from the budget knife. But if Republicans are really serious about balancing the budget, the defense budget is going to have to be on the table. Defense now accounts for nearly 23 percent of all federal spending and more than half of all discretionary spending. The Pentagon should be subject to the same scrutiny as any other government agency. This will require a thorough review of Americas commitments around the world. Slashing spending while continuing our current policies risks leaving our troops stretched far too thin or without the equipment they need. But at a time of massive debt, should we not be asking whether the U.S. really needs to keep troops deployed in 135 countries? Can we afford to fight two wars indefinitely? Shouldnt countries such as Japan, Germany, and South Korea be asked to pick up more of the cost of their own defense?
If Republicans win this election, it will be because voters recoiled from the big-government, big-spending, big-deficit policies of the Obama administration and congressional Democrats. That was enough for Republicans to gain power this year. If they want to keep it, they are going to have to show the courage to make some very, very tough decisions.
Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.
I already know that, and I HAVE known it for many years. I have been preparing for it as best I can. But the cuts ARE necessary for the survival of our country; and the longer we wait, the worse the 'hurt' is going to be.
Cuts will hurt? Not at all. I’m one of those people Obama hates, I’m white, middle class, and get no assistance from the government.
The EPA and Endangered species act are prime examples of things that have to be drastically curtailed or completely done away with!There is no end to what liberals will sacrifice for a damn fish or insect!!
Band-aid. We have had too many band-aid solutions over the
years and nothing has gotten better. Time to rip all of
the band-aids off. Do it quick. Sure it’s gonna hurt,
but the real healing will begin, post-haste.
That's funny....I agree, cut away.
How bout starting at the Depts of Internal Revenue, Education, Energy, Commerce...
There is plenty to cut. Fact is, if O-bozo and all his crew at the federal reserve keep pumping out monopoly money, we are never going to get a handle on this.
Cuts, cuts!!! Well that is going to cause a lot of rebellion. But we can accomplish a lot by simply following one of the tactics of the left...change the definitions.
But our biggest obstacle right now is we don’t have people in place within the bureaucracies.
The elected leaders will be in place, but they have abrogated so much authority to the agencies we will accomplish very little. An example is leaving it up to the EPA to define their own rules? That essentially gave them the ability to make their own laws without ever a glimpse or debate in congress. This is true throughout government and their agencies.
RE: The EPA and Endangered species act are prime examples of things that have to be drastically curtailed or completely done away with!
Actually the first thing we need to do is ELIMINATE the US Department of Education and return the money to the states and let them decide how to educate their kids.
Jimmy Carter created this bloated department in 1979 and all it has done is create a huge bureaucracy that wastes money and does nothing to improve education.
Our country’s educational system was the best in the world long before this bloated federal department came into existence.
30 years after this department was born, everything has gone DOWNHILL from there and their solution is to continue throwing money at it.
Let’s eliminate it and save taxpayers the money. All it has done is prove that government does nothing but waste our money and subsidizes a lot of useless, politically correct ideas that do more harm than good.
2010 - unemployment rate = ~10%
2012 - unemployment rate = ~ 12%-15%
2012 - Obama re-elected in a landslide... unless of course the private sector is poised to hire all the laid off Gov workers.
Just a potential Halloween nightmare. ;-)
I’m not sure if it is possible to fire all of government and start over.
I think it will come in the form of the states rallying around the 10th amendment.
The fed will then play it’s hand and send in forces.
If that happens, it will be painful, but We the People
will have a shot of restoring this country to it’s rightful
place at the top. If this happens, we will not realize the
fruit of it, but our kids will. And their kids will.
That, for me, is motivation enough.
I have no problem with anything you said. Of course you can just hear the screams from the dims...I don’t think at this time the republicans have the cajones to do it!
The Republicans should use psychology and American ingenuity to obtain cuts from within the bureacracy.
Everyone knows that government bureacracies spend any unexpended money at the end of the year to avoid cutbacks in their future budget.
Republicans should offer ‘profit sharing’ bonus to all employees of all departments of government who can reduce costs during the budget year and produce a surplus in their budget by the end of the year.
For example, a 5% surplus (eg, unexpended funds due to better management and elimination of waste) would give the employees of a department a bonus of 2.5% of the savings.
Budget for the next fiscal year would be based on the net actual expenditures of the previous year plus an allowance for inflation.
After that, pass a similar cut in federal employees, including Defense (but non-combat personnel).
