Memo to the 112th Congress: Want to fix what’s wrong? It’s really simple and really difficult: Spend less, balance the budget, grow more.
The true cost of government to the American people is the total amount of spending. And the only way to reduce total government spending is to do less of it, starting soon.
Politicians who wish to continue high levels of government spending work hard to direct America’s focus on the deficit. The deficit is a real enough problem but simply the measure of our failure today and a mask on an accumulation of failures from decades past that threaten to extend into decades future.
For the same reason the Titanic wasn’t sunk by the tip of the iceberg that the lookout saw, the damage done to our economic present and future isn’t measured just by the deficit but by the total amount of spending. It is important that taxpayers and their Congressmen refuse to fall for the kind of misdirection where the magician calls for you to “forget spending ­— just look at this deficit!”
Post-war political history is full of this voodoo. The spending interests in Washington, D.C., convinced President Ronald Reagan in 1982 that they would cut $3 of spending for every $1 of tax increase that Reagan would permit. The tax hikes were real, painful and permanent; the spending restraint never materialized. Then only eight years later, the same spending interests concocted the infamous Andrews Air Force Base budget summit that negotiated a supposed deficit reduction deal with President George H.W. Bush. It was to cut spending by $2 for every dollar of tax increase. Again, the tax hikes were real and spending increased more rapidly after the deal than before.
Now Lucy is back with her football, hoping we will play the role of the hapless Charlie Brown a third time. At least two commissions or committees have offered to trade tax hikes for spending restraint. But the lesson of recent history is that tax increases are what politicians do when they can’t bring themselves to stop spending.
The last two years have witnessed a spending spree unlike any that didn’t arise from a world war. Democrats who ran the House of Representatives achieved a $700 billion bailout, an $800 billion stimulus package and a $1.3 trillion budget deficit. On top of this, they have passed a financial regulatory bill with regulations affecting access to credit that our small businesses and banks cannot even begin to understand and a tax-and-spend-heavy health care bill with at least a $1 trillion tab.
There are ways to repair the inherent problems, and the STRONG Budget Act will finally do what the spenders, taxers and dealers have not and cannot. If enacted, it will reduce discretionary spending across the board by 2 percent every year until there is no longer a deficit.
The path to keep the budget balanced once we achieve it goes only through amending the Constitution. There are two pending proposals. One requires Congress to vote by no less than three-fifths majorities in both the House and Senate to let total annual outlays of the United States exceed one-fifth of economic output. The other also requires three-fifths majorities in both the House and Senate to let spending exceed revenue. And it would take a three-fifths vote of each chamber to increase the debt limit, instead of the simple majority vote now to increase the statutory ceiling on the debt.
Finally, we also need to do something about that part of the equation that everybody so carefully ignores: economic growth. It doesn’t happen by divine intervention, although prayer may be all we have left if the potential for spending and taxing isn’t suppressed.
The deadly pursuit of ever-higher spending, tax rates and debt is driven, of course, by the persistent need to fuel an expanding government with the money that is required to run it. The recession has dealt a hammer blow to that system by producing less revenue for the government even as the big-government Democrats sought to deliver more services, usually for free. The long-term effect of that pact is hellish, but the 112th Congress needn’t agree to do more of the same, with the same result.
Here’s what’s in store if we don’t. The Congressional Budget Office predicts that today’s recession will actually reduce the gross domestic product in 2018 from $22.2 trillion down to $20.2 trillion, slicing federal government revenues by $458 billion. But if we can find ways to grow the U.S. economy just two-tenths of a percent in the coming five years and just a tenth of a percent in the three years after that, GDP would rebound and so would federal revenues. No tax hikes necessary, thank you.
The fact is, America needs growth even more desperately than Washington. Since World War II ended, the average recovery from recession has lasted five quarters or less. This one, if you even count that a recovery is under way, seems to be on track for a 10-quarter run.
We believe that achieving growth demands a full-on assault by Congress. Here’s a sampler of ideas that deserve serious consideration from policymakers in the 112th Congress and throughout the administration: a freeze on spending; the rapid, systematic reversal of the job-killing rules spewing out of the Obama administration’s Environmental Protection Agency; the circumscribing of trial lawyers’ ability to litigate against anything that moves; and a carefully crafted round of financial reform that replaces the administration’s current policy of reactionary discouragement for all lending with one that encourages quality lending. Those are only for starters, but they add up to a very strong start.
Want to put things right in America again? Get control of government spending, balance the federal budget and restart the economic growth.
Grover Norquist is president of Americans for Tax Reform, and Rep. Joe Barton (R-Texas) is ranking member of the Energy and Commerce Committee.