While many Americans resolve to make 2013 the year they really do slim down, exercise more, and spend less, Congress could afford to commit to a few such resolutions of its own. Call them budget resolutions—something Congress hasn’t had in a while. Here are five suggestions:
- Cut spending. The federal government is on course to run a trillion-dollar-plus deficit for the fifth consecutive year, driven by excessive spending. It spent $29,691 per household in 2012, borrowing $3.20 of every $10 it spent. Just as families must make budget priorities and live within their means, so too should Congress. Lawmakers should scale back the size and scope of the federal government, reform entitlement programs, and root out waste and abuse. If debt and deficits are ever going to be brought under control, Congress must curb its spending addiction.
- Return to the regular budget process. Congress has fallen out of the practice of budgeting, instead opting for ad hoc budget measures such as the debt limit deal (Budget Control Act of 2011) and continuing resolutions to fund the government. Budgeting is one of Congress’s main responsibilities; it forces Congress to regularly prioritize spending on programs, which is sorely needed. Congress must return to budgeting according to the regular order to control spending and promote transparency.
- Avoid budget gimmicks. Lawmakers and the White House have demonstrated their penchant for claiming savings that do not in fact exist. Practices currently en vogue include counting already planned reductions in war spending, promising vague savings, and exploiting budget loopholes to justify “emergency” spending and disaster assistance without offsetting it with cuts elsewhere. Lawmakers should reject these gimmicks and build their budget on policies that deliver real savings to restore their credibility and to rein in spending.
- Reform entitlement programs. Much more ominous than the fiscal cliff is the country’s real fiscal crisis, driven by the unsustainable growth in entitlement program spending. Social Security and Medicare spending in particular will be unaffordable if these programs remain unchanged. By the time today’s kindergartners enter college, spending on Medicare, Medicaid, Social Security, and interest on the debt will consume all tax revenue. Congress should pursue reforms with confidence, as some entitlement reforms—raising the Social Security and Medicare eligibility ages, adopting a more accurate measure of inflation for Social Security’s cost-of-living-adjustments, or reducing the Medicare subsidy for upper-income beneficiaries—claim bipartisan support. Bottom line: Washington must get serious about entitlement reform in 2013.
- Say NO to tax increases. Hiking taxes, particularly on the wealthy, as President Obama and some lawmakers want to do, would harm job creation when it is most needed. Higher taxes won’t fix Washington’s spending problem, relieve the burden of entitlement program spending, or close budget deficits. Tax hikes would only ensure more spending. Lawmakers must resist pressure to raise taxes and instead remain steadfast in efforts to cut spending.
The start of a new year invites a sense of optimism and offers an opportunity to get back on course. To reduce uncertainty in the economy, save young Americans from a mountain of federal debt, and restore its own institutional integrity, Congress should embrace these resolutions.
Let the work begin.
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