Three Solutions to the Federal Budget Deal

  • Washington D.C.

The recent federal budget compromise, although representing some minor breaks in the Washington gridlock, is a bad deal for the country. It is bad because it doesn’t address the real budget problems. It is bad because it does not establish needed budget priorities.

As widely reported in the media, the budget plan fails to extend unemployment benefits, protect food stamps, and other programs that benefit middle and lower income people. On the plus side it does limit the irrational, automatic sequester cuts. And it doesn’t immediately cut Social Security or Medicare. But what is really bad about the budget deal is that it does not address the CAUSES of our budget problems.

Three answers to our budget problems:

First – Reign in unnecessary, wasteful, and corrupt military spending. This is the cause of most of our national debt. At 57% of the discretionary budget, the Department of Defense is the single biggest discretionary spending item.  But this does not include all national defense related spending. This does not include the cost of the recent wars (estimated $4-6 trillion), or national security related spending in the Department of Energy (nuclear weapons), the CIA (a secret budget), Homeland Security (customs and border patrol), the Coast Guard, NASA, the Veterans Administration (which cleans up the human damage after the wars) or the war related interest on the national debt.  A more accurate total cost of national security is about $1.3 trillion for 3013—two and a half times the basic Department of Defense budget.  We cannot balance the budget by ignoring the national security state elephant in the room.

Second – Address revenues. This involves reducing the unnecessary “corporate welfare,” which actually exceeds spending on social services. The many tax “incentives,” tax loopholes, and business subsidies are expensive but do not create jobs or economic growth.  They simply reduce revenue to the federal government and exacerbate the budget problems.

Third – rationally prioritize our spending. Budgets are about making choices and allocating limited resources. They are about deciding what is most important in spending our money and what we can get by without. This is why the sequester was so harmful. Cutting everything equally means you cut important NEEDS the same as less important WANTS. These choices can be difficult but it should be possible to agree that food, housing, healthcare, and education for our children is more important than Mars landings, military bands, or bridges to nowhere.

We will never solve our budget problems until we learn these lessons.