Once again, after all the sound and fury amounting to virtually nothing, the debt limit issue was resolved and once again an unnecessary crisis was averted. The good news is that both sides were able to agree on a reasonable compromise. The bad news is that it was all a waste of time and far too risky, pointing the need to eliminate the debt limit. It will always be raised unless a majority of morons decide to default on America’s loans. In that case, global economic chaos would ensue, and millions of Americans would lose their jobs.
While some on the left complained the compromise primarily hurt the neediest amongst us, Democrats were relatively satisfied. On the other hand, many Republicans, especially the so-called Freedom Caucus, were so livid they did not get the trillions is spending cuts they demanded, they’ve held up fellow Republicans’ legislation. That will teach those “Rhinos.” The idol of the Freedom Caucus recommended if they did not get their trillions in cuts they should go ahead and default. That is the kind of advice one might expect from a man who has defaulted on his loans so often that no American bank will loan him a dime.
There is some evidence that a debt reduction was not the major goal of the GOP. Take the case of the massive cuts to Biden’s budgeted increase in funding for the IRS. It eliminates enough new auditors that the Office of Budget Management said the move will increase the debt more than it will cut. Most likely their intent was more likely to add defense spending while protecting the rich and major corporations from tax increases while cutting back some of the Biden Administration’s accomplishments.
There are economists who believe the debt is no problem as long as it is less than our GDP. At last peek, it was at 95%, far below that of Japan which is 227% of its GDP. Nevertheless, I am all for reducing the Federal Debt. Interest on it accounts for 7% of the Federal Budget.
We can reduce the debt via increased revenues and spending cuts. The former would be easy if the GOP were not so loyal to their major donors. Major corporations pay far less than they should. For instance, all but one of Big Pharma’s eight largest drug makers claim most of their profits come from overseas, when in fact that is not the case. Corporate loopholes and tax code insertions amount to corporate welfare, and most of it goes to the most successful and least needy companies. Likewise, the wealthiest pay far less, percentage wise, than the average American.
Agreeing on spending cuts will be no easy chore. First, one party views the social net as aiding the undeserving of assistance while giving financial aid to corporate America. Democrats, of course, disagree, and until they find common ground expect no major cuts. The second factor is that there is surprisingly little discretionary spending to cut.
Social Security, the military, Medicare, along with CHIP and the ACA, account for 59% of the federal budget. Another 11% stemmed from economic security programs, which in 2019 alone lifted 34 million Americans above the poverty line. That brings us to 70% of the budget. Veteran benefits, government retirement, education, transportation, agriculture and natural resources, science and medical research, and law enforcement add another 15%. Many believe foreign aid accounts for nearly half the budget. It is less than 1%.
One “untouchable” spending item should be reviewed. Our military budget is larger than the next 10 militaries combined. How much is actually needed to remain the only unbeatable force on Earth? A bipartisan commission should look deeply into where we could best make spending cuts and leadership of both parties in the House and Senate should agree to accept their recommendations. Only by putting aside politics can Congress make considerable cuts to the Federal Debt. This needs to be done within this decade.
Michael Adkins is a former Chair of the Hancock County Democratic Party.
