The Tea Party Is Right about Cutting Spending: It’s the Math, Stupid
It seems that every day on the internet I come across another comment from an angry person on how Republicans, Tea Party Republicans in particular, want to cut some important program: Social Security, Medicare, and even the military’s health insurance plan called “Tri-Care,” which replaced the in-service medical treatment that military members and their families used to enjoy.
The commentators rage on the callousness of the evil “right wing” and their desire to slash and burn and create artificial crises like the debt ceiling, which is coming up again.
If you’ve read my column more than once you have probably heard me mention a particular science called math. In truth, I was never too good at math, so I can’t preach Calculus or trig. Luckily, the problems with US taxation and spending (and Puerto Rico’s for that matter) really do come down to sixth grade mathematics:
Consider how much do you take in; deduct your spending; and account for how much you have promised to spend over the next few decades. In the real world those promises are called “unfunded liabilities.” They exist in law and constituent will, but no one has come up with a way to maintain and pay for them yet — at least in the case of the federal government.
The GOP has its own propaganda machine and cannot always be trusted, and the Tea Party has earned a reputation as a mostly white club. I’ve been to a few Tea Party meetings, and it’s kind of sad; they also lean far too heavily towards social conservatism. However, the Tea Party, which stands for Taxed Enough Already, has one major point: if we don’t cut spending soon and by a lot, we are all in big trouble.
The idea that the world’s wealthiest nation is actually the world’s most indebted nation seems to fall on deaf ears when it comes to my collectivist or “liberal” friends. The consistent words I hear are cut defense, with some calling it the Offense Department instead of the Defense Department.
Okay, granted, we’ve gone a little overboard of late with wars and rumors of wars. However, it turns out the Defense Department has already been cut. To cut it further, one only needs to end combat operations in Afghanistan. That would save a bunch more.
By the numbers: Defense Department spending for 2013 represented about 17.7 percent (US$672.9 billion) of the total US budget — comfortably more than any other country in total dollars spent. By contrast, Medicare and Medicaid, and all that is done under the Health and Human Services Department, accounts for 24.7 percent ($940 billion), and Social Security represents 23.2 percent ($882.7 billion). That’s right, both Social Security and the two health care programs are larger than defense spending. They are also the largest amount spent by any country in the world in their respective realms, as best as I’ve been able to assess.
What’s even more interesting about these numbers is that while the majority of defense spending is considered discretionary — it can be changed up or down relatively easily — the bulk of Social Security and health care spending is mandated by law. In other words, the source of nearly all the unfunded liabilities (in excess of $200+ trillion, according to credible estimates) the United States is currently obliged to pay is Social Security, Medicare, and Medicaid.
I really wish every news website in United States and Puerto Rico would embed the National Debt Clock on their front pages just to remind everyone of what is really going on.
Just five months into this fiscal year, and the US Deficit is already at $650 billion. That puts it on track for a $1.3 trillion deficit by September 30, the year’s end. So if you were to cut defense by 100 percent, you would still have a deficit of $650 billion give or take a few billion. If you were to cut Social Security by 100 percent, you would still have a budget deficit of about 400 Billion. Eliminate Health and Human Services, and you’re still only down to about $350 billion.
While I am a strong supporter of a strong and robust national defense, I know a crisis when I see one. Instead of picking on one particular agency or program, why don’t we cut every program across the board by the same percentage, so that in the end we have a balanced budget? Why not amend our current laws to limit or eliminate any mandate that remains unfunded after this year?
Drastic? Yes, but as I have explained, if we don’t bring spending under control we will inevitably lose all our benefits and programs that we so desperately defend. The US Treasury Department says that the deficit for 2013 was just $680 Billion. There are a few people, this writer included, who think that number is about as real as a three dollar bill. (For those not aware, the United States doesn’t make three dollar bills.)
Even if we assume that number is accurate, the United States would need to cut spending by 15 to 20 percent across the board to balance the budget. A more accurate assessment, from a Boston University economist and world leader in generational accounting, correcting the long-term budget gap “requires a fiscal adjustment of an immediate and permanent 37 percent reduction in spending [and] an immediate and permanent 57 percent increase in all federal taxes, or some combination of the two.”
That would hurt, but cutting federal spending would guarantee that these services and our national defense would be available for years to come. On the other hand, not cutting until the dollar becomes worthless and we face a more severe downtown, means that someday we will wake up with no Social Security, no Medicaid or Medicare, and no way to defend ourselves.
It is time to set aside our pet programs and focus on saving the country.