Cut, Cap, and Balance
If the President and Congress are serious about reigning in our national debt and putting America back on a sound economic footing for the future, it comes down to three little words: cut, cap, and balance.
It really is that simple.
First, we need to cut federal spending significantly and immediately. Republicans are offering a plan that would reduce the deficit by half next year, lowering the budget by $111 billion. This is a steep drop in federal spending, and it is necessary. More importantly, the cut happens now, not over ten years. As all of us know all too well, promises to cut future spending never work. During the debate over raising the debt ceiling, negotiators have agreed on roughly $2 trillion in cuts over ten years in order to raise the debt ceiling an equal amount. But the increase in the debt ceiling only gets us to just past the 2012 election before we would need yet another increase. Just two years before another debt limit increase for ten years of “promised” cuts does not seem like a fair trade. We need spending cuts now, not in ten years.
Second, we need to cap federal spending so it matches incoming federal revenues. Looking back at our economic history, the government has taken in roughly 18% of annual U.S. GDP in taxes. This 18% has remained constant through high tax rates and low tax rates. It is easy to see that the government should not spend more than 18% of GDP. Yet today, we are spending at a rate of roughly 24% of GDP. If nothing is done, in just ten years, 95% of our taxes will be used to pay the interest on our debt and fund unsustainable entitlement programs, leaving only 5% of annual tax revenue for national defense and all other functions of the government. Capping spending in the only way to ensure we meet our obligations with existing revenue, not new taxes and not more spending.
Finally, we need to balance the budget by passing a Balanced Budget Amendment to the United States Constitution. The Balanced Budget Amendment is the key piece of the cut, cap, and balance plan because it forces Congress and the Administration to balance the budget. There would be no more gimmicks, no more “emergency spending” that isn’t paid for, and no more threats of huge taxes increases to pay for wasteful programs.
The State of Florida and 48 other states abide by some type of balanced budget requirement, and the federal government should too. Republicans have offered a Balanced Budget Amendment that caps spending at 18% and requires a 2/3 vote in Congress to raise new taxes. Put simply, a constitutional amendment legally forces Congress to only spend what it takes in. And it’s permanent. The debt ceiling has been increased 69 times since 1940. Enough is enough – let’s stop the spending now.
The “sky-is-falling” rhetoric from the Administration and across Washington regarding the debt ceiling is deafening, but it can’t drown out the fact that the solution to solving the debt crisis is simple: cut, cap, and balance.
Ronald Reagan said it best in 1982 when he remarked, “Only a constitutional amendment will do the job. We’ve tried the carrot, and it failed. With the stick of a Balanced Budget Amendment, we can stop government squandering, overtaxing ways, and save our economy.” The time is now to finally pass a Balanced Budget Amendment to the Constitution and force the federal government to put its fiscal house in order.
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