Let's Pop the Deficit Bubble

[question everything]

Let's Pop the Deficit Bubble
By WILL MARSHALL
May 2, 2008; Page A15

(snip)

To this end, members of the Brookings-Heritage Fiscal Seminar, a nonpartisan group of 16 federal budget and policy experts, of which I am member, have hammered out an innovative plan for averting a fiscal meltdown. The basic idea is simple: Take entitlement spending off auto-pilot, and establish a fixed, overall budget for the programs. Political leaders, we say, can no longer afford to let the big entitlement programs grow automatically each year, with no deliberation by Congress, no pressure to reconcile spending and revenues, and no attempts to make trade-offs among competing public priorities.

(snip)

The best solution, of course, would be for the next Congress and president to agree on ways to reform Medicare, Medicaid and Social Security so that they continue to provide health and retirement security without running up massive deficits. But our highly polarized political class is a long way from consensus on how to modernize the nation's biggest and most popular social insurance programs. In truth, we aren't there either. So what we propose instead is essentially a stopgap – a way to prevent automatic entitlement spending from devouring the federal budget while elected officials summon the courage to act.

The plan, conceived by Gene Steuerle and Rudy Penner of the Urban Institute, works like this: Congress and the president enact explicit, long-term budgets for Medicare, Medicaid and Social Security. With this one step, entitlements would be forced to compete for budget dollars with other vital national priorities. Either the trustees or the Congressional Budget Office would review the programs at regular intervals, possibly every five years, to determine whether they stay within their budget. Failure to do so triggers automatic adjustments in benefits, premiums, provider payments, or tax revenues. Of course, Congress could override these adjustments – but it would have to take explicit action to jettison fiscal constraints. This is preferable to its current passivity in the face of automatic, formula-driven spending growth.

Amazingly, discretionary programs, including defense, now constitute only 38% of all federal spending. Our proposal would end the ever-narrowing scope of congressional decision-making, and fully restore lawmakers' constitutional power of the purse. Congress has imposed disciplinary mechanisms on itself before. The budget caps adopted in 1990, the Military Base Closing Commission, and the 1983 Social Security Commission led by Alan Greenspan are all instances in which Congress recognized the need to establish procedures that provide members political cover for unpopular decisions.

Our idea for budgeting entitlements thus reverses the "Doomsday Machine" logic of automatic entitlement spending, calling instead for the automatic tax and spending adjustments necessary to keep the programs solvent. And if the composition of our group is any guide, it could have broad, bipartisan appeal. Meeting under the auspices of the Brookings Institution and the Heritage Foundation, the gang of 16 includes prominent liberals and conservatives from eight Washington think tanks, as well as no less than three former directors of the Congressional Budget Office: Mr. Penner, Alice Rivlin and Robert Reischauer.

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Mr. Marshall is president of the Progressive Policy Institute.




URL for this article:
http://online.wsj.com/article/SB120968465450161133.html

[Demeter]

1. Why Not END Big Entitlement Programs: DoD, Halliburton, Blackwater, KBR

Iraq, Iran, Afghanistan, and anything faith-based.

[Prophet 451]

3. Faith-based isn't that big

Not to say there aren't good constitutional reasons to oppose it anyway but, in comparison to the rest, not that much money goes into it. Iraq is a BIG money drain obviously but pulling out would cost a fortune in the short-term (again, not to say it isn't a good idea and wouldn't be worth it in the long-term but better to be aware). Iran doesn't yet cost that much but that's looking to change. Can't find any recent numbers for Afghanistan.

The DoD is the big one. The US currently spends around $610 billion on the military (excluding both wars and the black ops funded from the discretionary budget). That's more than the rest of the world combined, more than it would cost to provide healthcare to every single US citizen (around $600 billion, using the NHS model). Just cutting off the obsolete weapons programs would save around $30 billion annually, reversing the out-souring of basic military functions (like catering and laundry) to outside contractors (like KBR) would save at least that much again, the out-souring was always based in politics, never practicality.

The US has been running a permanent wartime economy for decades now. Climbing down from that would free a massive amount of cash.

[Vincardog]

2. The Military and Black ops budgets are bankrupting the country giving trillions to billionaires

and this fool wants to balance the budget on the back of Social spending?

PLEASE GET A CLUE