Budget Policy: Americans broadly agree that government has gotten too big and that spending needs to be cut. Great. But just what should be cut? On that, their message is a bit more muddled.
Perhaps not surprisingly in these days of trillion- dollar deficits and $15 trillion-plus in total debt, a recent poll found that six of 10 Americans back cutting the federal budget across the board.
Sounds like a clear majority for big cuts. But when the latest IBD/TIPP Poll asked what, exactly, should be cut, we got a very different answer. Our survey presented a number of programs — including Medicare, Social Security and defense — and asked 901 Americans if they'd be willing to cut them.
In instance after instance, the answer was no. And overwhelmingly.
Four of five (82%) of those queried said they didn't want Medicare cut. Three of four (75%) rejected the idea of cuts in Social Security. Defense? Reductions in that perennial budget target were rejected by six in 10 (60%).
Likewise, four of five (80%) opposed raising gasoline taxes, and 55% said lay off the mortgage deduction. Higher corporate taxes? No on that too. In fact, 45% favored lowering taxes on U.S. corporations to the same level found in other nations vs. 40% against such a move.
In short, it's no surprise the bipartisan deficit-reduction supercommittee charged with finding $1.5 trillion in budget cuts over the next 10 years has been deadlocked for months. They know any real cuts they make will be mightily criticized.
As we've noted, this whole "supercommittee" process is a joke played on the American people by President Obama and his pals in the Democratic Congress. They've gone 2 1/2 years without passing a budget, even though they controlled the entire federal government for two whole years.
The "budget" that the president presented last February cut nothing and left in place trillions of dollars of red ink and a soaring debt. The plan was so pathetic, it couldn't get a single vote of support from Obama's own party.
Now, as Wednesday's deadline for a deficit reduction deal looms, Democrats suddenly pretend to be serious. But they won't agree to do anything unless ruinous tax hikes are included.
They're using a pliant media to pressure Republicans to renege on their 2010 pledge not to raise taxes, thereby supplying the Democrats electoral fodder for 2012.
Everyone better get serious, and soon. And no, we're not talking about the supercommittee process. We're talking about addressing our long-term budget imbalance with big cuts in spending ASAP.
In the next 10 years, based on Congressional Budget Office estimates, the deficit will total $8.5 trillion. In that context, the $1.2 trillion in reduction now being quibbled over by the supercommittee is a pittance.
Last week we hit $15 trillion in debt, and we're adding to that at a rate of $1 trillion a year. At 100% of GDP, U.S. debt puts us on par with the fiscal basket cases of the European Union.
A dent in a deficit of this magnitude cannot be made without significant spending cuts. Tax hikes like those pushed by the Democrats are nonstarters. They'll sink the economy, virtually all rational economists agree.
The problem is, as our polls show, Americans like their benefits. Today, 48.5% of all Americans receive some kind of benefit from government. More than 60% of all federal spending consists of checks written to individuals — up from 46% as recently as 1975.
We've become so accustomed to government handouts that spending is hard to cut. This poses a grave danger to our republic, which relies on educated citizens who are free, virtuous and independent to survive.
So what to do?
Since 2007, the various failed stimulus and bailout programs have pushed federal spending up 40%. Yet we're still missing more than 6 million jobs, and unemployment remains stuck at 9%.
The Keynesian binge plainly hasn't worked. Why not return spending to its 2007 level, adjusted a bit for inflation, and tweak entitlement spending? If we did, we could balance the budget in a little over a decade — without major tax hikes.
As for the supercommittee, if it can't cut a deal in the next few days, across-the-board cuts of $1.2 trillion — including defense — will kick in.
Would that be so bad? We're inclined to agree with Larry Kudlow, who wrote last week that such cuts would be far better than hitting the economy with Democrats' massive tax hikes, which would kill growth.
Our government today is 25% larger in real terms than it has been on average since World War II. In short, we're traveling down the same road of ruin as the euro zone. Unlike the EU, we can stop it now. All it takes is a little spending discipline — and a return to the fiscal self-reliance that once made America great.