We were blessed, well, maybe blessed is not the correct word here, with a broad overview of the sweeping changes proposed by the leaders of the Deficit Reduction Panel this week. Frankly, in looking over the details, I agree with Gerald Seib, a columnist for the Wall Street Journal, who wrote, “Deficit-Cutting Chairmen Call Washington’s Bluff.” However, I would take his statement even further because the Chairmen are also challenging all of us, in particular the right. As I said last week, campaigning is the easy part. Now the Tea must be poured. These newly elected representatives will be required to detail specifics of spending cuts and government funding. No longer can they get along with bumper sticker statements that sound so good. They are about to touch the third rail of politics.
Is it possible to significantly reduce our federal deficit without an increase in revenue? As the right tries to tell us, can we pay fewer taxes and reduce the debt and maintain fundamental services? The Deficit Panel says no to both questions. The Chairmen told both parties, and us, to get our heads out of the sand because any changes are going to involve significant pain. The simplistic 20% solution – reducing all federal department budgets (except defense) by 20% – is a coward’s solution. No critical decisions have to be made about what programs should be eliminated. It is a “solution” that gives the bureaucrats the power to decide what to cut so that Congress can vilify them and claim that is not what they meant to cut. We already see it on a state level. It has been the preferred method of budget cutting by the Georgia legislature. So much for political accountability. The 20% “solution” is a typical political dodge.
Unfortunately, when you look at the deficit reduction plan proposed by the panel, it is the middle and lower classes that get creamed – and hard. Yes, they do lower both individual and corporate tax rates but, in exchange, most deductions are eliminated, including home mortgage interest. Current Social Security benefits are slated to be cut and “wealthier” individuals will have their Social Security benefits means tested. Where the line will be drawn to separate the wealthy from the non-wealthy is anybody’s guess at this point. Medicare will be slashed, discretionary spending cut by $410 billion by 2015, and the federal workforce cut by 10%. Defense and Homeland Security agencies would see a $100 billion reduction.
On the positive side, earmarks would be banned. Right now, it looks like Republicans are going to duke it out on that issue. Georgia has two senators that are big on pork. Saxby Chambliss even ran on a platform of bringing home the bacon just a few short years ago and won overwhelmingly.
Now here is the most interesting part. Whereas the panel is proposing $3.8 trillion in budget cuts, that is only HALF of the projected $7.7 trillion INCREASE in debt by 2020 – resulting in a federal deficit of $17.5 trillion ($13.7 trillion currently plus projected $3.8 trillion) in 2020. The overwhelming burden is going to be placed on the very children and grandchildren we hear so much about.
Here is how I see it. These huge deficits have been brought on by the baby boomer generation and their irresponsibility spending. As a result, the baby boomers should not be coddled now with a pretend stab at the deficit, leaving the biggest burden to their children. In addition to these significant budget cuts, taxes should be raised on the baby boomers. They should have to pay for their irresponsibility now, and not leave such a financial mess to their children. Everybody should stop whining about the deficit and step up to the plate. There is no reason to shunt the deficit down the road. Increase taxes on baby boomers now and raise corporate taxes as well. Corporations have a responsibility to contribute to democracy just as the rest of us.