Anyone can make specious claims about the federal budget. Witness, for example, House Minority Whip Steny Hoyer’s assertion that our federal government is not going broke, and his party’s broader argument that “Medicare as we know it” is somehow sustainable with just a few tweaks.
It is much easier to engage in such rhetorical deception than it is to draw up a serious long-term proposal to fix the nation’s debt crisis. Not only do such budget plans invite close scrutiny, but they are also far more labor-intensive than simply casting demagogic stones at the plans of others. This may explain why, to date, majority Senate Democrats have failed even to present a budget plan this year.
Fortunately, we need not rely on Democratic senators for leadership. The Peterson Foundation’s Solutions Initiative brought together six think tanks — two conservative, two liberal and two centrist and challenged each to present a detailed plan to solve our fiscal crisis-in-waiting, using the same uniform assumptions. Because everyone had to begin with the same set of facts, and everyone had to war-game the same budget scenario over the coming decade and beyond, the typical demagoguery that surrounds budget battles was rendered moot. The end result is a pure, apples-to-apples comparison of six visions for America.
All of the groups that took part are to be commended for sticking their necks out. But the liberal groups’ proposals demonstrate why there was a risk in doing so. In order to balance the budget over the long term, they both require far higher taxes than America has ever paid before. By 2035, the Center for American Progress wants the government to take 23.8 percent of the economy right off the top. The Economic Policy Institute sets an even more ambitious revenue projection of 24.1 percent of gross domestic product. Note that in our nation’s entire history —including the times when high earners paid tax rates above 50 percent — total federal government receipts have never exceeded 21 percent of GDP (the level in 1944).
It is noteworthy that despite planning for huge tax increases and draconian cuts to the defense budget, the Economic Policy Institute plan actually increases the national debt over the next 25 years. The Heritage Foundation plan, on the other hand, provides for the fastest debt reduction, despite making far more realistic assumptions about the level of future revenues (18.5 percent of GDP).
This returns us to the question of why Senate Majority Leader Harry Reid, D-Nev., has said that Democrats would be “foolish” to present a budget. When multiple plans are compared fairly, side by side, it becomes clear that the left’s vision for America bears little resemblance to the nation we know today.