Cut taxes and cut spending
Outgoing-Speaker Nancy Pelosi (D-CA) took her anger out on Republicans on the deal that has been worked out with the White House, claiming that the tax cuts aren’t “paid for.” This is often a complaint among the Left about the tax cuts. They want Americans sacrifice, even saying it’s the patriotic thing to do. But how dare anyone suggest that Congress cut spending.
[A]s Veronique de Rugy and I laid out yesterday, it would be quite easy to balance the budget in 2020 if the government would start early with small, systematic cuts designed to get government outlays about equal to the historic average of government revenue. Since 1950, the feds have brought in average revenue equal to about 18 percent of GDP. In its more-realistic “alternative scenario” budget projections, the Congressional Budget Office estimates that by 2020, revenues will equal about 19 percent of GDP, near the historic average. The CBO’s alternative scenario is based on keeping the Bush tax rates through 2020 and doing various types of AMT patches that reduce the number of people paying the AMT. In other words, CBO’s revenue scenario keeps things the way they’ve been for the past decade or so.
In order to balance the budget by 2020, all the feds need to do is cut 3.6 percent of projected budgets in each of the next 10 years. The table below lays out what this means. The short version is trimming about $129 billion from budgets that average $4.1 trillion. Here, we’ve broken it down by major expenditure categories. CBO estimates the budget in 2016 will be $4.3 trillion; to put us on a path toward balance in 2020, that would call for $128.7 trillion billion in cuts. Spreading those evenly would mean $20.7 billion in defense, $12.9 billion in Medicaid, etc.
Here is the table Gillespie is referring to (click to enlarge):
Republicans are going to have to cut spending. No one disputes that. And it’s going to be up to the tea party movement, fiscal conservatives and libertarians to hold them accountable. As Matt Kibbe has said, all of us are going to have to show up and keep their feet to the fire, essentially treating every day as it is November 2nd.
It’s humorous to see Democrats misrepresent that position of those of us supporting the tax cuts. While they are complaining about tax cuts, they want us to ignore the fact that their message has been “spend, spend, spend,” going back in the tried and disproven Keynesian model, while sitting back and watching the budget deficit soar. They rarely acknowledge that we want spending cuts to match these reductions in tax rates.
Of course, they don’t want to have to cut revenue for their spending programs, preferring instead to engage in class warfare and often insinuating that all the money earned in this country belongs to the state. They just allow you to keep what they think you need.