The world appears to be in a state of utter disarray right about now. From the democratic revolutions roiling the Middle East to legislative battles here in the state, it’s hard to concentrate on the more mundane matters of homework and midterms. I’ll willingly admit to spending too much time protesting at the Capitol instead of preparing for classes. With all of the tense excitement here in Madison, it’s easy to lose sight of other legislative battles being waged across the country. But to turn from the intense world of state politics for one moment, the federal budget process is quickly turning into a pitched battle waged in the halls of Congress.
President Obama released his 2012 budget on February 14. In his Budget Message, President Obama laid out the main tenets of the budget, and defended the fiscal choices he is advocating. The budget is ambitious, calling for tax reform, spending freezes, reformation of the Benefit Guaranty Corporation and Federal Housing Administration, and investments in education, innovation and infrastructure. The goal of budget is to put the country back on a sustainable fiscal track, which is really a rather daunting task given Americans’ (and our government’s) propensity to spend beyond their means.
Immediately following the release of the budget, Republicans began lambasting the bill for going far enough or cutting deep enough to satisfy the fiscal needs of the country and the will of the American people. Republicans control the House of Representatives, but the Senate remains in the hands of Democrats, meaning that any budget is stalled in Congress. The result has been an incredibly polarized debate, one in which both sides bear culpability for not reaching a compromise.
Speaker of the House John Boehner, appearing on 60 Minutes in December of last year said he “rejected the word compromise” and is now backing up that sentiment with actions. If a budget is not passed by March 4, all non-essential federal agencies will shut down. That means veterans couldn’t receive benefits, people couldn’t apply for Social Security, museums and national parks would close and federal employees would be forced out of their places of work. It happened in 1995, and it cost the government 750 billion dollars. That’s not exactly what we need when we’re facing a looming deficit threat.
Obama’s budget freezes all non-discretionary funding for five years. Republicans want all non-discretionary funding frozen at pre-recession levels for 5 years. Obama wants to let those controversial Bush tax cuts for wealthy Americans to expire in 2012. Republicans, well, that debate just wrapped up in December. Obama also wants to invest in education through programs such as the American Opportunity Tax Cut and Pell grants, but Republicans vehemently oppose such increases in spending. The points of conflict run as long as the 216 page document. So far, however, both Democrats and Republicans seem more willing to push their own agendas rather than try to reach a compromise on these issues. Obstinacy will get us nowhere.
Investments in education, research and development for technology and clean energy, high-speed rail and high-speed Internet access are just that – investments. Investments, by definition, are up-front costs you willingly pay in order to reap later benefits. Yes, the United States is facing a massive budget deficit, and yes, that needs to be addressed. So too do long-term concerns about the competitiveness of the American economy. These investments will help us move forward and put the United States in a better economic position in the future.
A concomitant concern with investing in those sectors is the problem of the government actually benefiting from those investments. Americans will benefit quickly, both tangibly and normatively, but the government will benefit in a more indirect fashion through increased revenues.
To take full advantage of increased revenues, Obama has also proposed a series of tax reforms. The budget proposes to simultaneously close loopholes in the corporate tax code and reduce the corporate tax rate. It also limits the itemized deductions the wealthiest Americans could claim on their taxes.
Tax reform is a necessary component of addressing any budget debate in this country. Much of the deficit is due to underlying structural issue – that is, even if revenues were at their maximum level, there would still be a deficit – and those structural problems must be addressed. Cutting program spending alone is not the solution. Federal programs provide vital services that enrich the lives of millions – there are better solutions to our current fiscal problems than hacking away at our country’s social infrastructure.
Although the budget freezes all non-discretionary spending for 5 years, it does not do the same for military spending. It does, however, attempt to achieve zero real growth in the Department of Defense’s budget over the next 5 years, meaning no increases above inflation. This is an important measure, but in a country that spent 4.9 percent of its GDP on the military in 2009, when the world average was 2.6 percent, we can afford to back away from the military-industrial complex a tad. We can remain safe without extravagance.
With Harry Reid having proposed a 30 day stopgap measure in the Senate (which Boehner rejected), and Boehner apparently considering proposing a two week extension bill in the House, the divided government in Washington is at an impasse. Although there are significant rifts between the two parties and their fiscal agendas, they should not be afraid to work together. At the least, it will result in a better outcome for the American people.
Elise Swanson ([email protected]) is a second-year majoring in political science and English