Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA), chairs of budget committees in both chambers of Congress, reached an agreement last night that will partially roll back the bipartisan spending cuts mandated by the bipartisan Budget Control Act of 2011.
Jonathan Bydlak, president of the Coalition to Reduce Spending, warns that the looming budget promise is “disastrous” for fiscal conservatives because reversal of some of these reasonable spending cuts and does nothing to address entitlement programs — the real drivers of federal budget deficits.
“This deal would be a disastrous lose-lose compromise that kicks the can down the road while refusing to address the core of our national fiscal crisis,” wrote Bydlak in an email blast before the agreement was formally announced.
“At this point, sources have reported that the deal will likely replace less than half of the sequester cuts for 2014 and 2015, and not touch major entitlements and the tax code,” he continued. “[W]e’re hearing rumors that the disastrous deal could…include spending around $980 billion to $1 trillion, along with raising revenues through increased federal employee benefits contributions and air ticket taxes, among other things.”
Bydlak, like other fiscal conservatives, is concerned about the growth of spending after four consecutive years of $1+ trillion budget deficits and a national debt that now exceeds $17.2 trillion. The sequester is an important, though small aspect to deficit reduction, but dealing with major entitlement programs — Medicare, Medicaid, and Social Security — represent the biggest threat to the United States’ fiscal health.
In September, the Congressional Budget Office (CBO) released its annual long-term budget outlook. This report painted an ominous outlook, finding that spending as a percentage of GDP to rise to 26.2%, based on current law, and federal revenues will come in around 19.5%, which is higher than the average of the last few decades.
The budget deficit as a percentage of the economy would be 6.4% and the public’s share of the national debt will hit 100%, the point at which the United States could experience a sovereign debt crisis similar to that experienced in the Eurozone.
Spending as a percentage of GDP will come in just under 21% this year, while revenues will hit around 17%. Spending on major entitlement programs is, currently, 9.6%.
The CBO blames those major entitlements, which will account for 14.2% of GDP by 2038, for the rise in spending. Once you add in the interest on the national debt, mandatory spending in 2038 would be just over 19% of gross domestic product.
Talk and promises of entitlement reform isn’t enough for taxpayers, wrote Bydlak, and he urged fiscal conservatives in Congress to “rethink such a betrayal of their principles” before they cast a vote in favor of this misguided budget deal. He also urged concerned taxpayers to contact their representatives and ask them to vote against it.