How to Balance the Budget Without Raising Taxes

[Matt Collins]

How to Balance the Budget Without Raising Taxes (http://click.email.reason.org/?qs=62699628069bffbccce682ed00f0427727ec5c46cd3d7b 376ec9d01255847b52)

[/URL]Reason's Nick Gillespie and Veronique de Rugy write, "Congress hasn’t even begun real work on the 2011 budget, even though the fiscal year started in October (the government is currently being funded by short-term continuing resolutions; the next one expires on December 18). If they want to get serious about staving off the uncertainty, tax increases, and unrestrained spending that are sure recovery killers, they could put us on a path to a balanced budget right now. Are our leaders willing and able to identify and cut just $25 billion in waste and excess out of more than $700 billion in non-defense discretionary spending? Is reducing the $714 billion the Department of Defense received in 2010 by a paltry $25 billion impossible? Can Medicare and Medicaid, two programs that are infamous for waste and fraud and cost well over $720 billion in 2010, find $35 billion in efficiencies? The specific cuts should be open to negotiation, but the historical record shows that the available level of government revenue is fixed. If these sorts of small but systematic trims are impossible over the next decade, then really nothing is possible and debt, deficits, and despair are here to stay."


[URL="http://click.email.reason.org/?qs=62699628069bffbc7278947e2c3b0ad9606afc9ffe07b5 f024c3c68bee4bd108"]Jacob Sullum: Balancing the Federal Budget Won't Require Radical Change
(http://click.email.reason.org/?qs=62699628069bffbccce682ed00f0427727ec5c46cd3d7b 376ec9d01255847b52)Hey Progressives, This Is the Thanks Obama Gets?
(http://click.email.reason.org/?qs=62699628069bffbc6078c76717bf9ca0d822d7f86175e0 423fa981288f254886)Friday Funnies - Obama's Tax Deal (http://click.email.reason.org/?qs=62699628069bffbcfb1ae89c303ed95fc9572f9626f501 c00193235245c557ca)

[Zippyjuan]

It is impossible to balance the budget in one year without any tax increases. Even over many years, it is very difficult (and will require fiscal dicipline over many years which is not likely to happen whoever is in power politically). Basic numbers from the 2010 budget on Wiki (easy numbers to look at):
http://en.wikipedia.org/wiki/2010_United_States_federal_budget

You are starting with a budget shortfall of about $1.3 trillion. Then you look at what you can cut (you can't cut any of the interest on the debt and you won't make any cuts for this year for Social Security or Medicaid payout though you can put in place longer term changes like reducing the growth rate of future benefits or raising retirement age or elgibility benefits but those only help in the future- not now- these steps will have to be made as well).

So start cutting. Take $1.3 trillion out of $1.38 trillion in "discressionary" spending to balance your budget without raising taxes. I dare you. I think the best we can hope for right now is a token freeze or some symbolic but not meaningful cuts. The uproar generated by the Deficit Commission report is proof of that. Nobody really wants to cut anything. But ask the voters and you get the same wishy- washy responce. Cut spending. Just don't cut the money I get or want spent.


Mandatory spending: $2.184 trillion (+15.6%)

$677.95 billion (+4.9%) – Social Security
$571 billion (−15.2%) – Other mandatory programs
$453 billion (+6.6%) – Medicare
$290 billion (+12.0%) – Medicaid
$164 billion (+18.0%) – Interest on National Debt
$11 billion (+275%) – Potential disaster costs
$0 billion (−100%) – Troubled Asset Relief Program (TARP)
$0 billion (−100%) – Financial stabilization efforts


Discretionary spending: $1.368 trillion (+13.1%)

$663.7 billion (+12.7%) – Department of Defense (including Overseas Contingency Operations)
$78.7 billion (−1.7%) – Department of Health and Human Services
$72.5 billion (+2.8%) – Department of Transportation
$52.5 billion (+10.3%) – Department of Veterans Affairs
$51.7 billion (+40.9%) – Department of State and Other International Programs
$47.5 billion (+18.5%) – Department of Housing and Urban Development
$46.7 billion (+12.8%) – Department of Education
$42.7 billion (+1.2%) – Department of Homeland Security
$26.3 billion (−0.4%) – Department of Energy
$26.0 billion (+8.8%) – Department of Agriculture
$23.9 billion (−6.3%) – Department of Justice
$18.7 billion (+5.1%) – National Aeronautics and Space Administration
$13.8 billion (+48.4%) – Department of Commerce
$13.3 billion (+4.7%) – Department of Labor
$13.3 billion (+4.7%) – Department of the Treasury
$12.0 billion (+6.2%) – Department of the Interior
$10.5 billion (+34.6%) – Environmental Protection Agency
$9.7 billion (+10.2%) – Social Security Administration
$7.0 billion (+1.4%) – National Science Foundation
$5.1 billion (−3.8%) – Corps of Engineers
$5.0 billion (+100%) – National Infrastructure Bank
$1.1 billion (+22.2%) – Corporation for National and Community Service
$0.7 billion (0.0%) – Small Business Administration
$0.6 billion (−14.3%) – General Services Administration
$19.8 billion (+3.7%) – Other Agencies
$105 billion – Other


And if you do decide to go the other way to try to get a balanced budget- by only raising taxes and focus only on income taxes, you could double the amounts currently paid in income taxes and still be short about a quarter trillion dollars. Scary numbers- but the longer you put of moving in that direction, the more impossible it becomes. At least people are talking about it- even if it is just lip service right now.


Estimated receipts for fiscal year 2010 are $2.381 trillion, an estimated decrease of 11% from 2009.

$1.061 trillion – Individual income taxes
$940 billion – Social Security and other payroll tax
$222 billion – Corporation income taxes
$77 billion – Excise taxes
$23 billion – Customs duties
$20 billion – Estate and gift taxes
$22 billion – Deposits of earnings
$16 billion – Other