Set the stage with these, then get to work on entitlements. Freeze benefits through the 2012 election cycle and increase FICA by 0.5% or something. Again, just get people used to the idea that things are going away. Have the 2012 presidential candidates then run on what their plans for continuing the trend are.
Just cut everything not authorized in the constitution.
Some items may require a gradual transition to ween people off the government teat.
Other expenditures, like foreign aid, subsidies to agriculture, handouts to unions, colleges, think tanks, political groups like ACORN, etc, can be cut immediately.
I beg the Republicans to save themselves by distinguishing between cuts. Not all cuts are the same.
They can get major savings from some types of cuts, with some political repercussion, but not an intolerable amount. And it will be remembered that they did the right thing, and it was for the benefit of us all.
However, there are minor savings they *could* get from other types of cuts, that could get them savaged, politically. These are not worth it, and it might even be to their benefit if they considered small *increases* to these, even while cutting the rest.
In the former case, look at Social Security. Not too long ago, it was proposed that “means testing” be used for recipients, which raised a hostile outcry, so was discarded. I agree, because it was too direct.
Instead, they could turn this into a virtue. Instead of renewing the Bush tax cuts, tell SS recipients that have other income or money, that instead of taking the SS money due them, they can *instead* get a tax deduction slightly *larger* than the money they were due.
They will actually get a little more money this way, while leaving more money in the SS system for others, those who don’t have other income or savings. As such, this will do a LOT to restore the SS system to solvency.
At the same time, they should shut down the “front door” of SS, for everyone but its original intended members, minimum wage workers with no other source of income. For everybody else entering the work force, they are no longer part of the SS system.
This is a positively *friendly* way to get SS back into order, and will hardly register in making enemies. High return, low punishment.
Alternatively, the type of cut the Republicans should not, under any circumstance, make, because it is both irrational and will get them severely punished, is food stamps.
To start with, America is awash with food. If the Republicans can set back that dumbass waste of corn, converting it into ethanol, we will easily be back to wasting hundreds of tons of food every year.
Oddly enough, by giving that food away before it rots, actually *saves* money, because otherwise it has to be expensively warehoused. And it doesn’t hurt retailers, because surplus food has minimal processing. People who can afford their food prefer processed food.
But if the Republicans do something dumb, and cut back on food stamps, they will make enemies for generations. They will convert entire families to support the Democrats. And it won’t save a dime.
If anything, the Republicans should be the “Cornucopia” party for the unemployed and hungry. Every food bank in the US should be bulging at the seams with free government surplus food, with a multicolored elephant stamped on it.
An incredibly cheap way to get future generations of people voting for Republicans.
Or conversely, just roll back the budget, cutting the last item and so on until the budget is balanced.
I wouldn’t worry too much about the cuts. Neither party has truly cut spending in over 50 years. I doubt they will now.
I’m not worried about them.
I would welcome them.
Yes, I too am concerned that 20010-12 could end up being a repeat of 1994-96 —
— gains for republicans in congress one year, a worthless POS president re-elected two years later.
First cut, Public Broadcasting and National Public Radio.
Department of Energy, they haven’t produced 1 kilowatt !
Department of Education, they educate no one!
Any study remotely resembling the sexual habits of tree frogs
high on cocaine!
Entitlement debit cards cashed on cruise ships.
I can think of much more !!!!!!!!!!
I beg the Republicans to save themselves by distinguishing between cuts. Not all cuts are the same.
You are right, not all cuts are the same, but, if you cut all the spending except social security and Medicare there would still be a deficit. All the money coming in in all the taxes the government collects will not pay for these two programs alone.
In a few months I will be old enough to collect social security. I paid into it all my life, I am angry that my money is not there. I was smart enough to save for my retirement in case the social security was not there so I will not be terribly hurt but just the same a few thousand dollars extra a month would be very handy.
I see no way to fix this other than putting off the retirement age. Just saying this publicly will get a politician crucified but that is the ONLY way we can be solvent. If and when this happens I will be mad as hell but I guess I already am so what difference does it make.
If you ever vote for a democrat you need to have your head examined. They have nearly destroyed this country and may succeed in doing so yet.
I don’t know if you can tell but I am very angry. I hope that a large majority of voters are also very angry and punish those that have done this to us.
Well, they could raise the retirement age for Social Security to 67 and 70 incrementally for openers or privatize it. Of course, that would probably throw the next election back to the Dems. Remember the saying....Cut, cut, cut for thee, but not for me!
