President Barack Obama has proposed a budget in which the federal governments budgeted expenses and projected revenues will not intersect not next fiscal year, not in his hoped-for next term, not in any future his administration can foresee.
Those budget lines grow closer, starting now, which represents a reduction in the deficit, but by about 2014 they begin to run almost in parallel.
In other words, the deficit will remain.
What a majority of voters say they want is for the federal government to budget like they do minus the mortgages and car payments, high-interest credit cards, payday loans, and without harming local economies and individual income. Those caveats illustrate the problem.
The president any president is in a tough spot. Nearly any cut he might make will dump federal employees onto the unemployment roles, and the bigger the cut, the greater the rise in unemployment, which is the indicator by which most Americans judge the economy.
Federal spending is a significant component of the local economy in many places, including the interior West with its vast public lands. The Denver Post on Monday reported that Colorados military bases would be spared drastic reductions, but the money and civilian employment those bases bring demonstrates the difficulty in just cutting the federal budget. For better or for worse, the military-industrial complex is a real force.
The military is also an example of essential spending. Despite legendary inefficiencies and occasional poor decisions, hardly anyone believes that decimating national defense is a good solution to the deficit.
Throughout the rest of the budget, voters can come up with long lists of programs that benefit other people, some of them undeserving, but there will be no unanimity about eliminating agencies. Medicare and Medicaid cannot be reformed without serious pain, nor can many other programs, whether or not theyre labeled entitlements. Cuts can, and should, be made, but every program has its constituents, and this is an election year, not only for Obama but for the whole House of Representatives. Everyone wants the budget balanced, but not in their own backyards.
So attention turns to the blue line, which represents revenue. Its easy to claim that lower tax rates will spur investment in this country, but the math is more complicated than linking federal income tax cuts directly to job growth across the United States. The Silicon Valley will do fine; Dolores and San Juan counties are not likely to benefit much.
Meanwhile, interest will continue to flow to China.
No one seriously believes that the solution to the deficit is as simple as choosing a strategy: raise revenue or cut expenditures. Both will be required, in large and painful measures. House Republicans took a step toward acknowledging that (and their constituents ire) yesterday when they announced they would allow the payroll tax reduction to continue through the year without revenue to offset it.
Still, Americans are very weary of the either/or debates that have consumed so much of the nations time and energy. Is anyone serious about balancing the budget while caring about the effects on Americans? The discussion cannot be all about ideology. That doesnt work at home, and it doesnt work in Washington and this country greatly needs a plan that will work.
