The reality of entitlement spending


I’ve said before that we’re going to have to cut entitlement spending. There’s no other way to deal with this country’s financial crisis. A recent article in the Weekly Standard puts that reality in brutally real perspective. Here’s an extract.

How much is entitlement spending the real source of our budgetary woes? Here’s a stat for you: In President Obama’s proposed 2012 budget, the White House Office of Management and Budget estimates (in Table S-4) that mandatory spending this year (2011) will be $2.194 trillion, while total federal receipts will be $2.174 trillion.

That’s right: Even if we were to spend every dime of federal revenue on mandatory programs (Medicare, Medicaid, Social Security, and the like), we would still have a $20 billion deficit. When you add in interest payments on the debt ($207 billion), we would have a $227 billion deficit. That’s even if we didn’t spend anything at all on discretionary programs, the category of spending that includes homeland security, interstate highways, national parks, and, of course, national defense.

This highlights three key things: One, meaningful entitlement reform is our only route to fiscal solvency. Two, we absolutely cannot afford another entitlement, in the form of Obamacare. Three, we are nowhere near balancing our budget anytime soon, and attempts to mandate that result – such as through a Balanced Budget Amendment – would require either immediate entitlement cuts for current beneficiaries (which no one is proposing) or massive tax hikes. Rather than a Balanced Budget Amendment, therefore, we need a Limited Government Amendment, which would tackle the real problem: unlimited government spending.

There’s more at the link. Bold print is my emphasis.

The ‘Limited Government Amendment‘ of which the article speaks, reads as follows:

Section 1: The annual rate of growth in total federal spending shall not exceed the rate of inflation, plus two percentage points, and neither budgeted nor actual spending shall exceed this limit, apart from the exceptions listed below. If no budget is passed, then the most recently passed budget, excluding any exceptions granted in Section 2, shall apply. The spending limit for the first fiscal year under this amendment shall not exceed total federal spending in fiscal-year 2008, adjusted for inflation plus two percentage points for each year completed in the interim.

Section 2: Defense spending shall not be limited during a time of formally declared war, and further exceptions to the spending limits specified in Section 1 may be granted by the legislatures in three-quarters of the several states, upon the application of two-thirds of both houses of Congress, as they deem necessary; but any such exceptions shall not be included in determining spending limits for subsequent years.

Section 3: The spending limit for the first fiscal year following the cessation of hostilities in a declared war shall be the limit that was established for the fiscal year preceding the declaration of war, excluding any exceptions granted in that year, and adjusted for compounded inflation through all fiscal years completed in the interim.

Section 4: The rate of inflation used in determining spending limits shall be the rate from the most recently completed fiscal year prior to the passage of a given year’s budget, and the method of measuring inflation shall not be altered substantially from long-established norms. Spending that is not defense spending shall not be characterized as such; each exception granted by the states shall apply only to one fiscal year if not granted anew; and every citizen of the United States shall have standing to sue in federal court to enforce the language of this amendment.

Sounds like a reasonable beginning . . . except that I’d disallow the ‘rate of inflation, plus two percentage points’ increase altogether, for routine administrative costs. Limit the increase to the rate of inflation – and measure inflation accurately, rather than the deliberately ‘fudged’ figures currently used by the FedGov. If the FedGov wants to increase spending in one area, let it damn well cut expenditure in another! If that means shutting down unnecessary FedGov departments (such as Energy, Education, etc.), so much the better!

Peter

2 comments

  1. "during a time of formally declared war"

    We will never again have formally declared war, nor enemies in uniforms on set-piece battlefields.

    Needs some rethinking and wordsmithing.

    "declared national emergency"?

  2. Okay, I'll say it again:

    "Simple Solutions To The Budget Crisis:
    End two wars of occupation­­­­­­­­­­­­­­­­­­. Leave the Middle East.
    Stop fighting the Cold War. Leave Europe.
    Stop funding the military power of other nations.
    End all military contracts, and return all of those duties to the military itself.
    Close Guantanamo and return Cuba's sovereign territory.
    Stop subsidizin­­­­­­­­­­­­­­­­­­g the already highly profitable oil industry.
    Stop subsidizin­­­­­­­­­­­­­­­­­­g the highly unprofitab­­­­­­­­­­­­­­­­­­l­e corn industry.
    Stop paying a fortune to incarcerat­­­­­­­­­­­­­­­­­­e minor, non-violen­­­­­­­­­­­­­­­­­­t drug offenders.
    Establish a State Bank for each of the fifty states and have each state treasury deposit ALL state revenues, pension funds, etc 'exclusive­­ly' in their own State Bank.
    Establish a national 'buy in' program for Medicare with no age restrictions.
    Extend Medicaid to everyone below the poverty line.
    Rebuild all of America's infrastruc­­­­­ture from the ground up.
    Rebuild American industry here in America itself, by government fiat if necessary.
    …and the biggest one, return to the sensible Eisenhower era taxation rate."

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