(first published in North State Journal 12/6/17)
Here’s a novel idea for every elected US Senator or US Congressional Representative who said they voted against the tax reform bill, in part or in whole, because it would 'explode the national debt' by $1 trillion over 10 years:
‘Pass a Bill to Reduce Federal Spending by $1 Trillion Over 10 Years!’
This includes every Democrat in the Senate and House plus Senator Bob Corker of Tennessee and 13 House Republicans.
Just because a tax bill is scored as 'losing' revenue over 10 years by CBO, that doesn't mean Congress can't take steps to 'pay for' that loss of revenue by cutting spending elsewhere.
The only people who can't vote to cut spending anywhere in the federal budget are those who love government spending to begin with. Some, except perhaps Senator Corker and the 13 House Republicans, have never voted to cut one dime from any level of spending unless is it in defense or another line item they don't like.
Federal spending is expected to be $4.1 trillion in FY 2018. There are literally 4.1 trillion ways to cut federal spending annually. The number of ways to get to $1 trillion in deficit-neutrality is literally endless.
Here are 4 substantive ways Congress can get to $1 trillion in deficit-neutrality:
- Raise the eligibility age for Medicare in graduated steps until it gets to 67. Saves $148 billion over 10 years.
- Raise the eligibility age for Social Security in two-month increments to age 70. Saves $120 billion over 10 years.
- 'Bend’ the benefits formula for Social Security down to the point where everyone gets the minimum poverty protection benefits and then phase-down the formula to where no benefits are paid above a certain amount- Saves over $36 billion over 10 years.
- Reduce employer tax exclusion for medical insurance premiums by roughly 15%. Reduces deficit by approximately $700 billion over the next decade.
There's $1 trillion in offsets needed to make this tax bill completely deficit-neutral.
We will wait with bated breath to see if those who voted 'nay' because of their stated concern about the deficit will adopt such measures to make this tax bill not add any more to the roughly $31 trillion in national debt we are expected to have in 2027 without this tax package or any other changes.
Our guess is they probably won't.
If anyone is dead-serious about reducing the amount of debt we are loading up on our children and grandchildren, they will support the 3 entitlement proposals above. Flattening the cost curve in Medicare and SS to under 3% annual growth would almost balance the budget by 2024 without any other spending cuts or tax increases anywhere else in the budget.
CBO estimates that a combination of these entitlement reforms could result in a lowering of future federal budget costs by anywhere from 2% to 4% of annual GDP.
4% of a projected American GDP of $40 trillion in 2040 would mean annual savings of $1.6 trillion in our federal budget.
The reality staring us in the face is that we are operating a government based on policies and presumptions about health and longevity from 1935 and 1965. It is time to update our programs to reflect the realities of longer life expectations and technological advances in the 21st century, not the 20th century.
If we don’t, our children and grandchildren are going to be saddled with a dreadful amount of debt that many current elected politicians say they are concerned about but never do anything to prevent.
Perhaps they doth protest too much. If they really want to cure our long-term debt problem, they can pass these spending reform proposals. This week.