It took Washington’s professional politicians about two seconds to begin issuing accusatory statements in response to Standard & Poor’s downgrade of the U.S. credit rating. Predictably, those statements sought to shift the blame to somebody else.
Senate Majority Leader Harry Reid blamed Republicans for refusing to consider tax hikes as part of the debt-ceiling deal.
House Speaker John Boehner condemned Democrats for demanding a debt ceiling hike with no spending cuts or entitlement reforms. Whatever else we might say about them, our political leaders certainly know how to point fingers at each other.
But playing the blame game won’t fix the economy. And the economy cannot be fixed without addressing Washington’s spending addiction. As Sen. Jim DeMint, R-S.C., notes, tax revenues flowing into the U.S. Treasury since 2003 — the year of the biggest Bush tax cuts — have increased 20 percent, but government spending has skyrocketed 60 percent during the same period. That is the main reason why the U.S. government now has a national debt approaching $14.5 trillion, an amount equal to the value of the nation’s entire economy.
The debt-ceiling deal signed into law last Tuesday by the president was historic in the sense that, if it is carried out as promised, it will result in the first year-to-year reduction in discretionary spending since 1953. But the S&P downgrade points to two undeniable facts about the deal: There is immense doubt that it will live up to its terms, and even if it does, it won’t cut spending nearly enough.
As S&P said in its downgrade statement: “We view the act’s measures as a step toward fiscal consolidation. However, this is within the framework of a legislative mechanism that leaves open the details of what is finally agreed to until the end of 2011, and Congress and the administration could modify any agreement in the future.”
Even under the best of circumstances, according to S&P, “the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.”
Our fiscal plight is the clear result not of Americans paying too little of their hard-earned income in taxes to the government, but of government spending trillions more dollars than it receives. The solution is equally obvious: Stop spending more than the government receives in tax revenues.
The debt-ceiling deal established a congressional supercommittee tasked with finding $1.2 trillion in additional spending cuts. Why stop there? It’s past time for our leaders to stop blaming each other and get on with the job of balancing the nation’s budget.