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Wanted: Spending Cuts

Democrats and Republicans alike claim their party is fiscally responsible and the other is a budget-buster. It's time each party put the money where its mouth is.

Before 1994, Democrats portrayed themselves as the party of full employment. During periods of economic downturn, they argued, it was the federal government's job to pump money into the economy by creating public-sector jobs, regardless of the deficit. Republicans lambasted this "tax and spend" approach. They promised to cut spending and balance the budget.

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After wresting control of Congress in 1994 for the first time in 40 years, Republicans did balance the budget - with help from a robust economy. Then they turned their gaze to another cherished goal - lower taxes. They cut taxes even as federal spending grew and revenues plummeted - partly as a consequence of the 9/11 attacks. Despite new deficits, President Bush sold his last round of cuts as an economic-stimulus package, arguing that it was necessary to pump money into the economy by cutting taxes. (Sound familiar?) The GOP became the "cut taxes and spend" party.

Democrats rushed to proclaim themselves the new deficit hawks. They denounced the president's tax cuts as budget-busting policy and advanced smaller tax-cut plans targeted more at people with lower incomes than in the GOP's proposal.

(Not all Democrats got the fiscal- responsibility message. Some Democratic presidential candidates now argue for rolling back all or part of the Bush tax cuts - not to trim the deficit, but to spend the money on expensive new healthcare-insurance programs.)

Neither side expresses much interest in spending cuts, which would trim the deficit and make more room for needed programs, such as Medicare and Social Security reform. Instead, the two parties are now arguing over a $400 billion Medicare prescription-drug benefit that has no revenue to pay for itself. The money will come directly from taxpayers' pockets - or more precisely, from the children and grandchildren of today's taxpayers.

Yet there is ample room for sensible spending cuts. A good place to start would be a list that Congress's nonpartisan General Accounting Office recently presented to the House Budget Committee. It details areas in which the government could save through better management, and by cutting duplicative programs, restructuring others, and eliminating waste. Just a few examples:

• In 2002, Medicare contractors improperly paid $12.3 billion in claims.

• By the end of 2002, the IRS had an inventory of $112 billion in unpaid taxes "with some collection potential."

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• The Defense Department estimates that it spends $3 billion to $4 billion a year on unneeded facilities.

Congress ought to plug some of these money leaks. Then both parties could claim fiscal responsibility.


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