Federal spending has ballooned 28 percent during the Obama Presidency while the government has amassed more debt than it acquired from the first day of George Washington’s administration to the last day of George H. W. Bush’s.
Unfortunately, the deal didn’t just pay our current bills – it gave the most spendthrift administration in history an open credit line to continue its spending spree beyond 2012. Ironically, it ended up costing the United States its triple-A credit rating by failing to rein in spending significantly. Indeed, Standard and Poor’s had explicitly warned for the last two months that $4 trillion had to be cut from the projected ten-year deficit to preserve the nation’s credit. Even if the plan works perfectly, it doesn’t come close.
Yet the same politicians who ignored these warnings were shocked-just-shocked when Standard and Poor’s lowered the boom four days later. Instead, they blamed the “Tea Party” that has been sounding the same alarm for more than two years.
Apologists for the debt deal claim that they “cut a dollar of spending for every dollar of debt increase.” Actually, Congress voted to “cut” annual federal spending from $3.7 trillion this year to $5.4 trillion by 2021, and to “cut” the national debt from $14.3 trillion down to $22.7 trillion. Washington defines this as a “cut” because it would rather spend that much more.
Even adjusting for such charming Beltway colloquialisms, most of the “cuts” don’t take place until after 2017 while the debt increase all happens this year. In the words of the great economist J. Wellington Wimpy, “I will gladly pay you a dollar of cuts ten years from now for a dollar of debt today.”
At least we didn’t get any tax hikes, right? We’ll see. The so-called “super-committee” that does the heavy lifting is charged not with cutting spending but with reducing the deficit – two very different things.
In Washingtonese, “tax increase” means the same as “spending cut” when referring to deficits. Since the debt deal already assumes restoring Clinton-era tax rates, it’s a good bet that tax increases are on the way. After all, since Congress has essentially frozen spending at record levels for the next two years, we’re going to have to pay back the trillions of dollars of new borrowing somehow.
Central to the deal is the success of the bipartisan super-committee (the 18th bipartisan commission since 1982 to solve the deficit, for those keeping score).
Set aside, for a moment, the constitutionality of sidelining 523 elected representatives of the people while 12 handpicked appointees of the legislative leaders convene in their place. If a bipartisan group of current members of Congress (which we often call, ‘the Congress’) can’t summon the political will to reduce spending to sustainable levels, why would we place far greater confidence in the proposed bipartisan panel of – wait for it – current members of Congress?”
To its credit, the House adopted two plans that met Standard and Poor’s criteria for preserving the nation’s triple-A credit rating: the House Budget Resolution (also known as the Ryan Plan) passed in April, and the Cut, Cap and Balance Act passed in mid-July. Both would have eventually balanced the budget, both would have ultimately paid off the national debt and both died in the Senate. This simple fact highlights the unfinished work remaining before the American people. Ultimately, they must decide whether they want to restore the traditional American principle of constitutionally limited government, or whether they are content to summarize this generation’s stewardship of the American Republic with the chilling epitaph of Louis XV’s reign, “After us, the flood.”