First the baseline - the national debt is currently bumping up against the nation’s ‘Debt Ceiling’ limit of $31.4 trillion. But, contrary to Democrat demagoguery, there is NO possibility of default on the existing debt - none. The U.S. Treasury must pay about $40 billion per month in interest on the debt, while it takes in $386 billion in regular tax receipts, thereby covering its debt obligation by a multiple of 9x. Cries of impending default are simply mendacious DC polemics by whoever makes them. If there's to be a default, it's Treasury Secretary Janet Yellen's choice.
The problem is the out-of-control government spending, passed in midnight 3,000-page Bills. Currently the Congressional Budget Office projects the 2023 annual budget deficit to be $1.4 trillion. Each year the budget deficit gets bonded and added to the national debt, meaning the national debt will climb to about $32.8 trillion after the close of this fiscal year.
Like many problems in Washington, the solution to the debt crisis is actually simple, but most assuredly, not easy. So, before we’re demagogued as an “entitlement attacker” or “putting the full faith and credit of the U.S. at risk,” here’s a suggestion for the few in DC who still breathe oxygen and can face reality.
The “entitlements,” which include Social Security, Medicare and Medicaid, are some 54% of the budget. If they are to be addressed and reformed, that should take place in open congressional hearings, not in a closed-door committee concoction. Therefore, since that process would take considerable time, these three programs should be placed in a wrapper and yes, debt should be issued as necessary to keep just these three solvent, while they are publicly addressed.
The remaining 46% of the budget could be brought into balance by matching the current, 2023 tax receipts, with a prior-year budget outlay which matches today’s receipts. The prior year allocation would then function as the blueprint for balancing every item in the budget, other than the entitlement programs. A quick squint at the Fed Budgets indicates that the actual 2019 outlays would be completely covered by the 2023 tax receipts. All discretionary programs would take a haircut, but who could honestly say there wasn’t enough federal tax money sloshing around in 2019 to run the full portfolio of discretionary federal programs. The Senate and House ‘Cardinals of Appropriation’ would simply have to make the cost-benefit analyses which private businesses undertake every month across the nation, and thereby conform today’s spending to the already massive appropriations of 2019. In no way under the sun would that be a crisis for the federal government (though it might be for some very favored interests).
This approach would still leave us to address the debt necessary to fund the entitlements, but it would force the stiffening of the appropriators’ spines to address the earmarking and pet programs perennially bleeding the taxpayers on the discretionary side of the budget.
And just in case you’re thinking we gave Jim Himes a pass this week - we couldn't. He has yet again asserted himself to the detriment of his constituents. The House Republican leadership served up a Bill which took a very small step in the direction of restraint: H.R. 2811: Limit, Save, Grow Act of 2023. The Bill would raise the debt ceiling for a year, but includes holding some program funding level, which Democrats predictably mis-label and attack as “cuts.” The Bill passed the House 217 vs. 215, with Jim Himes, true to form, voting Nay. He offered his usual word-salad ramble in response, but the fact is – he couldn’t even take a small step toward fiscal sanity on behalf of the hard-working taxpayers of his District. Instead, he chose to ladle another $13,000 of debt upon every household in CT-4.
Jim Himes is NO Moderate.