July 16, 2009

UNSUSTAINABLE

Guest opinion submitted by Idaho Senator Mike Crapo

"Under current law, the federal budget is on an unsustainable path"
-Congressional Budget Office, Long-Term Budget Outlook, June 2009

The federal budget is growing larger and increasingly hard to comprehend. We constantly hear differing numbers cited in different analyses and scenarios coming from many different sources. But few of us have the time to study this information and to place it into context. Most Americans are responsible citizens who work hard to support themselves and their families, pursue their goals, and pay their taxes. Recent unprecedented spending increases and the rapidly increasing size of our deficit and debt make the budget all the more incomprehensible and even more outrageous.

Responsible taxpayers should be able to expect from the federal government a reciprocal amount of responsibility with their hard-earned money. Instead, over the past year, the federal government has spent an enormous and unprecedented amount, with plans to spend, and tax, even more. 

Since last fall, the government has spent $700 billion on the Toxic Asset Recovery Program (TARP) and $787 billion for the so-called stimulus package, officially called the American Recovery and Reinvestment Act of 2009. These have helped push spending in this fiscal year, thus far, to $2.67 trillion. 

All of this recent spending has brought us to where we are now, for the first time ever, facing a $1 trillion budget deficit before the fiscal year is even over. The deficit for the full fiscal year last year was $455 billion. Deficits are the amount by which outlays exceed revenue and debt is the accumulation of each year's deficit. According to the Congressional Budget Office (CBO) Long-Term Budget Outlook, the estimated budget deficits from fiscal years 2009 and 2010 will be so large that the debt will shoot to 60 percent of GDP for FY 2010, up from 41 percent in FY 2008. 

And now, as if unprecedented spending increases were not enough, Congress is considering several more massive spending bills for a government takeover of health care and a cap and trade system of energy regulation. These would add trillions of dollars of additional taxes and spending. The CBO report states that Social Security, Medicaid, and Medicare account for nearly all of the projected growth in spending. And yet, according to the CBO director, the health care reform proposals in Congress do not reduce costs as promised; instead, "the legislation significantly expands the federal responsibility for health care costs."

The ever-increasing numbers from the federal budget are so large and so far above what anyone is familiar with in a family or business budget, or even past federal budgets, that it is hard to imagine how much of our money the government is really spending. If the government does not reduce spending, the tax increases required to cover it all will be huge and will further erode growth and prosperity. CBO's forecast is grim: "if spending grew as projected and taxes were raised in tandem, tax rates would have to reach levels never seen in the United States. High tax rates would slow the growth of the economy, making the spending burden harder to bear." 

The amount of debt that the federal government has already amassed, combined with the massive new spending being proposed, is simply unsustainable. It is unacceptable that this burden lies not only on the current generation but on future generations as well. Please visit my website at http://crapo.senate.gov for more information on my record and policies on the budget.

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