As the old saying goes, be careful what you pray for: The gods just may grant you your wish. Republicans fervently hoped for a return to power, and the political furies granted them their biggest win in six decades. Now the GOP must make good on its promises to cut spending, reduce deficits and stabilize the national debt.
Here’s the big question that no one asked during the campaign season: How much fiscal consolidation in the form of spending cuts and/or tax increases must Congress enact to put the nation back on a financially sustainable course?
In its Pledge to America, the GOP House leadership vowed to roll back government spending “to pre-stimulus, pre-bailout levels,” thus saving $100 billion in the first year alone and “putting us on a path to begin paying down the debt.”
Putting us on a path to paying down the debt? Whoever composed that line must have stayed up way too late and taken way too much No-Doz. It’s blather. Rolling back spending $100 billion a year won’t accomplish anything.
In the 10-year forecast submitted with the midyear review of the fiscal 2011 budget, President Obama already assumes a $75 billion reduction in discretionary spending between 2011 and 2012, thanks to resumed economic growth, reduced unemployment and reduced entitlement payouts to the poor.
House Republicans might respond that the pledge also promises to put a “hard cap” on domestic discretionary spending to limit federal spending on an annual basis. Yet Mr. Obama, in his State of the Union address, already vowed to impose a three-year freeze on discretionary domestic spending. In his 10-year forecast, he sees such spending topping out at $533 billion in 2011 (the current fiscal year) declining to $459 billion in 2014, and rising slowly to $529 billion over the next six years.
In other words, House Republicans swore in their pledge to accomplish little more than Mr. Obama already has committed to deliver. (Read more.)