When the discussion of federal spending involves billions of dollars, it’s never “a little too little, a little too late.”
Feeling pressure from the American public on the size of the U.S. deficit and runaway spending, the Obama administration has begun to formulate a deficit reduction plan. Officials are seriously considering using at least part of a $210 billion surplus in the Troubled Assets Relief Program (TARP) fund to lower what is projected to be a $1.3 trillion annual deficit.
The Office of Management and Budget also under the administration’s direction has asked all departments except defense and veterans affairs to plan two budgets for the fiscal year starting next October: one that has flat spending and one that envisions a 5 percent reduction in spending.
Of course, federal spending is complex, and there are plenty of opportunities for Congress and the administration to break their own rules. The proposed flat and reduced spending in all likelihood does not include entitlement spending, such as Social Security, that has automatic increases built into law.
Still, the effort to propose some kind of spending restraint, some kind of fiscal responsibility at a minimum puts the Obama administration on record. If the administration fails, and capitulates to a Congress that seems more and more pre-occupied with other things, it will have to face the music of not only Tea Party protesters but other citizens as well.
Obama’s OMB is also looking at “simplifying the tax code” and “revamping the corporate tax code,” but, according to The Wall Street Journal, White House Chief of Staff Rahm Emanuel is pushing for significant spending cuts to go with any planned tax increases.
Some members of Congress appear ready to get serious about deficit reduction as well. Sen. Kent Conrad, D.-N.D., who chairs the Senate Budget Committee, has said he won’t vote for raising the Treasury’s borrowing limit unless the administration gets serious about deficit reduction.
Some Obama administration officials remain wary that reducing the deficit by cutting spending could choke off economic growth and any recovery. But carrying a deficit nearly three times what it was just a couple of years ago will also be bad for the economy — if not now, then in the long run.
— The Free Press, Mankato, Minn.
