Is $2,500 too much to spend on something? Well, it depends on what you’re buying. For a state-of-the-art big-screen TV, maybe not. For tickets to the Super Bowl, it’s probably a bargain. For dinner at a nice restaurant? Way too much.
How about for nothing?
Within a decade, the federal government will be spending $2,500 a year for every person in America on a budget item that doesn’t serve to protect the nation against enemies, cure illness, educate children, pave highways or any of the other functions that have tangible value to the average American.
That money will go for one thing: interest on the government’s debt.
Keep that in mind as Republicans and Democrats wrangle over cuts in discretionary spending. You’d think they were going to war. They’re talking about the prospect of a shutdown of the federal government.
But they’re hardly scratching at the problem. They’re haggling over discretionary spending, but they’re almost silent on the far larger and fast-growing costs of entitlements for health care and retirement.
Previous and coming budget deficits have locked us into a quadrupling of interest costs in the coming years. It’s a function of decisions — shortsighted, irresponsible decisions — made in the past, along with the expectation that interest rates will rise. So there is no getting around the stark fact that, as the Washington Post reports, interest costs soon will eclipse every other item in the budget except Social Security and defense.
We’re talking about $2,500 for every adult and child.
The staggering burden of paying for past and future borrowing ought to be a spur to our leaders to get serious about fiscal discipline. The sudden rage to curb domestic discretionary spending is encouraging, but it just doesn’t go very far.
We’re haggling over the relatively small amount that goes to, say, public television because Washington won’t touch the vast amounts we spend on entitlements.
We’d like to learn some more about the idea recently proposed by a bipartisan group of senators, including Illinois Democrat Dick Durbin, to force discipline on the federal budget.
Their plan would impose tight caps on various categories — and enforce them. If spending in one area exceeds the limits, it would trigger automatic, mandatory reductions in that area to offset the new expenditures. Included would be not only discretionary programs but Medicare, Medicaid and other entitlements, with the exception of Social Security.
Taxes would be in the mix. As The Wall Street Journal reports, Congress would have two years to overhaul the tax code to bring in more revenue by lowering tax rates and eliminating some deductions. If Congress failed to meet its deadline, the new rules would set in motion “an across-the-board tightening of tax deductions to meet the higher target.”
This may sound gimmicky and unnecessary. It will raise all sorts of suspicion — does it put more burden on spending cuts or higher taxes?
It wouldn’t even be needed if the White House and Congress would do what has to be done. But they haven’t. If our leaders don’t have the will to make painful choices, we had better have a backup plan in place.
So let’s start talking about this proposal, which would attempt to trigger some discipline in a short period of time.
Congress has found neither the will nor a substitute for it. The price of that failure? Soon, each one of us will be paying $2,500 a year for … nothing.
