Unbeknownst to almost everyone, because the go-along, get-along establishment shut them out and played the double-standard game (while the media either ignored or ridiculed them), there was a proposal available which would make meaningful and immediate progress towards solving our debt and deficit problems. Commissioned by Freedom Works, it was the result of “a months-long crowd-sourced effort to develop a budget proposal that balances the budget, reduces the debt and gets America’s fiscal house back in order.”
The Freedom Works “Tea Party Budget” promises to reduce projected 2012 spending by $562 billion, making it the only credible plan available with the common sense to deal with bloated spending this year. Over 10 years, the plan cuts projected spending by $9.7 trillion.
After some study and reallocation between the Tea Party Budget’s spending categories and those found in the PJ Institute’s NERI model, I estimated that the current annual value of the ten-year savings achieved in the Tea Party budget would be $800 billion, broken down and slightly rounded as follows: Military – $170 billion, Medicare – $110 billion, Medicaid – $50 billion, Social Security – $20 billion, and Other – $450 billion. Plugging those reductions into the NERI model shows that the Tea Party Budget, while still not aggressive enough, actually would make decent progress:
The Tea Party Budget also projects $5.5 trillion in reduced tax collections compared to CBO projections, arising primarily from maintaining the current federal income tax rate structure (in current flawed parlance, this is usually referred to as making the “Bush tax cuts,” which really represent the tax system under which we’ve been living for the past eight years, permanent). On this score, the Tea Party budget is far too pessimistic. Past experience would indicate that most if not all of the projected reductions in collections wouldn’t really occur. Under the current rate structure, if Social Security tax rates go back to their original level, a genuinely recovering and ultimately prospering economy would generate far more in tax collections than the Tea Party Budget projects. The Bush economy generated over $2.6 trillion in gross collections in fiscal 2008 — over $400 billion more than during fiscal 2010. A robust post-Obama recovery could and should get us to $3 trillion in annual collections much more quickly than Freedom Works suggests. Then the biggest “problem” would be making sure that Washington’s revenue gusher doesn’t cause the spending spigots to come back on.
Unfortunately, as events this month have also confirmed, we’re mired in the muck of a political class with almost no will to address the certain train wreck which awaits if nothing is done. A German reporter’s assessment of Washington’s legislative inertia at a White House press conference a few days before Thanksgiving pretty much said it all: “[I]t’s not really a time where the U.S. is in a position to give advice to Europe.” No kidding. Come to think of it, most in the Beltway establishment have been dupers — most definitely not super — for way too many years.