Cutting $1.5 trillion from the federal budget, supposedly the goal of the Super Committee, sounds daunting. When you put those numbers into the context of the total federal budget and our exploding national debt, however, you realize it shouldn't be so hard. The Committee's real challenge—and it's a doozy—is a political system that discourages common sense.
The $1.5 trillion in cuts would take place over a decade, which means the committee needs to come up with about $150 billion per year. According to the President's most recent budget, the federal government will spend about $3.8 trillion in 2012, and $4.5 trillion in 2016. Surely the Super Committee can find ways to trim less than five percent away from the annual budget. Keep in mind that just ten years ago, in 2002, the federal government was spending a comparatively meager $2.0 trillion, or less than half of 2016 expected outlays. Asking the federal government to make do with about what they were spending in 2010 hardly seems draconian.
Yet these numbers aren't the Super Committee's primary obstacle. The real problem is that we've become a nation used to government spending moving in just one direction: higher, and usually much higher. Any cut, no matter how modest, is cast by big government supporters—including legions of government workers and growing number of businesses and other entities dependent on government financing—as an assault on those in need.
The reluctance to cut may seem surprising since polls show Americans believe government spends and wastes too much. Politicians know Americans' instinctive distaste for big government, which us why they all cast themselves as pillars of fiscal prudence.
When government ballooned from under $3.0 trillion in spending in 2008 to more than $3.5 trillion in 2009, politicians wisely sold it as a temporary reaction to the economic crisis. Yet today, that extra spending is just part of the baseline. The media wouldn't cover attempts to return to 2008-levels as a simple phasing out of the emergency stimulus. In media-speak, that's a massive slashing of federal programs. And not surprisingly, the President's budget never comes close to 2008-levels again.
The public lets politicians get away with this because, while they express support for less spending in general, they gets squeamish about specific spending cuts. They wish the total budget was smaller, but aren't so keen on measures to curb the costs of Social Security, Medicare, and Medicaid (the big drivers of our long-term debt problems) or on attractive-sounding programs, such as the environment, education, or infrastructure.
Democrats embrace this cognitive dissonance: They claim to support fiscal discipline, but demonize any proposed entitlement reform as an assault on the elderly and poor. Never mind if reforms would affect only high-income seniors. Somehow “the rich” can always afford to pay more in taxes, but any reduction in transfer payment to wealthy seniors is out-of-bounds.
The President's Bipartisan Fiscal Commission echoed the findings of just about every commission that's studied the federal budget since the Reagan administration. Getting our fiscal house in order begins with controlling the cost of entitlements. President Obama ignored this inconvenient recommendation, and Democrats on the Super Committee stand poised to do the same.
So the real question facing the Super Committee—and indeed the United States in general—is just how dysfunctional is our political system? Has it now become essentially impossible to reduce government payouts to any pleasant-sounding interest group or cause?
It's easy to look at the crisis in Greece and be stunned by the Greeks' unwillingness to recognize the simple truth that their basic government structure is unsustainable. Yet how different is the United States today? Our debt crisis has yet to reach Greek-levels, but today we watch as a so-called “Super Committee” of American representatives balk at cutting a mere $1.5 trillion from federal spending over ten years, when our deficit this year alone was more than a trillion. If these cuts aren't possible today, when will we ever get spending under-control? Are we waiting to suffer Greece's fate before we act?
That's why Americans should be deeply concerned about the Super Committee's deliberations. It's not because of their specific budget cuts are so critical. It's what they tell us about whether our political system is equipped to solve our serious, long-term fiscal challenges.
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