Federal budget picture is ugly

Republicans and Democrats in Washington, D.C., must form a united front in the effort to limit federal spending and bring budget deficits under control.

President Obama and House Republicans last week drew sharp lines of distinction between their respective positions on the budget. About the only positive thing that can be said about them is that there is plenty of room for compromise.

Unfortunately, neither side is indicating much flexibility in their budget postures. President Obama, obviously trying out themes for next year's campaign, accused the GOP of laying the budget groundwork for turning the U.S. into a Third World country by advocating heartless budget cuts. Meanwhile, Republicans are threatening to oppose increasing the current national debt limit unless they get some concessions on spending, a move that would cause the U.S. to default on its debt and have a calamitous effect on the country and the economy.

Heated debates between Congress and the president are nothing new to Washington, D.C. But what is new in this debate is the undeniable seriousness of the problem posed by excessive federal spending.

The U.S. is quickly approaching a national debt in excess of $14 trillion dollars, and it is running unthinkable annual budget deficits well in excess of $1 trillion a year. Previous deficits pale in comparison to what the country now faces, and they represent a new red menace to our national security the menace of rid ink.

Continuing to run deficits at current levels is unaffordable. When the economy bounces back from what has been a devastating recession, part of the problem will be addressed with increased revenue to the federal government.

But addressing only part of the problem is insufficient. The U.S. has to get spending under control.

President Obama last year appointed a special commission to review the problem and make recommendations and the committee responded with a series of recommendations that included $3 in spending cuts for every $1 in tax increases. Obama's commission also proposed a tax reform package that would flatten tax rates while at the same time eliminating many tax deductions.

Unfortunately, Obama ignored the commission's recommendations and followed it with a budget speech that seemed to ignore the problem altogether.

Last week, he joined the debate, proposing specific tax increases with non-specific spending cuts while lambasting House Budget Committee Chairman Paul Ryan's more dramatic and specific proposals to reduce spending by $6 trillion over 10 years and ultimately balance the budget.

It's understandable and not surprising Obama would defend traditional social welfare programs from budget cuts. But what seems to be lost in the translation is that the U.S. is funding much of this spending with borrowed money.

Obama's position is that the U.S. cannot spend less when it ought to be that we cannot continue to spend borrowed money.

Like Illinois, the federal government is broke. Unlike Illinois, the federal government can borrow and borrow and borrow and not worry about balancing its budget. But while it can and it has done that for a long time, the federal government cannot do it forever.

The day of reckoning is drawing near. So while it's fine for Democrats and Republicans to posture and preen as part of their budget negotiations, it will be a disaster if they forget that the country's future depends on gaining control of out-of-control spending that threatens the country's future.

Categories (2):Editorials, Opinions

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jthartke wrote on April 18, 2011 at 12:04 pm

Let's look at the (inaccurate) metaphor conservatives like to use of the government tightening its belt as the family sitting around the table trying to figure out what to do about their own budget.

Sure dad can give up his favorite scotch, while mom gives up her massages. The kids start taking their lunch to school -- yada yada. But there comes a point where cutting family spending eventually runs against the wall of the mortgage, the power bill, tuition, and groceries. There comes a point where cutting any more hurts the family.

That's when dad has to decide to pick up some overtime, and mom decides to start doing her friends' hair again for cash. The kids run a garage sale or pick up a paper route. Maybe the whole family mows lawns...

You see, there has to come a point when we look at upping the family revenue. That's what conservatives and millionaires don't want to do -- work a little overtime to get this country back on track. If we can't ask people to put a little more in the till during times of war and recession, when can we?

steprswife wrote on April 20, 2011 at 12:04 pm

You've got to be kidding jtharke ! Up the family revenue? What happens when everybody is working just as hard as they can and there's still not enough to go around???? So I work a little bit MORE overtime to pay someone else's share of the pie because they're NOT working at all?????? WHAT'S WRONG WITH THIS PICTURE!!!!

jthartke wrote on April 20, 2011 at 3:04 pm

There are plenty of wealthy folks who have cash to spare. And I posit that every dime of it was not earned with the pure sweat of their brow or the magic of their entrepreneurial genius. You can't tell me that a guy making a million dollars every year can't squeeze five figures out of their income, especially considering the fact that their taxes are the lowest they have been in 50 years.

