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Modest Spending Restraint Can Balance the Budget in Ten Years
An Open Letter to the United States House of Representatives:
March 19, 2012
By Andrew Moylan
On behalf of the 362,000 members of the National Taxpayers Union (NTU), I encourage you to call for and enact a budget resolution that reaches balance within ten years. The principle is a simple one: though the roots of some federal financial problems are decades-old, Congress effectively created our current budget mess over roughly ten years and it is reasonable to expect to fix it in the next ten. This goal can be achieved through prudent spending restraint and without damaging tax increases.
Ten years ago, our federal budget had just dipped into deficit after four straight years of surpluses. The national debt to begin the year totaled less than $6 trillion, nearly $10 trillion less than the staggering amount we face today. Total outlays were considerably more than $1.5 trillion lower than we expect to spend this year even after accounting for modest reductions associated with 2011’s’s Budget Control Act. We have added more than three times as much (in inflation-adjusted terms) to our debt in the last decade as we did from 1940-1949 when America spent vast sums of money to win a global war against fascism and genocide. Simply stated, the last decade has been the most fiscally disastrous reign in this country’s history. Several years of progress on budgetary discipline were not only thrown out the window, but stomped on and set ablaze after thudding into the ground below.
The good news is that while change in Washington is always difficult, getting to balance within ten years does not require draconian cuts in programs. Even if all of the 2001 and 2003 tax cuts were extended, the budget will balance within the next decade if Congress can simply commit to a more prudent expenditure path. Allowing spending to grow at 2 percent per year, a rate slightly higher than the 1.7 percent annual growth from 1996-2001, would achieve balance by 2021. A slightly lower 1 percent annual growth rate would get us to balance in 2018, and a spending freeze would tip us into surplus by 2017.
Last year, House Republicans commendably passed the first budget resolution in modern memory that made a serious attempt to reform the entitlement programs threatening to cripple our budget, all without economically destructive tax hikes. The Republican Study Committee introduced an even more aggressive budget that NTU actively supported because it built on those reforms and achieved balance in ten years.
The longer it takes to get spending under control, the more difficult action will become. Congress initiated a course change last year and began the turn away from danger, but so did the Titanic before its disastrous crash. The real question will be if Congress can manage the political will to reverse direction and turn around before we hit the fiscal iceberg that threatens to sink the American economy. We urge all Members of Congress to muster that will in support of the worthy goal of balancing our budget within the next decade.
Sincerely,Andrew Moylan Vice President of Government Affairs