Time and again, Congress bumps up against the debt
ceiling amid talk of finally getting spending under control. Time and again,
they raise the ceiling, but only after a sufficient dose of political theater.
How’s this for a punch line: The gross debt breaks down to more than $140,000
per American household. Still not laughing?
Small wonder that more serious-minded lawmakers are
trying to escape the cycle. They don’t want to risk another credit downgrade,
which happened for the first time ever in 2011, the last time both sides were
playing political football with the issue. Avoiding another downgrade, though,
will require a lot less theater and a lot more action.
“The United States of America, the most creditworthy
nation on Earth, ought to pay all its debt in a timely fashion,” said Rep.
Steny H. Hoyer, Maryland Democrat and House minority whip. “Playing politically
motivated games with the creditworthiness of the United States will only risk
another downgrade.” Exactly, and so it’s past time to get spending under
control.
Some GOP lawmakers have other ideas, however. The
latest proposed tactic: attract conservative support to yet another debt-limit
increase by tying it to tax reform. GOP lawmakers have long argued for a
thorough overhaul of the nation’s tax code, which is needlessly complex and
weakens the economy by perverting incentives.
There’s no question that tax reform is a worthy
goal. But this is no time to fall for the old “fake stick toss.” To agree to
raise the debt ceiling in exchange for a vague promise to pass some kind of tax
reform somewhere down the road would be a mistake.
It would be a different story if the debt limit were
to increase if and only if President Obama signed into law a concrete
tax-reform proposal, one that actually instituted the kind of pro-growth tax
reform our economy needs. That might be worth supporting if the tax reform was
good enough. It all depends on the details.
It’s true, as economist J.D. Foster notes, that “tax
reformers have good reason for optimism.” There is bipartisan interest in tax
reform, and Ways and Means Committee Chairman Dave Camp, Michigan Republican,
and retiring Senate Finance Committee Chairman Max Baucus, Montana Democrat,
are working to find a way to harness that interest and get something accomplished.
Mr. Obama has voiced support for tax reform as well.
There seems to be broad agreement, at least in principle, on cutting the
corporate income-tax rate and making the tax code simpler, more transparent and
more conducive to economic growth.
“All good,” Mr. Foster writes in a recent blog post,
“but there is as yet only the outlines of broad consensus, and much, much work
left to do, a message given greater weight by the recent release of a 568-page
tome on tax reform by the Joint Tax Committee.”
Enacting, not simply voting on, pro-growth tax
reform can help, but the real fiscal problem lies on the spending side. Absent
reform, spending on entitlement programs such as Social Security, Medicare and
Medicaid is set to rise sharply over the next few decades. It’s all set to
happen automatically. Ruinous debt is guaranteed unless action is taken to get
spending under control.
That won’t happen if lawmakers keep kicking the can
down the road. It’s time to focus on the steps necessary to bring the budget
back into balance within 10 years. When it passed the Ryan budget in March, the
House of Representatives signaled its commitment to achieving a balanced budget
within that time frame.
That can’t happen unless we do something different.
As in “Groundhog Day,” we can’t break the cycle by repeating the cycle. It’s
time for a game-changer: Only serious spending cuts followed by genuine tax
reform can ensure that we don’t find ourselves doing this all over again. And
again.
About the author: Ed Feulner is founder of the
Heritage Foundation.
This article was published by the Heritage
Foundation.
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