I also highly doubt that you are in the tax bracket I'm talking about.

And I keep hearing about all these people that just don't want to work -- or don't work at all. Even if you consider the unemployment rate as a measure of those people, that is only 8% of the population that are "not working at all". I would also imagine that a significant portion of those people would very much like to be working.

You do understand that one aircraft carrier costs more than the entire welfare budget for a year?

Just who are these people supposedly milking the system? Big banks that take a government bailout, hand out huge bonuses to people who wrecked the company, then foreclose on thousands of homes unjustly? Military contractors who make huge profits off our wars? Oil companies that make billions of dollars per quarter, yet still somehow qualify for a tax rebate? GE, who hires more overseas than in the states, yet still gets $3.8 billion back in cash?

These are the people who need to work some overtime. Us out here in five figure land are just the kids in this metaphor.

jthartke wrote on April 20, 2011 at 3:04 pm

There are plenty of wealthy folks who have cash to spare. And I posit that every dime of it was not earned with the pure sweat of their brow or the magic of their entrepreneurial genius. You can't tell me that a guy making a million dollars every year can't squeeze five figures out of their income, especially considering the fact that their taxes are the lowest they have been in 50 years.

I also highly doubt that you are in the tax bracket I'm talking about.

And I keep hearing about all these people that just don't want to work -- or don't work at all. Even if you consider the unemployment rate as a measure of those people, that is only 8% of the population that are "not working at all". I would also imagine that a significant portion of those people would very much like to be working.

You do understand that one aircraft carrier costs more than the entire welfare budget for a year?

Just who are these people supposedly milking the system? Big banks that take a government bailout, hand out huge bonuses to people who wrecked the company, then foreclose on thousands of homes unjustly? Military contractors who make huge profits off our wars? Oil companies that make billions of dollars per quarter, yet still somehow qualify for a tax rebate? GE, who hires more overseas than in the states, yet still gets $3.8 billion back in cash?

These are the people who need to work some overtime. Us out here in five figure land are just the kids in this metaphor.

bremax wrote on April 21, 2011 at 4:04 pm

The top 1% pays 40% of all income taxes. So, give me a break with your fairness argument. Remember too that the top 1% is also the most mobile segment of the population. You may not want it to be true, but if you try to set confiscatory tax rates, they will simply leave and you get nothing from them.

Aditionally, the wealthy people that I know all work significantly more than the hours that your local union boss deems " full time ", with 60-80 hour weeks being common among business owners and high level executives.

jthartke wrote on April 22, 2011 at 3:04 pm

Neither of your statements are true. You refer strictly to the federal income tax. Considering that the top 1% has 50% of the wealth and 38% of income, they ought to be paying that in income tax. What they don't pay into are state income taxes (because they can hop from state to state to avoid it) and payroll tax. Their share, as a portion of income, of sales taxes is minuscule.

Anecdotal statements of what is "full time" doesn't prove squat. You can't count time on the golf course and at cocktail parties as "full time" compared to the guy cleaning his toilet or the nurse who saves his life. I also have plenty of anecdotal evidence of bosses who make dozens of times what their employees do, and only show up at the office to collect a check.

Plus they have it, and it is needed. Sorry folks times are tough, and most people work just as hard as a billionaire -- they just actually pay taxes on their incomes.

luntfords wrote on April 22, 2011 at 5:04 pm

Your statements amaze me. No, I am not a billioinaire but possibly would fall in the millionaire group. We live in one state, and pay more in taxes than you can imagine!

serf wrote on April 23, 2011 at 7:04 am

I have quite an active imagination. What never ceases to amaze me is that in this country we'll cut teacher's salaries who make $40,000 a year, but asking millionaires and billionaires to pay the same amount of taxes that they did in the 1990's (when the economy was great) is somehow bordering on treason. Quit being greedy.

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