Cooper: Heading over fiscal cliff

Cooper: Heading over fiscal cliff

July 27th, 2019 by Clint Cooper in Opinion Free Press

The U.S. Capitol is seen from the roof of the Canadian Embassy in Washington, D.C. (AP Photo/J. Scott Applewhite)

Photo by Associated Press /Times Free Press.

The headlines tell us a bipartisan debt and budget bill has been passed in the U.S. House.

Pardon us if we don't stand up and cheer.

Oh, there are positive aspects to it. It means — given U.S. Senate passage and the expected signature of President Donald Trump — we won't have to worry about the threat of a government shutdown for a while or Republicans and Democrats blaming each other for driving us to the brink of a shutdown.

But it extends for two years the fact that no one in Washington, D.C., seems to care if we're driving over a fiscal cliff.

Trump is happy because suspending the amount the United States can borrow and raising the spending caps locked in more money for the military and veterans. Democrats are happy because the bill continued to protect some favored domestic programs. Together it's about $322 billion more in spending for the next two years.

Woo hoo!

Unfortunately, it also means a deficit this year that should top a trillion dollars and a total debt of $22 trillion.

Hey, those are just numbers on paper, right? Wrong.

That means we owe $22 trillion more than we have. It means each year, as the deficit goes up, we have less money available for all the things in the budget that are discretionary. It means the next economic crisis could mean disaster.

Don't look for us to lay this solely at the feet of Democrats, who have not mended their free-spending ways since the days of President Franklin Roosevelt and are the worst kind of hypocrites when they try to blame it all on Trump.

There's plenty of blame for all.

Trump's tax cuts are a part of the problem, but it is a fact that the tax cuts have caused government revenue to rise. It's just that revenue isn't rising enough to offset their long-term affect. But spending is rising even faster, the same way it did following President Ronald Reagan's tax cuts in the 1980s and George W. Bush's tax cuts in the 2000s.

Sen. Lamar Alexander, R-Tennessee, defended his support for the bill Thursday by saying the "problem is mandatory spending on entitlements, including Social Security, Medicare, and Medicaid." It is inappropriate, he said, to blame other spending, mentioning defense, national parks and national laboratories.

The state's senior senator has worked hard on committees to maintain and increase funding for national parks and national laboratories, the first a combined gift to America and the second a needed group working toward medical and other scientific breakthroughs.

But we believe that since there is no movement on entitlement spending, defense spending and non-defense discretionary spending also have to be reined in.

The truth is, though, neither Democrats nor Republicans truly want to see cuts in the annual increases to their most-favored programs, much less actual cuts.

Alexander said the Congressional Budget Office reported discretionary spending had risen at about the rate of inflation for the past 10 years (at least partially due to the 2011 Budget Control Act) and would continue to rise at about the rate of inflation for the next 10 years.

Inflation has risen 18% in 10 years, so a combined spending increase of 20% or so is not an insignificant amount.

Nevertheless, Alexander is right about entitlement spending, and he reminded voters in a news release that he'd once tried to do something about it. In 2013, he and former Tennessee Sen. Bob Corker introduced the Fiscal Sustainability Act, which he said would have reduced the growth of entitlement spending — the growth, mind you, not the spending — by nearly $1 trillion over 10 years.

"The problem," he said, "was that Sen. Corker and I were the only co-sponsors."

In the House Thursday, Republican Reps. Chuck Fleischmann, D-Chattanooga, and David Kustoff, R-Germantown, and Democratic Rep. Steve Cohen, D-Memphis, voted for the bill. Democratic Rep. Jim Cooper, D-Nashville, and the other five Republicans voted against it.

Without any kind of brake on entitlement spending, Alexander said in a speech on the Senate floor Thursday, discretionary spending will decrease from 31% of total federal spending to about 22% in 2029. It is projected that in 2025 the country will spend more on interest on the debt than it spends on the military.

It's an unsustainable course. It's a course, unless it's stopped, that leads to similar economic disasters as have fallen Greece and Venezuela in recent years.

It's a course that, in some way, will require both spending cuts and added revenue, depending on how the pie is to be sliced.

But for today Republicans and Democrats cheer a bipartisan debt and budget bill. And the American people go about their business, staring at the next cat video on their phones, binge watching the latest Netflix series and competing to see who can be the most offended by someone else. Meanwhile, a giant fiscal shadow creeps ever closer.

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