......punish those who have done this to us....
The getaway driver and the perpetrator are BOTH guilty of first degree murder if a death is involved. BOTH parties and Presidents of BOTH parties did this too us even if one was more egregious than the other.
“I see no way to fix this other than putting off the retirement age.”
Well, that’s on the table, but let’s see how it goes with my idea first.
If you need that money right now, fine, you get, say $500 a month, if that’s what you’re due. But if you have other income, wouldn’t it make more sense to take a $700 tax deduction, instead of a $500 payment? You would get $200 a month more. In effect, painless means testing, determined by you, not the government.
Importantly, this wouldn’t “cost” the government much, either, because this tax deduction would be offered *instead* of renewing the Bush tax cuts, which might likely happen anyway, if Obama is to veto their extension.
So the bottom line is, if you need your SS money, you get it.
If you have other money, you can get the equivalent of your SS money, and some extra, by *not* taking your SS money. Thus keeping money in the SS system to go to the people who need the SS money.
And if you have money, you get this tax deduction *instead* of the Bush tax cut, which you will probably lose in any account.
So this is pretty much win-win-win. Nobody really gets hurt.
The GOP might be hurt more by winning this election if the economy doesn’t improve.
There’s always going to be blood spilled when people’s rice bowls are cut.
I don't think that works, for many reasons. First, a $700 deduction does not translate into $700 in your pocket. At the 25% bracket, for example, it translates into $175 in your pocket. So yes, you'd save some money on the government side, but I don't think you'd get many takers on the public side.
I was thinking of an adjusted amount after the fact, giving those who deduct an actual +$200 out of the deal. There is considerable flexibility, because they would be replacing the substantial Bush tax cuts. So if you figure what extra amount they are receiving because of those cuts right now, it is probably much greater than any $200 bonus.
And the bottom line is to stabilize SS so it can be slowly dismantled, except for its original purpose, as a retirement for minimum wage people with no other source of retirement, with the minimum of pain or ripoff for everyone concerned.
In the post election hubub of euphoria or depression, depending on which side you’re on, the thing we have to fear most is that relic from a bygone era of horse carriages and long and arduous travel, the Lame-Duck session.
An anachronism if there was any, it may well be used in ways unforeseen and on a larger scale than heretofore experienced.
The last segment, the youngest, will never have SS as we know it. They will continue to pay FICA, but a percentage (say 50% with incremental increases over time) is dedicated to a personal account, fully vested and owned by the individual.
Obviously, optimal breakdowns of age groups and percentages of FICA are best left to those smarter than I, but I think this approach is likely to be the most widely accepted. I do not know if this approach would solve any problems, however.
The problem goes back to the origins of SS. It did have a valid purpose, but for *only* that one, limited group, of minimum wage employees with no other means of retirement. Restricted to just them, it was a sensible system, for a full, substantial retirement.
However congress kept adding people who should never have been part of that system. Their perverse idea was to have a national full retirement system for everyone but government employees. As you can tell from the numbers, there is no way all those people could ever get a full retirement.
But by keeping them in the system, they also deny those who were supposed to get a full retirement from having one, instead of a pathetic stipend.
So the question is not how can this, or some other form, of government controlled or managed retirement be created; but getting government out of the retirement business altogether, except for former government employees.
But how can SS be reduced to just those it was supposed to take care of in the first place, and those who are now dependent on the system, while cutting loose everybody else and without screwing them over for what they have already contributed.
What I described was the first step, that is, exchanging tax deductions for payments for those for who the payments are not essential. And this alone, by keeping that money in the SS system, will extend the life of the program for those depending on it.
The actual dismantling of the program is similar to what you proposed, but with the idea of ending it for most people, instead of trying to keep them in the system.
For this, I would recommend “retroactive” tax deductions+, which would “pay them back” for their contributions, but not with payments, with tax deductions and some extra. Since they are not currently taking from the system, the deductions will be for their estimated time they expect to *remain* earning a living wage.
Say they have been paying into the system for 20 years, and have only 5 years left to retirement. They would get 20 years worth of deductions plus extra, that they could use up to 100% of their income tax in those last 5 years. Anything still remaining beyond retirement would be a mix of actual payments and deductions again.
So, in effect, their last 5 years of work would be close to tax free. Which strongly helps build a retirement nest egg.