Committee for a Responsible Federal Budget

My View: Carol Cox Wait

Nov 15, 2010 | Budgets & Projections

Hip, Hip, Hooray! The Chairmen of the President’s Deficit Reduction Commission finally have shed some light on the kinds of choices that will be needed to head off economic catastrophe. You may argue with some of their recommendations, but nobody who understands the Federal Budget will argue with a straight face that they have the basic components of any serious deficit/debt reduction package wrong.

Reduce the future cost of Social Security and Medicare? Horrors! Left unchecked those two programs, plus Medicare and interest eventually would crowd out everything else in the budget, unless of course we raised taxes much more than the Chairmen propose to do. Let nobody mislead you: reducing the size and scope of the Federal government presupposes reductions in the future growth of these two behemoths.

Raise motor fuels taxes 15¢ a gallon? Ronald Reagan said that taxes should be clearly visible to consumers and that they should hurt. A hidden tax on producers is an inefficient mechanism to reduce carbon emissions and it is likely to be far less effective than a tax that is clearly apparent to the end users. So you raise taxes and reduce pressure on the environment in one fell swoop. My only question would be: why stop at 15¢? Why not continue to raise the tax an additional 15¢ each year until motor fuels cost in the U.S. approximate levels in other developed countries?

Taking advantage of this economic and budget crisis to spur tax reform is a very good idea. Lower rates coupled with fewer deductions and exceptions will make the system more transparent. Reducing or eliminating so-called “tax credits” could do away with a device that makes conservatives more comfortable with Federal spending (so long as it is disguised as a tax cut).

My only quarrel with the Chairmen’s recommendations is that they do not go far enough. I would get the Federal government out of education, housing, transportation (except for interstates, air traffic control, etc.) and community development. I see no sense in sending dollars to DC so that Congress can divvy up the money based on who sits on which Committees and Federal bureaucrats can take something off the top, just to send the money back to us.

In short, we all should be very grateful to the Commission Chairmen. They have told the truth about the problems facing the nation—about the seriousness of the danger facing us and the difficulty of the choices needed to get the economy and the budget back on track.

Our job as citizens should be to hold our elected leaders accountable. We should insist that they treat these recommendations seriously—that they offer equally specific solutions to replace any that they find wholly unpalatable—that they get with the program and begin the serious business of deficit reduction first thing in the new Congress.

Washington DC has been on a binge. Cloaked in high sounding rhetoric, our political leaders have spent money in ways to make drunken sailors blush and cut taxes as a percent of GDP to the lowest level in decades.

Tell them to stop it! Now! Tell them to stop kidding themselves and their constituents and admit that righting the ship of state will require the kinds of choices the Commission Chairmen recommend. Tell our political leaders that we are grownups. If they will face problems squarely we will support them—and if not there is another election only 2 years away. So they can change their ways or we will once again change the people in DC.

Carol Cox Wait was President of the Committee for a Responsible Federal Budget until 2002. She remains on the board of the Committee and is a member of the Pew-Peterson Commission on debt reduction and budget process reform.

"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.