By Robert Bixby and Sara Imhof
The toxic level of partisanship in Washington that threatens to throw the government into default shows why it is crucial for American voters to demand action on the enormous fiscal challenges facing the country.
Our fiscal problems go far beyond the short-term debt crisis that looms in August. We have a fundamental mismatch between spending and taxes that is not sustainable.
Long-term projections issued last month by the Congressional Budget Office tell the story. Social Security, Medicare and Medicaid costs are expected to explode because of the aging population and rising health care costs.
By 2035, just to offset the growth of these three programs would require cuts of a bit more than what we spend on national defense today. Trying to pay for their growth with taxes alone would require that income taxes nearly double. On the other hand, a borrow-as-you-go approach would run the debt up to a staggering 190 percent of the economy by 2035 — if the economy didn’t collapse before then.
Putting a limit on the debt doesn’t change any of that. It just means we would refuse to pay our bills. Passing a balanced budget amendment to the Constitution would also defer the hard choices. Until the government actually changes policies by cutting spending and/or raising taxes, we will continue to rack up massive deficits.
Yet our officials are behaving as if they were sent to Washington to engage in endless political gamesmanship rather than actually make the difficult choices required to put the federal budget on a sustainable path.
Americans must make it clear to elected officials and political candidates that we expect better. Much better. This is not a partisan problem. There is blame to spread around.
With the government already nearing its legal debt limit earlier this year, Republican lawmakers approved a plan in the House that calls for $1.9 trillion in additional borrowing through 2012 and $9 trillion over the next decade. Yet they now complain about what a bitter pill it is to sit down with Democratic leaders to discuss raising the debt limit by enough to accommodate the budget they voted for.
The GOP has painted itself into a corner on tax policy, with some Republicans so intent on scoring political points with their anti-tax rhetoric that they end up defending billions of dollars in wasteful subsidies that are built into the tax code to benefit favored businesses and individuals.
As for the Democrats, President Obama’s budget this year largely ignored the sweeping recommendations of his own bipartisan fiscal commission. He, too, talks about austerity while proposing trillions of dollars in additional borrowing in future years, even assuming a full economic recovery.
And even when Obama said he was ready to deal with Republicans on spending cuts, many congressional Democrats warned that he could not count on their support. They apparently prefer to merely take shots at the Republican budget from behind the safety of their own blank legislative slate.
Our fiscal challenges demand a more serious and ambitious approach. Ratings agencies, warning that the United States could lose its top credit rating if it fails to get its fiscal house in order, have expressed concern about political gridlock. Moody’s said “the degree of entrenchment into conflicting positions has exceeded expectations.”
Political leaders must move beyond their short-term focus to favor a more comprehensive plan combining tough domestic spending cuts with reductions in military spending, reform of the big entitlement programs, and fundamental changes that would simplify the tax code and improve its efficiency.
Voters should demand that incumbents in federal offices and their challengers explain with some specificity how they intend to put the nation on sounder financial footing. Vague calls to “get tough” on spending by eliminating waste, fraud and abuse or to simply “close loopholes” and “tax the rich” are not enough.
What, specifically, would they cut? How would they put Social Security and Medicare on a sustainable path as millions of people leave the work force each year and medical costs continue to rise rapidly? What loopholes would they close? How do they define “rich?”
And as recent weeks have made all too clear, it is critical that voters ask politicians how they will deal with those with whom they disagree. We have more than enough public officials in Washington who can throw blame, cater to selfish impulses and duck responsibility. This is not a one-party nation. No solution will be possible without compromise.
What we need now are an engaged public and courageous political leaders who actually get things done.