If you’ve been following the debt-limit rancor in Washington, an emerging theme should not inspire confidence: Indeed, the credit rating hysteria that ensued after politicians reached a debt deal intones that the things will get worse before (if) they get better.
The problem that has become increasingly more evident is that Washington no longer recognizes the burden it places on American taxpayers. Instead, government brazenly assumes its ever-encroaching rule over Americans’ lives: the President’s plea for a “balanced” approach was rich with acrimony about how the nation’s employers aren’t doing their part to balance his broken budget. Indeed, the President himself torpedoed a debt compromise not because it raised revenue but because it didn’t raise the right kind of revenue—that is, in the form of higher taxes on the American people.
This is why, in 2011, the average American taxpayer had to work until Aug. 12 to fully pay off the burdens imposed by government at all levels. Americans for Tax Reform Foundation publishes an annual study that calculates how many days it takes to pay for local, state and federal regulations and spending. The President’s fixation on higher taxes to fuel unprecedented spending has led to Americans working 224 days out of the year for Uncle Sam.
This year marks the third straight year the Cost of Government Day (COGD) has fallen in August. Prior to the Obama administration, COGD had never fallen later than July 21. A failed “stimulus” spending plan, unscrupulous bank bailout and several “recovery” summers later, Americans are now working 104 days just to pay for the federal spending burden.
As the recent debt limit debate highlighted, the government does not take in nearly enough money to fund its aggressive spending agenda. As a result, the United States must rely on borrowing for almost half of its spending plans. Inconveniently for the Obama-Pelosi-Reid gang, the debt-limit debate also illuminated the true price of its 21st century Keynesian experiment: The $2.2 trillion the government will collect in revenues this year is enough to cover the $2.1 trillion worth of entitlement spending for which we are obligated in 2011. It is not, however, sufficient to fund both the mandatory promises made and the President’s explosive $1.4 trillion discretionary spending plan. The administration, suddenly forced to pick between a shovel-ready job and Grandma’s social security check, refused to make a choice.
Instead, the President clamored for higher taxes, insisting that continuing to bleed the American people dry would solve his spending crisis. Despite his challenge to Republican House Majority Leader Eric Cantor that this aggressive tax-and-spend regime would resonate with the base, the American people didn’t buy it.
That the President relented after his bluff was called signals we are at a critical junction in the debate on the size of government. It has become clear that taxes can’t—and, after Republican resolve in the negotiations, won’t—solve what is and will continue to be a spending problem.
But the choice still remains as to whether the new normal, defined by a post-“stimulus” and bailout world, is a temporary bump in the road to an earlier Cost of Government Day or the beginning of a lasting legacy of excessive government growth.
We have seen the promise of a turning tide in the 112th Congress. First, the final Continuing Resolution for the year cut $40 billion in spending—the first time a full-term CR didn’t raise spending, much less enact the largest discretionary rescission in modern history.
Then, the House passed the most radical spending plan to ever emerge from the Budget Committee. By adopting comprehensive entitlement reform, cutting spending and implementing budgetary restraint, the plan crafted by Budget Chairman Paul Ryan would drop 18 Cost of Government Days spent paying for federal spending alone.
Then, the debt limit deal recently agreed upon in Washington. While the politics of ratings agencies has soured the mood on the compromise, the negotiations should inspire taxpayers that an earlier Cost of Government Day may be around the corner. Like the CR, the debt-limit deal represents an unprecedented opportunity taken by lawmakers to enact spending reform. Until now, the debt limit has been raised routinely and unconditionally, failing to actually provide any restraint on the country’s ballooning debt.
There is still much work to be done. That the Cost of Government Day has continually occurred in the middle of August illustrates the work fiscally prudent lawmakers have cut out for them. Is it possible to have an earlier Cost of Government Day after the prodigious government growth witnessed over the past few years? With the debt-limit deal setting up many more opportunities for fiscal conservatives to show their prudential credo this year, taxpayers may know sooner rather than later if that possibility can become a reality.