.....Advertisement.....
.....Advertisement.....

Debt and Deficit Act II

-A A +A

Column by Jim Flynn

President Obama joined the battle over our national debt and deficit by throwing his re-election hat into the ring. Whether campaigning, governing, or negotiating, Mr. Obama is most comfortable and effective in his cheerleader mode.

Discussion of our debt and deficit problems was triggered by the 2012 budget introduced by Rep. Paul Ryan (R-Wis.), Chairman of the House Budget Committee. It’s an ambitious and politically risky plan to reduce federal spending by $6.2 billion next year.

Referred to gushingly by its authors as “The Path to Prosperity,” the Ryan plan centers on reduction of government spending, repeal of last year’s health care law, more state responsibility for Medicaid, lower corporation taxes, and reforming the tax code.

The president’s response to the Ryan plan focuses on preserving social programs, implementing his national health plan, raising taxes on the wealthy, and abolishing tax loopholes.

How did we get into this debt and deficit dilemma? When President Bush entered office in 2001, the national debt was $5.9 trillion. When he left in 2009 it was $10.6 trillion. He engaged the nation in two wars, while cutting taxes and letting Congress spend recklessly, without even one veto. He ignored the admonition of James Madison, author of our Constitution: “Each generation should bear the burdens of its own wars, instead of passing them on to future generations.”

During President Obama’s short time in office the national debt has risen to $14.3 trillion and is about to rise another $1.6 trillion. Mr. Obama enlarged the already bloated federal bureaucracy and encouraged Congress to pass national health care legislation and spend freely on other social programs in the midst of a major recession.

At our current level of spending, by 2020 interest on the national debt alone will exceed a trillion dollars a year, almost certain to collapse our currency and cause a major disruption of government services. Both parties are acting irresponsibly.

Despite what they say, the primary concerns of the president and most members of Congress are protecting their turf, maintenance of their voter base, harvesting campaign contributions, and reading the pulse of uncommitted voters. If discussions between the White House and Congress are anchored to concerns about the 2012 election, we may be in for another fiasco of all-night discussions and short-term debt and deficit extensions.

There is one aspect of the debt and deficit problem on which the White House, Congress, and the president’s Fiscal Responsibility Commission agree. The Internal Revenue Code needs a total overhaul, including elimination of hundreds of tax breaks and loopholes that do not serve the interests of the nation.

The Tax Reform Act of 1986 eliminated a train load of deductions and tax shelters, despite objections from pressure groups. Since then the good ole boys in Congress have made 15,000 changes to the tax code.

The president’s Fiscal Responsibility Commission said it could trim a trillion dollars a year off the deficit just by eliminating hundreds of tax breaks. However, discussion of eliminating tax breaks will bring out lobbyists and vested interest groups like worms in a summer rainstorm.

If the commission is right, and both parties seem to agree it is, then signed legislation to overhaul the tax code could be a major step toward solving the debt and deficit problems before they damage the future of the nation. Courage will be required.