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Republicans want to reduce the deficit and have proposed a number of areas for spending cuts.
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An analysis by the Committee on a Responsible Budget found that balancing the budget would require some massive cuts.
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That is, if taxes are increased, defense spending, Social Security, and Medicare are off the table.
Right now, all eyes are on what Congress wants to spend — or decide to spend money on.
Republicans want to reduce the deficit, and that’s something Democrats seem willing to do as well. Treasury Secretary Janet Yellen said the upcoming White House budget would have “significant deficit reduction over the next decade,” according to Reuters, and Democrats are willing to discuss spending cuts with Republicans regardless of the debt ceiling.
But if the government wants to get serious about its spending, it will have to make some pretty big cuts, according to the Committee for a Responsible Federal Budget (CRFB). According to a CRFB analysis, all government spending would need to be cut by 27% to balance budgets over the next decade — and, if tax increases, defense spending, Social Security and Medicare are not included, 78% of spending would must be cut.
That “effectively means you’re eliminating almost all of government except for the military and programs specifically for middle-class seniors,” Mark Goldwein, senior policy director at CRFB, told Insider. “It’s just not realistic.”
As the New York Times notes in its preview of the CRFB analysis, closing the gap between now and 2033 would require $16 trillion in spending cuts — the same amount as all of Social Security or all of Medicare plus every anti-poverty program.
“The thing is, the government has basically three giant programs, and they’re the U.S. military, Social Security and Medicare,” Goldwein said. As Nobel Prize-winning economist Paul Krugman once wrote, the US government is “best thought of as a giant insurance company with an army.”
With the military, Social Security and Medicare off the table for cuts, that means other programs will have to be in the cuts to balance the books. That means you’ll have to say goodbye to things like visiting national parks and accessing food assistance programs, as the New York Times reports.
“The idea that we’re just going to eliminate all parts of government other than Social Security, Medicare and defense — that’s just not realistic or desirable,” Goldwein said.
Spending cuts are the name of the game in Congress right now. House Republicans have proposed a number of areas where they would support spending cuts in a potential debt ceiling deal to keep the U.S. able to pay its bills. Instead of agreeing to an outright increase in the debt ceiling, they are using the opportunity to negotiate with Democrats to achieve their own policy priorities.
For example, Republicans on the House Budget Committee said last month they agreed to cut spending on environmental programs and federal student debt relief plans, and some GOP lawmakers have reportedly spoken with former President Donald Trump’s budget official , who has been rolling out his 104-page plan of proposed budget cuts for every federal agency.
The Republican caucus also released a seven-year plan to balance the budget last year, which included making Trump’s tax cuts permanent and ensuring Social Security’s solvency by gradually raising the retirement age. Raising the retirement age would result in a significant reduction in lifetime earnings for future retirees.
While it remains unclear exactly what Republicans see in the final deal, House Speaker Kevin McCarthy has promised that cuts to Social Security and Medicare are out of the question. Still, that hasn’t stopped some GOP lawmakers from discussing changes to the programs, such as the aforementioned raising the retirement age to 70.
Trump, who has often called on his party to preserve the two programs, criticized the idea at the Conservative Political Action Conference (CPAC) last week, saying “we are not going to go back to people who want to destroy our great welfare system provision, even some of our own party.”
Goldwyn believes measures such as capping spending on appropriations bills, reducing health care costs, restoring the solvency of basic funds and tax reforms can help.
Biden is expected to unveil his federal budget plan Thursday in Philadelphia, during which he “will make remarks about his plans to invest in America, continue to cut spending for families, protect and strengthen Social Security and Medicare, to reduce the deficit and more,” the White House said in a statement.
Meanwhile, Democrats are eyeing a Republican plan to push ahead with a deal to raise the debt ceiling before the U.S. defaults.
“The Republican Party is divided and cannot unite around a plan to raise the debt ceiling. The hard right demands spending cuts,” Senate Majority Leader Chuck Schumer wrote on Twitter. “Are they going to cut Medicaid? Pell Grants? Food for children? Speaker McCarthy: Today is March 2, where’s your plan?’
Read the original article on Business Insider