If It Doesn't Balance, It's Not a Budget
It's officially budget season in Washington -- the period from January to April when the president, House and Senate are all legally required to produce a budget plan to establish spending priorities for the coming year and beyond. As it has for four of the past five years, the process formally commenced with President Obama failing to submit his budget blueprint by the statutory deadline.
Next in the traditional line-up is the yearly budget outlook from the nonpartisan Congressional Budget Office (CBO), which released its report right on time. As usual, the CBO report contains all the information necessary to balance the budget, for those willing to take an honest look. Perhaps most significantly, CBO's 2013 budget forecast rules out tax increases as a viable path to debt reduction. Even after factoring in a 25 percent revenue increase, the national debt will remain at 90 percent of GDP for the next 10 years. The CBO report estimates this drag on the economy will cost 11 million jobs over the same period.
And that's the best case scenario, which assumes the economy will grow and the patience of our longsuffering creditors will continue to keep interest rates low. Yet both of these optimistic projections are based on the assumption that the government will manage to reduce the debt enough to avoid another credit downgrade.
Fortunately, CBO data indicate exactly which segment of the budget is responsible for most of our debt, and it isn't military spending. Thanks to $949 billion in new Obamacare spending and an explosion in projected expenditures for Medicare and Medicaid, total government spending for health care programs will double over the next 10 years to $13.9 trillion. As the Baby Boomer generation retires in increasing numbers, Medicare spending will increase from $592 billion this year to $1.1 trillion over the next decade, while Medicaid spending will grow from $265 billion to $572 billion. Together with Social Security, these entitlement programs will constitute 64 percent of the entire budget.
It's obvious that reforming these programs is essential to reaching a balanced budget, yet the first step is getting President Obama to acknowledge that balancing the budget is even a priority. While House Republicans passed a budget last year that would balance in the mid-2030s, the budget submitted by the president in 2012 never achieved balance -- not by 2040, 2050 or even 2090. As every American family knows, setting a budget that doesn't balance undermines the whole exercise. That's why the House recently passed the "Require a PLAN Act," specifying that if the president again fails to submit a balanced budget this year, he will be required to submit a supplemental budget plan by April 1 detailing which year balance can be achieved and which policies are necessary to get there.
House Republicans have pledged to improve on last year's budget and produce a plan this year to balance the budget in 10 years. Although Senate Democrats will show progress just by submitting a budget for the first time in four years, their plan should also balance by a specified date. Each party will certainly have different ideas about the best route to a balanced budget, but we should at least agree that balance is the only acceptable destination. The American people deserve an honest and transparent debate about the nation's economic future, and that is only possible if all parties put forward meaningful plans.