Working toward a budget to reduce debt
Posted: Thursday, May 24, 2012 9:49 am
By: Sen. Lamar Alexander
Former Federal Reserve Chairman Alan Greenspan recently said the worst mistake President Obama made was not embracing his own (Simpson-Bowles) fiscal commission’s recommendations to reduce our debt by $4 trillion over the next 10 years.
Today, our national debt is more than $15.6 trillion, which is nearly $1.9 trillion higher than it was when the fiscal commission released its recommendations in 2010 and $6.4 trillion higher than when President Obama was sworn in.
In January 2013, the first thing the next president will have to do is ask Congress to increase the debt ceiling.
The president has proposed a budget that raises taxes by $1.9 trillion over the next 10 years and still spends more than it takes in every year, instead of endorsing the fiscal commission’s recommendations – or any other plan to address our nation’s spending crisis.
According to the Congressional Budget Office, under the president’s budget, interest on our debt will triple over the next 10 years, and by 2022 we’ll be spending more in interest than we spend on national defense. The fundamental problem is that Washington does not know how to balance its checkbook.
This is irresponsible and instead of playing politics we should be working together on a plan to address the debt, which is the most urgent problem facing our country and, according to the former Chairman of the Joint Chiefs of Staff Admiral Mike Mullen, the biggest threat to our national security.
The Simpson-Bowles, Domenici-Rivlin, and Gang of Six proposals all offer bipartisan blueprints for how to address it. Each of these proposals would reform the tax code and restructure entitlement spending – the main source of our dangerous federal debt – so that seniors can count on Medicare and Social Security and taxpayers can afford them.
Mandatory entitlement spending, which is 58 percent of the federal budget, is growing at nearly three times inflation and bankrupting our country.
Discretionary spending, which funds our national defense, our highways, our national parks and national laboratories, is only 36 percent of the federal budget and is growing at the rate of inflation. Focusing our budget cutting on discretionary spending is just a way for Congress – to use the president’s words – to kick the can down the road. The real work is in reducing the growth of mandatory spending.
Although the Senate majority is not debating its own budget resolution, going more than 1,100 days without offering a budget, we are debating several proposals. I support the House-passed budget because it is a serious proposal to cut out-of-control spending and help solve our spending crisis. I also support the proposal offered by Senator Pat Toomey (R-Pa.)–even though it sets non-defense discretionary spending at 2006 levels that I believe are too low—because it reforms mandatory entitlement spending, closes tax loopholes, lowers tax rates, and saves Medicare for future generations.
Senator Toomey and I have discussed alternatives to improve and simplify the Medicaid spending formulas to save states money and minimize hassle from Washington, and I am encouraged by these discussions.
Last August I supported the Budget Control Act because it was an opportunity to take an important step in the right direction.
The House-passed budget and the budget proposed by Senator Toomey are opportunities to take the next step, and I look forward to working with them to adopt a responsible budget that grows the economy and reduces our debt.