Yes, I know the headline is oft repeated. Perhaps it is because it captures a bit of wisdom. But, let me go from the personal to the public — America’s taxpayers. Plus, we should include those persons who depend on a wide range of government payments.
Republicans won a majority in the House of Representatives in November. Their thin majority and disputatious Members have been the focus of much reporting about the resulting divided government. Let me suggest that is keeping our collective eye on the halftime entertainment, not the game. And, in politics the cleverest politicians are good at turning ball games into shell games.
The ball, or pea under the shell, is in the House of Representatives and it is public finance, specifically spending. The House, and only the House, can originate revenue bills and one area of universal agreement is that we are spending more than our will to generate offsetting tax revenue. And we are now just past the eve of a $2 trillion spending gusher legislated last year.
President Biden has said he will not negotiate spending bills in the context of setting a debt ceiling. Without a new and much increased debt ceiling our government will be unable to pay all of its obligations. That outcome of course is not acceptable, thus both high and low drama.
Now I could get into the arcana but readers would quickly skip ahead to whatever is next. So let me simply say that the media should sharpen its focus on the deepening debt and how/when it will be resolved. The Congressional Budget Office has a relatively good reputation; they should be the scorekeeper.
It is easy to shine a spotlight on Marjorie Taylor Greene and Matt Gaetz; they are buffoons and worse but as we all know the government is a three-ring circus and if the principal spotlight is on several clowns in one branch the intricacy of the acrobatic acts is missing.
Discretionary spending in the 2022 budget was $131.8 billion and 5% of that is $6.6 billion. That would be my targeted reduction in spending and it should be evenly spread across the entire spectrum of discretionary spending. Inevitably it will be said by those who advocate the status quo or budget growth that 5% is too deep a cut in particular programs. The advocates should introduce specific bills for increases in discrete programs and those should be voted on one at a time.
And remember that in 2022 mandatory spending was $1.5 trillion. The House majority should project within a given number of years a balanced budget including both discretionary and mandatory spending. And if cuts and GDP growth cannot balance our accounts over a reasonable period of time, then further cost reductions and/or tax increases should become a part of the budget.
I repeat: the ultimate problem is we are spending more than we are willing to underwrite with revenue bills. President Biden can see his legacy as programs but it is also about spending. If his legacy includes irreparable damage to the dollar’s value and our international credit worthiness, history will pair him with Herbert Hoover.
Al Sikes is the former Chair of the Federal Communications Commission under George H.W. Bush. Al writes on themes from his book, Culture Leads Leaders Follow published by Koehler Books.
Letters to Editor
Brian J. Corden says
You do not discuss revenue enhancement by taxation of those who can afford it. I realize that is anathema in a Republican controlled House, but why should a handful of Representatives determine the well being of millions.
Thomas Elliott Hill says
Nice article, Al. Expenses and the discipline to live within a reasonable budget are the key to our county’s future. Thank you for pointing this out to us.
JT Smith says
My friend Al appears to define the discretionary portion of the budget so as to omit more than $ 750 billion of defense expenditures. Since few favor cutting this major portion of discretionary expenditures, increased taxation would appear imperative for those concerned about deficits and debt. I
Raise revenue by taxing the very rich at the same levels of a
nurse or bus driver or State employee. Clinton raised taxes on the wealthy and left Bush with a surplus. That was when the Republicans went crazy.
What is wrong with this nation? “Trickle down” is voodo economics.
Only the rich and the corporations benefit.
Mickey Terrone says
Al, there is no question the federal government spends more than it takes in. Average Americans pay high taxes so that the wealthiest few and the largest corporations can unconscionably build their enormous personal wealth and astronomical salaries and profits.
Average voters, Democrats and Republicans alike are being squeezed even as our traditional tax deductions have been minimized or eliminated. Average Americans have struggled for years now, even with two wage earning households, to make ends meet with rent, prescriptions, food and transportation, much less accumulating savings. Millions of families are dangerously vulnerable to major medical bills and 63% of Americans are living paycheck to paycheck, and lest we forget the threats against “entitlements” like Social Security.
Thus, serous cutting of government funded services such as public health, housing and other assistance for low income families, education and job-training, infrastructure jobs, veterans’ medical care and most other discretionary funding severely impact average folks. No one wants to cut the defense budget.
Hopefully, the House Republican Goon Squad won’t be able to dumb down the majority of their party’s rank and file to refuse to raise the nation’s debt limit. Yet, we know McCarthy has quietly agreed to propose some major budget cuts in order to get elected Speaker. None of the conspirators are willing to identify which categories will be cut back. At some point, they will have to go public so their poor white constituents can see how their ultraconservtive representatives are willing to choke off their tenuous hold on staying afloat.
I trust the Democrats will make the case that defecits are largely caused by the failure adequately to tax the wealthy and big corporations without adding to the tax bill of anyone making less than $400,000. If there is any moderation among House Republicans, they will have to craft a budget that requires the wealthy to pay more without slashing into the middle and lower classes’ ability to survive.
Let’s hope the lunatic fringe doesn’t gain complete control of the Republican majority and that the needy lower class “bypassed” white Republican voters will begin to grasp the damage they are enduring at the hands of their own extremist House officials, now in effective control of Congress.
Now that Charles Koch has jettisoned Trump for 2024, perhaps Republican deer in the headlights like Andy Harris won’t shiver in fear over getting primaried by some howling Trump fanatic. At some point, McCarthy et al, will have to begin articulating where they want to make their huge cuts without raising taxes on the wealthiest individuals and corporations. Its highly doubtful Joe Biden’s legacy will be compared with Herbert Hoover. His policies are antithetical to Hoover’s “hands off” ideas. Biden’s plan to raise taxes on the wealthiest, to protect the lower classes while building back our infrastructure and economy, to maintain our social safety nets and protect our national security demonstrate his willingness to act decisively. Irreparable damage to Biden’s legacy would be comparisons with Donald Trump’s historical damage to our American democracy and middle class.
Al Sikes says
Thank you for the comments. I tend not to reply because I have voiced my views and am very pleased to elicit comments pro/con from others.
I noted CBO as having a reasonably good reputation and believe a variety of loose lipped Members should be challenged to quite concretely put forward spending and revenue plans with scoring by CBO.
I do not believe anything should be off the table, Wealth tax. Value added/sales tax. Marginal rate increases. Etc. And on the spending side Defense should be on the table,
Again, thanks for the comments.