A STRAIGHTFORWARD PATH TO A BALANCED BUDGET…. It’s hardly a secret that the federal budget spends just a little bit more than it takes in, to the tune of about $1.3 trillion. The huge budget surplus Clinton bequeathed to Bush a decade ago — remember when the debt clocks had to be shut down because they couldn’t run backwards? — seems like a distant memory.
Under the circumstances, it’s worth emphasizing that concerns about the deficit are entirely misplaced. When the economy is struggling and unemployment is high, the reasonable thing to do is borrow money and invest in the economy.
Still, many Americans, especially on the right, have expressed an interest in getting the budget shortfall under control. Given the deficit’s size, it seems daunting, if not impossible, to close the gap anytime soon. But Lori Montgomery notes today that there’s actually a fairly straightforward path to a balanced budget — it’s just one voters and policymakers aren’t willing to consider right now.
As lawmakers bicker over whether to extend the Bush-era tax cuts, not just for the middle class but also for the wealthy, many economists and budget analysts say there’s a simple way to curb borrowing: Let the tax cuts expire for everyone.
Official and independent budget estimates show that letting tax rates spring back to pre-Bush levels for all taxpayers would bring the country within striking distance of meeting President Obama’s goal of balancing the budget, excluding interest payments on the debt, by 2015.
“If we actually ended the Bush-era tax cuts, that would pretty much do it,” Obama’s recently departed budget director, Peter Orszag, said in an interview last week with CNN’s Fareed Zakaria. “If you do a bit on the spending side and then end the tax cuts, you pretty much get there.”
Congress wouldn’t even have to do anything — Republicans designed their own tax policy to have the lower rates expire at the end of the year. There wouldn’t even be a filibuster to overcome, since doing nothing would let the ’90s-era rates return on schedule.
For all of those conservative budget hawks out there, this should sound pretty appealing, right? By 2015, the only part of the deficit remaining would be interest on the debt.
I saw recently that the debt is allegedly the “Tea Partiers’ top issue.” Surely, then, they’d welcome this effective approach to deficit reduction, wouldn’t they?
