2018-12-01 / Viewpoints

We’re drowning in debt

By Lowman S. Henry

(Lowman S. Henry is chairman & CEO of the Lincoln Institute in Harrisburg. He welcomes emails at lhenry@lincolninstitute.org.)

A report earlier this month from the Independent Fiscal Office revealed that Pennsylvania faces at least a $1.7 billion deficit entering the 2019-2020 state budget process.

That pales in comparison with the federal government, which for the current fiscal year is expected to come perilously close to running a trillion-dollar deficit. The fiscal year 2019 federal budget deficit is 18 percent greater than the deficit rung up in 2018 largely due to a massive omnibus spending bill passed by Congress last December.

In this midst of this spending orgy, some conservatives are offering plans to begin getting the budget under control. One particularly promising idea put forth by Senator Rand Paul has been aptly titled the “Penny Plan.”

Realizing that most peoples’ eyes glaze over when talking about billions and trillions, Sen. Paul has simplified the discussion by proposing that for every on-budget dollar the federal government spent in fiscal year 2018, it spends one penny less for each of the next five years. That would reduce spending by $13.35 trillion over the next ten years.

Keeping in mind that much federal spending is “off budget,” that means total spending will still increase by 14.6 percent during those ten years. Thus, those who howl at the prospect of reducing on-budget spending by one percent per year for five years will see an overall increase in federal spending.

The one penny per dollar cut does not apply to Social Security and other safety net programs. It also makes no specific policy assumptions, allowing Congress and the bureaucracy to determine how to achieve one-percent annual reductions by increasing efficiency, consolidating services or other means.

Meanwhile, back in Pennsylvania, the likelihood of an extended budget battle in 2019 has grown dramatically with the Independent Fiscal Office’s report.

Like their colleagues in Washington, D.C., many legislators in Harrisburg have been addicted to higher spending. They have utilized a series of budget gimmicks and one-time revenue sources in an effort to avoid making hard decisions.

Fiscal conservatives will find their voices amplified in the coming legislative session. The Achilles heel, however, remains weak-kneed Senate Republican “leadership,” which tends to cater to spending interests. As a result, strategies for reducing spending will be driven by the House, which is much more taxpayer-friendly.

With divided government at both the federal and state levels, getting spending under control -- which is difficult under the best of circumstances -- will be even more so this coming year.

Bipartisan unity only seems to exist when both sides are feasting at the taxpayers’ table.

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