Both houses of Congress have now voted to suspend the debt ceiling until May 19,
buying lawmakers more time to develop a budget. The Senate would put together a
budget for the first time in three years—and the details of that budget are
crucial.
To prevent the federal debt from
growing
further out of control and harming economic growth in the long term,
Congress must balance the budget in 10 years and keep it balanced—without
raising taxes further.
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Watch Heritage President-elect Jim DeMint talking about America’s debt problem
on Fox NewsThis 5-point checklist covers the do’s and
don’ts of balancing the budget in 10 years:
1. Do not raise
taxes. Despite the President’s repeated assertions that he favors a
balanced approach to deficit reduction, the latest budget debate over the fiscal
cliff concluded by allowing
13
new or higher taxes to take effect, while it produced a net
increase in spending of
$47
billion. The tax hikes are hurting the economy and American workers by
dampening investment and job creation. Yet our debt challenge remains. Only
significant reductions in spending will effectively curb debt and
deficits.
2. Reform entitlement programs. Congress must
make much-needed
reforms
to entitlement programs to provide an affordable safety net. Congress should
first repeal Obamacare or at least stop the subsidies and Medicaid expansion
that begin in 2014. Social Security and Medicare should become true safety net
programs and focus assistance on seniors in need. The eligibility age for both
programs should match and reflect increases in longevity.
Social
Security’s cost-of-living adjustment should be based on a more accurate
measure of inflation.
3. Reduce discretionary spending.
Congress should immediately stop all spending for programs that benefit
only a few and have even the appearance of cronyism, like subsidies for public
broadcasting, agriculture, green energy, and ethanol. The federal government
should focus on a limited number of
appropriate
national duties. States and local governments are better able to meet the
needs of local populations in areas such as transportation, education, job
training, economic development, and
environmental
conservation.
4. Do not use budget gimmicks.
Congress must put the federal budget on a firm course to balance in 10
years and keep it balanced, without employing budget gimmicks. Congress should
abstain from
abusing
disasters, like Hurricane Sandy, to push through excess spending. Neither
should Congress enact laws that count on spending outside the 10-year budget
window, as is the case with Obamacare’s coverage expansion
provisions.
5. Do not sacrifice the nation’s security.
Allowing myopic cuts to reduce
military
capabilities today risks incurring higher rebuilding costs tomorrow.
Congress should responsibly fund defense at adequate levels.
The debate
about the debt ceiling is the perfect opportunity to talk about America’s real
budget priorities. Growing federal spending has put the nation on a track to
fiscal collision, and a significant course correction is
necessary.
Average historical tax revenues are 18.5 percent of gross
domestic product (GDP). We can’t keep spending more than we take in. Spending
must be reduced to this level over the 10-year budget window to balance the
budget. The Heritage plan,
Saving
the American Dream, shows how Congress can prudently balance the budget
in 10 years, without burdening Americans with higher taxes or compromising the
nation’s national security.
