The ‘c-word’ word of politics needs to be adopted in Washington. House and Senate members working on a federal budget should embrace compromise. Although the word often draws scowls from both Democrats and Republicans, it could lead to a deal that is better for Americans.
Last month, when Congress agreed to reopen government, part of the deal included creating a working group of House and Senate members to pass a budget by a December 13th deadline. While Congress is somewhat deadlocked as usual, there is potential for productive bipartisanship with regard to spending cuts and tax reform, extending past this short-lived working group.
Democrats recently have begun advocating for closing tax loopholes, largely those which apply to the wealthy. Their goal in this is not to close loopholes so taxes can subsequently be lowered on all Americans, but to maintain tax rates in order to raise revenue to pay for more government spending.
Catering to the federal government’s ambitious spending appetite may not be wise, especially when families increasingly can’t afford to give up more of their money to the government.
However, closing loopholes allows taxes to be lowered. Lower taxes promote economic growth and lead to more tax revenue.
Furthermore, while a noble goal, fixing the tax code in one month is unrealistic and will not solve the immediate issue which caused the working group to be created — the government is unable to pay for all that it spends.
If Democrats are serious about tax reform, something for which Republicans have advocated tackling for years, they should pursue it in Congress outside the working group. This way, they have more time to work on simplifying the multi-thousand page tax code, rather than tear it up and hastily glue it back together. There is a lot of common ground on tax reform, including reevaluating tax expenditures which “reward American business for doing business overseas,” as Senator Ron Wyden (D-Ore.) suggests.
Currently, the working group needs to find spending cuts. Government spends too much of what it doesn’t have. That is why the congressional working group exists. The concept of a man borrowing your money to drive a Ferrari he cannot afford is unimaginable, but the government doing something similar is commonplace.
Democrats and Republicans need to offer spending cuts. Republicans want to reduce entitlement spending, and have shown willingness to budge on defense spending. Entitlement spending is so important because the government spends so much money it doesn’t have on entitlement programs. It is unsustainable.
In 2012, about 44 percent of federal spending went to entitlements. Democrats want to raise revenue in order to pay for entitlements, but that is unrealistic. It is much like a middle-class father insisting taking a second job will suffice in helping him pay for a private island he bought. Both sides need to work together to make entitlement programs workable and affordable, or provide alternatives.
Senator Tom Coburn’s annual “Wastebook,” detailing massive and unnecessary spending, offers much room for common ground on spending cuts. The Cato Institute’s “Downsizing the Federal Government” details numerous potential cuts, many of which do not fall along party lines.
While this potential to reform government spending and taxing exists, it is up to a partisan and reluctant House and Senate to embrace compromise.
