Recently, House GOP leadership made a startling announcement. In an effort to close next year's massive $1 trillion deficit and begin paying the United States' gargantuan $21 trillion debt, they are finally prepared to do the unthinkable: make cuts to Social Security, Medicare and Medicaid.
If we are to address the staggering deficit and debt levels in the nation, these are exactly the programs that need to be cut. People rightly howl at the burdens that will fall on the recipients of these funds, and offer common rejoinders. We should make cuts to the military budget, they say, to close the gap. We should also ferret out waste and fraud from the system.
But those who make these claims simply have no idea what they are talking about. If we cut the entire military to $0, if we reduced the budgets of every branch of the military, the Department of Defense, Homeland Security, and Veterans' Affairs to nothing, we would only save about $800 billion. And what about taxing the rich? They already pay 34 percent of their incomes in taxes. Even doubling that to 68 percent wouldn't raise enough to balance the budget.
So Social Security, Medicare, and Medicaid remain on the table. Why? Because they presently account for about half of all federal spending, that's why. Without addressing those massive expenses, there is simply no way to balance the budget. It will not happen.
Enter Republican leadership, all of a sudden apparently willing to do what no one has even been willing to discuss in public since these programs came into existence. They are emboldened, for some reason, to reach out and touch the so-called "third rail of American politics."
So what does their courageous plan entail?
Sadly, not nearly enough to make a palpable difference in the nation's self-inflicted impending catastrophe. In their "A Brighter American Future" budget blueprint, the GOP calls for cuts of $4 billion to Social Security, $537 billion to Medicare, and $1.54 trillion to Medicaid, among others. All of these cuts occur over the space of 10 years. If all of the numbers turn out to be accurate, this would represent a savings of around $5 trillion over the next decade. But, according to the Congressional Budget Office, we would have to cut about $12 trillion to balance the annual budgets over that same period. So the GOP plan is at least $7 trillion short of what we need.
There are two things to remember here: All of these figures are based on exceedingly rosy budget projections, projections which most assuredly will not come to pass, and these cuts are spread out over 10 years, with the real cuts scheduled to occur far enough in the future for the current crop of legislators to get all the credit for fiscal prudence while foisting the political heat onto future politicians.
We have a $21 trillion federal debt because we continue to spend money we do not have. We can't address that problem until we take a sober and realistic look at what we can afford.
Unsurprisingly, what we can afford is considerably less than what we want. And as long as politicians are inclined to buckle to our desires at the expense of our future, we are on the road to financial ruin.
We will have to come to terms with the fact that cutting Social Security, Medicare, and Medicaid is the only way we can hope to balance the budget. The alternative is to reconcile ourselves with what the world looks like when the U.S. government goes bankrupt.
Antony Davies is associate professor of economics at Duquesne University. James R. Harrigan teaches in the department of Political Economy and Moral Science at the University of Arizona. They host the weekly podcast, Words & Numbers.