Coastal Voices: Debt is nation’s largest threat

By Daniel Smith March 05, 2012 08:33 pm

The Congressional Budget Office (CBO) has projected that President Obama’s latest budget proposal would increase national debt to 78% of the nation’s gross domestic product (GDP) by the year 2020. In terms of how that affects each of us, in eight years, 78 cents of every dollar you earn, before taxes, will be owed to someone else because the government has already spent it.

This runaway debt includes an increase in income taxes for families earning over $250,000 a year, and an increase of the capital gains tax from 15% to 45%. Again, this debt includes an increase in taxes on the “rich.”

The President’s proposed budget reduces defense spending from the 40-year average of 5.2 percent of GDP to 3.6 percent. This level of reduction has not been seen since Jimmy Carter took office and entitlement spending first surpassed defense spending. The CBO’s figures take this reduction in defense into consideration when projecting the increase in debt.

Opponents argue that these figures are inaccurate and are based on short-term deficit models. It does not figure in a recovering economy that may, or may not, materialize in the future, or expected increases in long-term growth. It is simply based upon a flat line of the current trend in spending versus revenue.

But here lies the rub. Not since 2009, when the president and a Democratic-controlled Congress first took office, has there been a budget passed. This last budget has been the baseline for federal spending since that time. Since 2009, the government has continued to operate on what are known as “Continuing Resolutions.” These are simply temporary spending bills designed to continue the government’s operations.

Federal spending is determined each year by what is known as “baseline budgeting.” First established in 1976, the concept of baseline budgeting is to take the previous year’s expenditures and adjust them for inflation and use that figure for the next year’s budget starting point. This, in effect, means that all government agencies automatically get a raise in their budget based on inflation unless the current budget addresses the expenditure directly.

Since there has been no budget since 2009, there has been no adjustment to federal spending except for raises based on inflation and specified adjustments made during the continuing resolutions. This is significant because Republicans have been accused of obstructing the President’s attempt to get the deficit under control and spur the economy. The Tea Party was accused of holding the Congress hostage last summer during the debate around raising the debt ceiling.

The facts demonstrate that this is far from the truth. Since 2009, the House of Representatives has sent a budget to the Senate each year. Harry Reid, the Senate majority leader, has refused to bring these budgets to the Senate for a vote, or even bother providing a Senate budget, despite a legal obligation to do so.

In 2011, the President surrendered to pressure and submitted his own budget to the Senate where it died. Harry Reid refused to bring it to the floor for a vote. Senator Mitch McConnell, the Senate minority leader, forced the issue and had the President’s budget voted on, where it failed by a vote of 97-0.

In a Democratic-controlled Senate, the President could not get a single vote of support. The President and his supporters excused this rejection of his budget by saying that it was not the final version of his plan.

He later amended his proposed budget in a series of speeches but did not submit a written revision until 2012. This is the current budget he has proposed. Again, Harry Reid is refusing to bring it to the Senate floor for a vote and Mitch McConnell is trying to force him to do so. It is clear that Senator Reid is the person obstructing the budget process.

I have written senators Feinstein and Boxer about this matter. Senator Feinstein took the time to give me a response, although I was not satisfied, while Senator Boxer simply referred me to a website that lamented the need for free birth control for all women.

 The simple truth is that Reid and the Democratic Party want to continue entitlement spending at current levels in hopes that some miracle will occur that reduces the deficit without forcing them to take back the giveaways they have already promised.

The 2009 budget paid off the political promises they made, and utilizing the baseline budgeting model, coupled with funding through continued resolutions rather than a viable budget process, allows them to put off making the hard decisions.

The debt and current levels of spending is the single largest threat to our country. Not the price of tuition, birth control, or the threat of a nuclear Iran. The coming election is about whether we continue to allow our elected officials continue to act irresponsibly and place their interests above ours.

Daniel Smith is a Fort Dick resident.