Ronald Reagan attempted to “starve the beast” by cutting taxes and hoping a Democratic majority in the U.S. House would go along with his efforts to cut federal spending. The result, large budget deficits and a growing national debt.
Now that Democrats have large majorities in both the House and Senate and control of the White House the plan is to “gorge the beast”. In effect, increase spending to the point that taxes have to be raised. So far their plan is going swimmingly.
CNN writes up the CBO Director’s testimony:
Douglas Elmendorf, chief budget cruncher for Congress, got to play the role of bad-news bear before the president’s bipartisan fiscal commission on Wednesday.
His job: Present the Congressional Budget Office’s latest assessment of the long-term federal budget.
The gist of his testimony went something like this: The outlook is bad under current law and daunting if many current policies are extended as expected. And even that may understate the fiscal problem the country faces, because it doesn’t factor in potential effects of debt on economic growth.
Under the rosiest scenario painted by Elmendorf, the debt held by the public is on track to rise to 80% in 2035 from 62% at the end of this year. At that point, interest payments on that debt would jump to 4% of GDP, up from roughly 1% today. That’s the equivalent of a third of all federal revenue.
Based on current policies, debt held by the public would hit 185% of GDP in 2035. And interest payments on that debt would jump to nearly 9% of GDP.
Why should the average American care about the national debt anyway?
The larger the debt burden grows, the less money there will be for domestic investment. That, in turn, can suppress income growth and economic growth, which then reduces tax revenue.
Which as Vice President Biden would say it’s all about that important three letter word “Jobs”, “Jobs”, “Jobs”.
Mr. Elmenorf’s suggestion?
The only way to bring the federal budget into better balance would be to sharply reduce U.S. spending, drastically increase taxes to rates never before seen in the United States or some less dramatic combination of the two, Elmendorf said.
So, where do the Democrats plan to cut spending? Our national defense. This take on Barney Frank’s wishlist comes from the Daily Caller:
The Obama administration intends to slash the defense budget in order to pay for its riotous spending on bailouts, “stimulus bills,” their signature healthcare program, and massive pork bribes for votes from congressmen who hopefully will not survive this November’s balloting. To continue the spending spree, the White House plans to eliminate over a trillion defense dollars in the next ten years. Details of those proposed cuts were laid out by Rep. Barney Frank’s (D-MA) Sustainable Defense Task Force in a 56 page report titled: Debt, Deficits, & Defense – A Way Forward. None of the service arms are spared.
The Navy will be reduced to eight aircraft carriers (from twelve planned) and seven air wings. Eight ballistic missile submarines will be cut from the planned force of 14, leaving just six. Building of nuclear attack submarines will be cut in half, leaving a force of 40 by 2020. The four active guided missile submarines would be cut, too. Destroyer building would be frozen and the new DDG-1000 destroyer program cancelled. Among other huge cuts, the fleet is to be reduced to 230 combat ships, eliminating 57 vessels from a current force level of 287.
The Air Force must retire six fighter air wings equivalents, and at the same time build 301 fewer F-35 fighters. The nuclear bomber force will be completely eliminated in the name of unilateral disarmament—the B-1 and B-2 and B-52 and other bombers will still be able to drop bombs, but their nuclear weapon wiring and controls will simply be removed. Procurement of the new refueling tanker and the C-17 cargo aircraft will be cancelled. Directed energy beam research and other advanced missile and space warfare defense projects will also be eliminated or curtailed.
Active duty Army personnel will be slashed from 562,400 to 360,000. That includes elimination of about five active-component brigade combat teams (the report is not exactly). The Army will also suffer a myriad of other cuts, including closure of overseas bases.
The Marine Corps would be cut by 30%, from 202,000 to 145,000, and the other funding cuts planned for the Corps mean the United States will not be able to mount a major amphibious landing on any hostile shore. Marine Corps programs to be killed include the V-22 Osprey tilt rotor aircraft and the Expeditionary Fighting Vehicle.
Downsizing and effictively disarming our military only gets them so far, so they cut benefits for the folks that will be left standing.
The hot button item of reducing pay, pension, healthcare and other benefits for our soldiers, their wives, their families and their widows is stated as: “Resetting the calculation of military compensation and reforming the provision of military health care…” Whatever those mysterious words will ultimately come to mean, the task force report shows a planned reduction of pay and benefits for the troops and their families to the tune of $120 billion.
All this to save $1 trillion. I have a better idea, scrap Obamacare, not our military. That will save a projected $1.2 trillion. An extra $200 billion of savings should please that noted deficit hawk Frank and we will still be able to defend ourselves.