The Quiet Earthquake in Spending
November 23, 2003
Higher taxes are coming. The tax relief that President Bush and Congress have approved over the last two years is only temporary. Unless, of course, shortsighted lawmakers cut back runaway federal spending, which in the long run determines exactly how much tax revenue must be collected.
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Some insist that economic growth alone will solve the deficit problem. It's true that the recent tax rate cuts will aid economic growth and tax revenues by providing new incentives to work, save and invest. But the CBO's dire projections already assume revenue growth of 13 percent in 2005, 10 percent in 2006, and approximately 6 percent thereafter. The economy won't grow the budget into balance any time soon.
These prolonged deficits will make it difficult if not impossible to further reduce the tax burden on American families. Increasing deficit projections led the normally tax-averse President Reagan to raise taxes in 1982. This past spring, the Senate chopped the president's $726 billion tax relief package to $330 billion because Sens. Olympia Snowe and George Voinovich expressed fear that federal revenues wouldn't keep pace with runaway spending. President Bush may now have to expend more energy protecting previous tax cuts than proposing new ones. Broad-based tax increases may remain a political "third rail," but class-warfare calls to raises taxes on the rich may find an increasingly receptive audience.
The only alternative to tax hikes is spending restraint. An obvious first step: Scrap the proposed budget-busting Medicare drug benefit and start over. Now is not the time for the largest expansion of government since the Great Society. Targeted help to poor seniors, combined with real Medicare reforms, makes more sense than creating a new $7 trillion liability that funds many seniors who don't need the benefit.
There are other ways to save money: The $90 billion corporate welfare budget can go, along with another $50 billion in waste, fraud and abuse identified by the Heritage Foundation. Create an independent commission to identify outdated and ineffective programs ripe for elimination.
We need look no farther than Western Europe, where politicians have promised to provide for all their citizens' needs in exchange for higher taxes and bigger government, to see the consequences of excessive spending and taxation. Western Europeans have incomes 40 percent below Americans and unemployment rates twice as high. They also lose 50 cents out of every dollar earned to taxes.
Instead of accelerating down that road to serfdom, lawmakers must learn how to win elections by methods other than promising federal spending. And they can do it in a positive way - emphasizing, for example, how letting families keep more or their own money would make housing, food, health insurance, retirement and their children's education more affordable.
Low taxes and a dynamic free market helped make America an economic superpower. Why let excessive government spending by shortsighted and undisciplined lawmakers threaten that status?
heritage.org
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The embarrassing GOP
Cal Thomas (archive)
November 26, 2003
The just concluded (thankfully) Congress is an embarrassment to itself and everyone who favors smaller government. This Republican Congress, in addition to increasing spending on entitlements and expanding big government - like the Democrats they once criticized - also dished out $95 billion in tax breaks and pork-barrel projects.
The Heritage Foundation's Brian M. Riedl says mandatory government spending will reach 11.1 percent of GDP this year, a record high, and non-defense discretionary spending in 2003 will amount to 3.9 percent of GDP for the first time since 1985. Riedl also predicts taxes will inevitably have to be raised to pay for it all. What politician wants to be demagogued about cutting "essential services"?
The Republican "oath" says, "I believe that the proper function of government is to do for the people those things that have to be done but cannot be done, or cannot be done as well, by individuals, and that the most effective government is government closest to the people." Would some lawyer please sue the Republican National Committee for violating truth-in-labeling laws?
Smaller government and less spending? That's a joke. Eleven years ago, Newt Gingrich, who would soon become Speaker of the House, blasted Democrats for seeing "no contradiction between adding a billion and a half dollars in pork-barrel (spending) for the politicians in their big-city machines and voting for a balanced budget amendment." Now that Republicans are doing precisely what Democrats did when they were in the majority, what shall we call these overspending Republicans? Hypocrites? Liars?
The Wall Street Journal editorialized (Nov. 24): "The Republican Congress is turning into something of an embarrassment, if not a crackup." Who is going to pay for all of this stuff? Who will pay for the new prescription drug benefit that will not even be means-tested? There are no cost controls in this bill. Without them, congressional spending will be out of control.
The Bush administration was supposed to hold the line on spending as a justification for the tax cuts. The president has criticized Washington for spending too much money, yet without a peep he signs legislation that increases the budget of the Department of Education and many other agencies. And the justification for more federal education spending is that we are going to make sure the kids are held accountable. Accountability takes money?
The federal government will now spend $21,000 per household, up from $16,000 in 1999, according to the Heritage Foundation's Riedl. How much of that $21,000 could you spend that would produce better results for yourself and family?
We are moving rapidly, under Republican "leadership," past the nanny state and the welfare state to what might be called the state as family. The government will be our keeper (we shall not want). Though we walk through the valley of the shadow of poverty, the federal government will be there to comfort us. Anyone who complains about this will be called "rich" and (by definition) insensitive and uncaring about his fellow man.
The time when the Republican Party stood for something worth standing for is over. The "G" in GOP might as well stand for government. Smaller, less intrusive government with less spending and lower taxes is the stuff of history books and fond memories for a party that once had a purpose. But Republicans, having tasted power, are now drunk with it. Like the Democrats before them who became inebriated with the wine of success, Republicans now seem interested only in preserving their elective offices.
Truly there is less than a dime's worth of difference between the two parties. If only term limits would catch on! But the very people who are the problem would have to vote for the idea and there isn't any money in it.
Defense and anti-terrorism spending aside, there is no excuse for much of the rest of it. It is a pathetic betrayal of the faith many had put in the Republican Party to reduce the size and role of government in our lives.
Is it time for another revolution yet? Who's got the tea? |
