There Certainly Is a Difference Between Pink Unicorns and Spending Cuts

RCM ^ | 01/30/2013 | Michael Strain

[SeekAndFind]

House Republicans were wise to suspend the debt ceiling until the middle of May, effectively resequencing the series of upcoming fights over the federal budget. They are now poised to make their stand in March, using pressure points provided by the sequester - the across-the-board cuts to defense and non-defense discretionary spending - and the expiration of the stopgap measure currently used to fund the government.

Both fights are much preferable to a battle over the debt ceiling - the House Republicans would have erred in using the threat of government default as leverage to enact spending cuts. But the House Republicans should use the events of March to try to force a deal that restrains federal entitlement spending, even if it means accepting some additional revenue from tax reform.

There are some on Capitol Hill who believe that immediate spending cuts (like those in the upcoming sequester) are preferable to future cuts generated by reforming the structure of our entitlement programs. This preference suggests a serious misunderstanding of our budget problems.

In 1972, the federal government spent 13.8 percent of GDP on categories other than net interest, healthcare (e.g., Medicare and Medicaid), and Social Security. Forty years later, in 2012, that spending had fallen to 11.6 percent of GDP. And it is projected to continue to fall in the decades to come. Non-entitlement spending isn't the problem.

In contrast, Medicare, Social Security, and other health-related federal spending are about 10.4 percent of GDP, up significantly from 8.1 percent of GDP only a decade ago. The non-partisan Congressional Budget Office forecasts that in 2052, in the absence of structural reforms to cut spending, Social Security and Medicare will consume 14.4 percent of GDP by themselves. Throw in other health-related spending (including Obamacare) and these categories alone account for well over eighteen percent of GDP - about two-thirds of projected total (noninterest) federal spending.

In other words, the growth of federal spending is coming from entitlements. Entitlement reform is what's needed.

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[blueunicorn6]

What a crock. Everyone knows there’s no such thing as pink unicorns. We’re all blue or white. And the white ones are racists.

[Lancey Howard]

But the House Republicans should use the events of March to try to force a deal that restrains federal entitlement spending, even if it means accepting some additional revenue from tax reform.

That's where I stopped reading this crap.
Starve the beast to death. Not one more penny.