Congressional Republicans have a huge job ahead of them if they want to balance the federal budget by 2025. Politico reports that, according to witnesses testifying before the Senate Budget Committee, it will take a deficit reduction of $5.5 trillion to balance the budget in the time that the GOP keeps promising us. That’s more than our current annual budget.
They’re compounding the problem with their ongoing refusal to raise revenue and actually address spending in real ways, says Politico. Maya MacGuineas gave the following perspective in her testimony: $5.5 trillion is eight times more than the 2012 fiscal cliff deal, and 65 times more than the Murray-Ryan agreement, which we were unable to stick to for very long.
During the hearing, Senate Republicans were apparently nostalgic for the 1990s, when the GOP controlled Congress, and achieved a budget surplus while working with a Democratic president. But the economy was very strong in the ’90s, and we had higher taxes in some areas then than we do now. The GOP wants that now, but they aren’t willing to look at all the aspects of the ’90s that made such a budget surplus possible. The witnesses tried to remind them of those facts.
The Politico article mentioned additional testimony from Mark Blyth, of the Watson Institute for International Studies at Brown University. Blyth warned them that continuing deeper cuts will put us on the same path that crippled Europe’s economic recovery from the 2008 crash. He said:
The more they tightened [their budgets], the more debt they got because the underlying GDP got smaller. And the same constant stock of debt got bigger rather than smaller.
Blyth went on to talk about revenue, and said:
You don’t really have a spending problem. You have a revenue problem.
He explained that our tax code is so heavily based on income that it’s unusually susceptible to economic cycles. European countries, by contrast, have a value-added tax, which is a more stable source of revenue. It’s not likely, however, that Republicans would put a VAT in place without corresponding eliminations of other taxes, like the entire income tax system.
Add to that the fact that there are disagreements just within the GOP about easing restrictions on defense spending, and their whole utopia of achieving a balanced budget just isn’t going to happen. Reuters says that the fight is between those who want to keep sequestration caps in place and those who don’t.
Sen. McCain, one of the Senate’s biggest defense hawks, won’t agree to any budget at all that doesn’t remove those defense spending restrictions. Others, like Sens. Jeff Sessions and Kelly Ayotte, say those caps are necessary to reach their goal of a balanced budget in 10 years.
That may be true but so is increasing revenue. Revenue increases are something in which Republicans are not interested. They have made that abundantly clear time and again. Increased revenue, they say, amounts to “tax and spend.” They think we can achieve our goals without increasing revenue. Indeed, some seem to think that we can reach our budget goals even if we cut taxes further.
In short, Republicans have a massive problem. It’s not likely that they’ll listen to experts, though, because the experts are not telling them what they want to hear.