Friday, February 11, 2011

Gary Palmer: Excessive government spending is a bi-partisan problem

  It is time for Republicans in Congress to cut federal spending as promised and keep faith with the voters who put them back in the majority.

  According to a report released on February 8th from Rasmussen Reports, 1954 was the last time government spending in the U.S. declined in one year's time. Federal, state and local governments alike are now reaping the consequences of decades of excessive spending and poor stewardship of taxpayers' money. Unlike the federal government that can print more money, state and local governments are being forced to balance budgets or risk going bankrupt. In a February 7th article, The Wall Street Journal reported that "Governors around the U.S. are proposing to balance their state's budgets with a long list of cuts and almost no new taxes, reflecting a goal by politicians from both parties to erase deficits chiefly by shrinking government. So, if states can do it, why can't the federal government?"

  That is a good question that Democrats and Republicans alike should have to answer.

  Excessive government spending is a bi-partisan problem. Rasmussen reported that "... from 1954 to 2010, Republicans controlled the White House for 34 years and Democrats for 22. Democrats controlled Congress for 44 years and the Republicans for 12." Regardless of which party has been in power, there has not been one year since 1954 when government spending declined from the previous year.

  After decades of excessive government spending and a growing federal debt, the public is finally aware of the stark fiscal condition of government at every level.  Consequently, government spending was arguably the top issue for voters in the 2010 election. Promises to cut spending are mainly what allowed Republicans to pick up 63 seats in the U.S. House of Representatives and six seats in the U.S. Senate while also winning a majority of the governorships and a record number of state legislature seats.

  The problem for members of Congress in both parties is that spending cuts could have major political consequences. People from all demographics are accustomed to big government programs - social welfare programs along with programs that support the arts or fund local projects. And Americans seem to accept and expect deficit spending by their federal government ... until now.

  Finances are so bad at the state level that state political leaders have little choice but to cut spending. With federal deficits at historic levels, tough spending cuts must be made by Congress as well. Members of Congress must realize that the failure to make serious spending cuts will have political consequences, especially for the new Republican majority in the House of Representatives which promised to bring fiscal discipline to the federal government.

  During the 2010 campaign, the Republican candidates for Congress promised to cut $100 billion from the current fiscal year spending. The Republican Study Committee (RSC), the conservative bloc of the Republican members of the House, unveiled a plan that would cut $74 billion from the current fiscal year. The federal government's current fiscal year started on October 1, 2010 and ends on September 30, 2011. Since the Republicans took office three months into the fiscal year, cutting $74 billion from the remaining budget would seem to be reasonable. But given that the federal government's budget is so bloated with unnecessary spending, the Republicans should press hard for even more cuts and fulfill their promise.

  In January, Republican members of the RSC introduced H.R. 408, The Spending Reduction Act of 2011 that if fully implemented, will reduce federal spending by $2.5 trillion over ten years. According to the RSC, H.R. 408 would roll back fiscal year 2011 non-security discretionary spending to 2008 levels and non-defense discretionary spending to fiscal year 2006 levels. The bill would also eliminate or downsize more than 100 federal programs.

  The problem with this is that the federal deficit in this fiscal year is approaching $1.5 trillion. Ten short years from now, the annual deficit is projected to be $1.9 trillion with a total federal debt reaching nearly $25 trillion. Brian Riedl, lead budget analyst for The Heritage Foundation, points out that in ten years the interest on the federal debt will be $1 trillion alone which would take up almost half of all income tax revenue.

  Clearly, Republicans in Congress must come up with a plan to reduce federal spending, including spending on entitlement programs. Voter concern over out-of-control government spending swept Republicans into office. But when it comes to actual spending cuts, many of those same voters will oppose cuts to programs that benefit them, especially entitlement programs.

  Implementing necessary cuts will require a depth of political strength and courage that no Congress has shown since 1954. Failure to make the necessary cuts will have consequences far more severe than any political consequences.

  About the author: Gary Palmer is president of the Alabama Policy Institute, a non-partisan, non-profit research and education organization dedicated to the preservation of free markets, limited government and strong families, which are indispensable to a prosperous society.

1 comment:

  1. When Gary Palmer and other corporate funded policy shop shills suggest ending subsidies and handouts to Big Ag, Big Energy, and Big Defense I'll consider the argument. Right now, he and his want to cut spending on everything but these areas corporate America love. John Gunn