Why was it so hard to get a budget passed that kept the federal
government open for the remainder of this year? Why did it take the
imminent threat of a complete government shutdown to broker a deal
that cut $38.5 billion from the 2011 budget? The American people
have a right to know the answers to these questions.
To be sure, a government shutdown of the magnitude nearly
realized would have been disastrous. For weeks, the entire country
was consumed with the possibility that basic government services
would have grinded to a complete halt. Finally, after three years
of record deficit spending, President Obama engaged and struck a
deal with House Republicans to cut spending.
Rather than eliminating spending, however, some of those
cuts were actually a rescission of spending authority for projects
and programs that the government wasn’t going to need anyway. The
Census Bureau, for instance, lost $6.2 billion for the remainder of
2011 — all money approved to conduct the 2010 decennial census.
Now that the census is over, the money isn’t needed.
Soon after the deal was announced, the Congressional
Budget Office (“CBO”) released a report that projected the total
“real” cuts would equal a meager $352 million. That’s roughly
1/1000th of one percent of the federal budget. Essentially, this
means that Congress and the White House battled it out over policy
matters for weeks on end to fund agencies at basically the same
level as last year. Indeed, decades of spending gluttony on the
part of both Republicans and Democrats has created a culture in
Washington where the real cuts in federal spending are harder than
ever.
Nevertheless, the combined $38.5 billion deal of real
spending cuts and budget rescissions means the federal government
will have less authority to spend taxpayer money this year. In
Washington, that’s a real victory.
All of this leads to a sobering realization. Uncle Sam is
not quite ready for the kind of austerity it will take to bend the
spending curve down to a sustainable path. House Republicans
approved a 2012 budget last week that promises to cut federal
spending by $6 trillion over ten years. True to form, President
Obama responded by announcing his goal of cutting spending by $4
trillion over the next 12 years. Of course, the president doesn’t
really hope to cut spending as much as he wants to reduce the
deficit. And the way he wants to reduce it?
By raising taxes.
The president says that spending cuts alone won’t
eliminate the deficit, but thus far he has refused to offer any
substantive proposal to reform entitlements like Medicare and
Medicaid, the greatest sources of uncontrollable spending. A report
last year from the Medicare trustees revealed that the program will
face a $38 trillion shortfall over the next 75 years. Moreover, the
CBO estimates that Medicare alone will consume 12 percent of our
annual economic output. The President has offered no proposal to
tackle these spending crises, and Democrats are already preparing
to scare seniors into believing that Republicans want to end rather
than fix Medicare.
If the budget battle of 2011 threatened the worst
government shutdown in memory in order to squeeze out $352 million
in real spending cuts, then it is difficult to imagine what will
happen when Congress begins the serious work of tackling
entitlements and other discretionary spending. In fact, at the rate
we’re going — borrowing more than 40 cents on every dollar that
Washington spends (mostly from China) — we’ll have to cut spending
by 40 percent annually to balance the budget. We’ll have to cut
even more if we hope to make a dent in the national debt, which is
now fast-approaching the $14.3 trillion ceiling.
At the bottom line, the reason it’s so hard to achieve
real spending cuts is that the way Congress approves spending is
fundamentally flawed. And while this year’s prolonged budget battle
managed to keep down spending increases across the federal
government and make only slight reductions in a handful of
programs, the real victory is that House Republicans have changed
the conversation.
When you have the president who signed multiple pieces of
trillion dollar legislation start announcing a goal to cut
spending, you know that a victory for fiscal responsibility is
within reach.
