What the Deficit Commission Draft Ignores

by Brian Riedl

Washington is finally turning its focus towards the unsustainable spending and deficit trends that risk long-term economic calamity. Fiscal Commission co-chairmen Erskine Bowles and Alan Simpson deserve credit for laying out a comprehensive plan to address these trends. Thus far, substantial attention has been paid to their proposed cuts in Social Security, defense, and federal employment. Less noticed has been the large portion of federal spending escaping the budget knife, such as:

• Obamacare. The report ignored this program and the estimated $2.5 trillion price tag for its first decade of implementation.
• Anti-poverty spending. Since 1990, anti-poverty spending has grown faster than Social Security, Medicare, defense, and education combined. Yet its $647 billion budget was not even scheduled for post-recession reforms.
• Education. Despite growing 155 percent faster than inflation over the past decade, the $100 billion education budget was targeted for only a few billion in cuts off its growth rate.
• Health research and regulation. This $65 billion in spending has also grown enormously over the past decade, yet was spared the budget axe.
• Veterans’ Benefits. There are legitimate arguments for and against paring back the massive growth in veterans’ spending. The Fiscal Commission draft bypasses all but $700 million of this $125 billion budget.
• Natural resources and the environment. Another fast-growing category of federal spending, this $47 billion budget would be only slightly nicked.
• Agriculture. The Fiscal Commission draft recommended trimming just $3 billion out of the wildly wasteful and outdated $25 billion farm-subsidy system.

Out of $3.5 trillion budget, the Fiscal Commission draft found less than $10 billion in programs worthy of outright elimination, and contained no plans to devolve or privatize major federal functions. And while the report would fundamentally reform Social Security, its proposed Medicare reforms amount to little more than short-term tweaks of a broken system. Bowles and Simpson should be commended for many of their proposed spending cuts. Yet they still would leave federal spending well above the 20.3 percent of GDP historical average. America needs a more comprehensive discussion of how large of a federal government we want, what should be left to the states, and what should be left to the people. Bowles and Simpson have, if nothing else, started that.

Brian Riedl is Grover M. Hermann fellow in federal budgetary affairs at the Heritage Foundation.

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