November 3, 2005
A Realization that Overspending Must Stop
By Edwin
J. Feulner
Author Malcolm Gladwell
writes about the "tipping point," the moment when an
idea that has been quietly building support takes hold. Suddenly
the idea has the power to change everything.
Well, with "bridges
to nowhere" and other needless pork projects in the news,
our federal government's overspending seems to have reached a
tipping point.
Last year, Washington
spent almost $22,000 per household. And to make matters worse,
it collected "only" about $19,000 per household in taxes,
leading to a massive $317 billion budget deficit.
That's almost $3,000
per household in deficit spending -- enough for the average family
to make two months' mortgage payments. Overall spending increased
by 8 percent last year and is one-third higher than it was when
President Bush took office.
This spending is stirring
the ire of ordinary Americans. And it has inspired a broad coalition
of conservative groups to work together to bring the federal budget
under control.
Yes, spending always
climbs during wartime. But the War on Terrorism isn't the main
reason it's soaring. From 2001 through 2003, spending rose nearly
$300 billion, but only a third of that went to the military. Another
11 percent went to various homeland security and rebuilding projects,
while 55 percent went to new federal projects unrelated to national
security.
That's like a homeowner
who, after a break-in, installs a new door on his home -- then
goes out and buys a new car. The door is necessary. But the car
isn't. And both have to be paid for, eventually.
Here are just a few
of the unnecessary domestic projects our government has funded
since Sept. 11, 2001:
* The 2002 farm bill,
estimated to cost $180 billion over 10 years. Sadly, even though
this bill was sold as a measure to "save" small farmers,
most of this money goes to large agribusinesses.
* The No Child Left
Behind Act, passed in 2002, which doubled federal spending on
education.
* The 2003 Medicare
prescription-drug bill, expected to cost $724 billion in its first
10 years and up to $2 trillion over the following decade. Lawmakers
started with an admirable premise: Provide drugs to needy Americans.
But they instead designed a universal entitlement program that
is complex and expensive. Worse, it will accelerate the loss of
private-sector coverage among the three-fourths of seniors who
already have drug insurance.
* The 2005 transportation
bill, which included 6,373 earmarks adding up to more than $25
billion in wasteful spending.
Speaking of Medicare,
it's important to note that while our children and grandchildren
eventually must pay for today's deficit spending, the long-term
problem is entitlements. We're on the cusp of a massive transfer
of wealth from working Americans to retirees, although most retirees
are fairly well off already.
Federal entitlements
today consume nearly two-thirds of federal spending, and that's
expected to double over the next decade. We are less than one
generation away from Congress being unable to pay for anything
other than Medicare, Medicaid, Social Security and interest on
the federal debt, leaving not so much as a penny for defense or
homeland security.
Clearly that can't
be allowed to happen, so lawmakers really have two choices. They
can raise taxes each year until the average household is paying
$11,000 more than it does today, or do nothing and watch the federal
debt expand. Of course, if we increase the debt, we ensure that
even a minor interest-rate increase would induce a spiral of rising
debt and interest rates, eventually grinding the entire economy
to a halt.
Bottom line: There's
simply no way the government can keep all the promises it's making
today, and there's no way it can afford to spend tens of billions
of dollars more each year. Things must change.
Conservatives have
complained about undisciplined federal spending for years, but
Hurricane Katrina triggered a tipping point. Now, excessive spending
is on everyone's mind. Recently, leaders of a coalition including
The Heritage Foundation, the American Conservative Union, the
Club for Growth and the Family Research Council united to pressure
the administration and Congress to control spending. Over the
next few weeks, I'll explain the spending problems in detail and
offer practical solutions.
Edwin
J. Feulner, Ph.D., is President of The
Heritage Foundation.
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