Business and Politics: Who balances the budget?
Story by Chris Graham
(Third and final installment in a series.)
Are we ever going to be able to balance the federal budget again? That’s the question that has fiscal conservatives like me picking through the fiscal proposals of John McCain and Barack Obama searching for needles in the haystack.
The bad news: Neither candidate is showing the kind of fiscal discipline that Bill Clinton did back in the 1990s, when we ended that decade with budget surpluses that have since turned into massive federal deficits with the tax-cutting and dollar-spending fervor of the Bush Republicans.
At least Obama has been forthright about where he’s taking things, said Jonah Gelbach, an economist at the University of Arizona and a blogger at Econ4Obama.blogspot.com, “saying that it’s more important to him to cut taxes for the middle class and invest in infrastructure and new energy technology. Obama would reduce the deficit by comparison to current-policy projections, but he wouldn’t eliminate it.” McCain has taken a different tack that Gelbach says can be summed up in one word – “dishonesty.” “Invariably he or his advisers claim that he will make up the orgy of tax cuts for the seven-house crowd by cutting spending, especially earmarks. However, he’s on record as supporting a substantial share of the programs funded with earmarks, like aid for Israel; his real beef there is with the process of funding, not the fact of it, but changing the language used to spend money doesn’t change the fact that it’s spent,” Gelbach said.
Doing some quick math, then, we’re talking about a federal budget currently in deficit in the area of $400 billion annually. McCain is going to add $300 billion in tax cuts to the bottom line, and even if he does what he says he’s going to do with respect to earmarks, we’re talking about at best a savings of $30 billion. It doesn’t take an advanced degree to develop an idea as to where things are going to be headed if McCain gets his hands on the Treasury.
“He needs to show that he is willing to pay for anything that he’s proposing, which he has not been willing to do. And the American people need to call him on it. It’s more of the same. It’s not a change, and the idea that it’s a change is absolutely false, because he’s refusing to say how in any way his policies differ from those of the president who has driven our economy into the ground,” Missouri Democratic Sen. Claire McCaskill said on a conference call with reporters last week.
Obama gets us closer to a balanced budget by raising taxes on the superwealthy and by pledging to bring a relatively quick end to the war in Iraq, which is currently costing U.S. taxpayers $120 billion annually. That he doesn’t do more to reduce the deficit is a byproduct of his plan for additional tax cuts for working- and middle-class individuals and families that have actually come under fire by deficit hawks who emphasize the need to get federal revenues in line with federal spending.
The Tax Policy Center has estimated the impact on the national debt from the Obama fiscal plan at $3.3 trillion over the next decade, an obviously staggering figure. More staggering is the estimate it tags on the McCain fiscal plan: $4.5 trillion over the next decade.
To answer our question at the head of this article, then, I think we have to say, Not anytime soon, anyway.