Americans’ antipathy toward Congress is sinking faster than the stock market. In the wake of the debt-ceiling fiasco, a CNN poll last week showed 84 percent disapproving of the way Congress is handling its job. (You’ve got to wonder whether the other 16 percent really understood the question.)
Much of the aversion surely is rooted in lawmakers’ inability to take any kind of decisive action as the economy languishes. The resulting uncertainty is making a bad situation worse.
But we suspect most Americans have also gotten fed up with the disingenuousness of the debate over spending and taxes. A more straight-forward approach to budgeting is needed, one that avoids smoke-and-mirrors accounting and is honest about the nature of spending growth. The debate also needs an injection of honesty about tax rates, which despite all you hear to the contrary, are at or near historic lows.
Since 1974, the federal government has used a “baseline budgeting” process, which institutionalizes spending growth by building in automatic increases for inflation and anticipated program participation. If a program’s budget is projected to increase by, say, $100 million, and Congress only appropriates $80 million, it’s considered to have taken a $20 million cut.
Senate Majority Leader Harry Reid’s recent proposal in the debt-ceiling debate is a good example of this kind of deception. It purported to cut $2.2 trillion in spending. Sounds like a lot, right? Almost half of those savings, though, came from winding down the wars in Iraq and Afghanistan. It’s money that wasn’t going to be spent anyway. Yet it still counted as “new” reductions.
Why not simply engage in honest accounting? Because the current system lets politicians, of both parties, take credit for holding the line on spending, while still winning political points for providing more services. Maybe Congress’ plummeting poll numbers indicate Americans are wising up to the scam.
Similarly, honesty needs to be brought into the discussion of taxes. According to the Tax Policy Center, a family of four earning the nation’s median income is paying less in federal taxes today than at anytime since 1955. And the Tax Foundation reports that even when state and local taxes are added, the per-capita tax burden hasn’t been this low since the 1960s. The highest tax bracket is at a 20-year low, and various deductions, credits and preferences bring corporate taxes down even more.
Higher tax revenues, along with long-term spending reductions, must both contribute to deficit reduction. But Washington’s unwillingness to have honest discussions about them doesn’t promote optimism. Or positive approval ratings.
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