The debt ceiling is bearing down on Washington. As with most such momentous occasions, plenty of partisan potshots have been exchanged, like this whopper from the White House: that House Republicans who are demanding spending reductions in exchange for increasing the debt limit would compromise the full faith and credit of the United States government.
These Members of Congress simply want to correct the urgent problem of runaway federal spending and its partner in crime—the burgeoning debt. What the House delivered today—a temporary increase in the debt limit until April 15—can best be described as a baby step. We need a grand vision and a full national discussion about solving our spending and debt challenges. But, perhaps this is all that could be expected with a President who refuses to accept the reality that we have a spending problem, and a Senate that has not passed a budget since before Apple launched the iPad.
The debt limit is a necessary instrument that forces Congress and the President to examine fiscal policy and determine whether it is affordable and sustainable. If it is not, it provides the occasion to make necessary course corrections. No one today could argue that the federal budget is either affordable or sustainable:
- The 2012 deficit was $1.1 trillion;
- 2013 will mark the fifth consecutive year of trillion-dollar-plus deficits;
- Under Obama’s own budget projections, new debt over the next decade will approach somewhere around $8 trillion after his tax hikes; and
- Within a generation, debt held by the public is on track to reach nearly 200 percent of GDP. (continues below chart)
A course correction is sorely needed. It should not just trim around the margins. Rather, it should firmly and immediately adapt policies that put the nation on a path to balance the budget in 10 years. This means reining in spending and reforming the three major entitlement programs: Social Security, Medicare, and Medicaid, while adequately funding our national defense.
As we wrote, “Unless we act wisely, massive government spending and surging public debt will destroy the foundations of our economy and darken the American Dream for our children and grandchildren.” This requires bold and decisive action, starting today, like the actions we included in Saving the American Dream.
In a far less ambitious plan, the House majority announced today that it would pass a small, temporary increase in the debt limit to give the Senate time to produce a budget resolution—which presumably would contain true spending reforms—by April 15. They also promised, according to some reports, that this year’s House budget resolution would balance the budget in 10 years. But the details are important. If they deliver, this would be a significant improvement over last year’s Ryan budget, which did not balance until 2037. But even this will not guarantee that spending cuts and entitlement reforms will actually see the light of day.
Baby steps are fine, if the baby learns to walk. Trouble is, we need to run. The proof will be in the budget the House passes come April.
Will they truly deliver a 12-step Spenders’ Anonymous program, put down the rhetorical next drink, and feature swift and sweeping entitlement reforms and roll back discretionary spending? Will it balance the budget within a decade? And, most importantly, will the policy changes that get us on this path accompany the next debt limit increase in law? The answer to each of these must be an emphatic yes!