With $19 trillion in national debt, is balancing the budget without raising taxes even possible anymore? You bet it is.
By reducing spending on the key drivers of the deficit and debt, and reprioritizing annual spending so it goes toward more important uses, The Heritage Foundation’s Blueprint for Balance turns deficits into surpluses. And it does this while cutting taxes by more than $1 trillion over the 10-year budget window.
Our blueprint shows Congress how to secure programs such as Medicare and Social Security for younger and future generations. It eliminates corporate welfare programs and cuts down on wasteful spending. And it devolves areas that are outside the proper scope of the federal government to the private, state or local level.
And yet the blueprint isn’t just about cutting the budget. It reprioritizes certain spending toward higher-value uses. Importantly, Heritage would make provisions to fully fund national defense capabilities to protect Americans and the nation’s allies from security threats. It would also expand on a successful school-choice program in the nation’s capital, so more low-income students may attend safer, higher-performing private schools of their choice.
At a time when Congress seems to have shifted into high gear toward more spending, Heritage’s blueprint shows that there is a better way to budget. While Congress is debating funding the annual discretionary budget at the president’s level, the blueprint shows how to cut spending for fiscal year 2017 by almost $100 billion.
Programs on the chopping block would include the Department of Agriculture’s Catfish Inspection Program, which even the Government Accountability Office singled out as duplicative of Food and Drug Administration regulations. This duplication needlessly wastes taxpayers millions of dollars.
Five corporate welfare programs embedded in the Commerce Department should be eliminated. These programs either prop up inefficient businesses at the expense of taxpayers or unfairly subsidize private companies. Just take the International Trade Administration, which recently reached a deal with the Kuwaiti government on behalf of General Electric. This was the government negotiating a $2.6 billion deal for a $300 billion company!
Cutting spending that’s wasteful and that reduces opportunity for all by providing favoritism to some is important. Doing so reduces economic distortions and improves fairness.
Yet cutting only those programs is not enough to balance the budget.
More than half of the growth in projected spending over the next decade is due to programs that are near and dear to millions of Americans: Medicare, Medicaid and Social Security. These programs are allowed to grow on auto-pilot and get the first call on available resources. Before Congress begins debating the annual budget that funds defense and domestic agencies and programs, the entitlement programs have already been allocated their share of the budget.
Tens of trillions in unfunded obligations are threatening younger generations with massive tax increases and undue burdens of debt. To control this spending while ensuring adequate provision for those most vulnerable in society, Heritage’s blueprint would make targeted structural reforms.
Congress should repeal Obamacare and cap the federal allotment for Medicaid. States should have greater flexibility in designing benefits and administering the program. Congress should further allow able-bodied enrollees to use Medicaid dollars to purchase private health coverage of their own choosing.
Medicare should be modernized by transitioning to a premium-support system and making other key reforms to meet demographic, fiscal and structural challenges. Similarly, common-sense reforms to Social Security are necessary to ensure seniors are protected from poverty in retirement while accounting for increased life expectancy and reducing the growth in benefits which threatens to burden younger workers with higher taxes and undue debt burdens.
Who on Capitol Hill will step up to advocate for a truly conservative budget? Big spenders need not apply.
Romina Boccia is the Grover M. Hermann Research Fellow in Federal Budgetary Affairs and Deputy Director in the Roe Institute for Economic Policy Studies at The Heritage Foundation.