Unless Congress and the White House act soon, over $1.2 trillion in automatic, across-the-board spending cuts are set to take effect on March 1 and be phased in over the next decade. With a projected deficit of $845 billion this year, isn’t that a good thing? Well, no. Not really.
This package of cuts (aka “sequestration”) was originally intended to be so idiotic and painful that it would force leaders to finally agree on a comprehensive solution to our growing debt. Unfortunately, that hasn’t worked out quite yet.
Cue yesterday’s statement from President Obama:
“... I believe [Congress] should at least pass a smaller package of spending cuts and tax reforms that would delay the economically damaging effects of the sequester for a few more months until Congress finds a way to replace these cuts with a smarter solution.”
President Obama is absolutely right to push Congress for a smarter solution to address our fiscal imbalance.
Immediate, deep, and indiscriminate spending cuts would be counter-productive to our economic recovery in the short term. Additionally, scaling back necessary investments from education to research would be detrimental to our competitiveness in the long term.
And, you guessed it ... Young people would be disproportionately impacted by sequestration, as we already have the highest unemployment rate among any age demographic — and we plan on sticking around for the longest. That is why the sequester should be replaced with a smarter and more effective deficit reduction plan. So, what needs to be done?
While President Obama and Congress should be commended for already enacting $2.35 trillion in deficit reduction over the next decade, they are only about halfway to what is needed to change the trajectory of our unsustainable debt, according to a recent analysis by the Committee for a Responsible Federal Budget. It’s a good deal more than what some (including the president) are willing to admit, and it really matters where these additional savings are achieved.
As former fiscal commission co-chair Erskine Bowles recently said, “We’re just doing all the easy and stupid stuff.” We have raised tax rates on the wealthy and we have slashed discretionary spending. Great, but the hard and essential stuff includes comprehensive tax and entitlement reform that pairs significant spending cuts with some revenue increases.
The math shows we cannot solve our debt problem without changes to Social Security and Medicare, and it would be unreasonable to do so without also making our tax code flatter, simpler and fairer. The politics are just as clear: both sides need to tackle issues that they traditionally have been opposed to touching in order to strike a deal. Now let's get on with it.
Nick Troiano is a co-founder and Field Director for The Can Kicks Back, a non-partisan, Millennial-driven campaign to fix our national debt and reclaim our American Dream.