Once politicians and pundits start talking in terms of hundreds of billions and even trillions of dollars, eyes glaze over. Most Americans simply aren’t equipped with long government ledgers in their heads, and even when written down on paper, 12- and 13-digit numbers can be mind-boggling.
Stripped to their essence, however, the budgetary choices facing the country are not all that complicated.
Most Americans understand that our deficits are too high. So let’s assume, strictly for the sake of argument, that folks in Washington are able to reach a consensus on how much we need to reduce that deficit from current levels. Let’s assume that the Democrats and Republicans settle on a deficit-reduction target of $500 billion a year, a figure chosen here because it is a nice, round, easily comprehended number.
Now let’s add some real numbers to it.
On top of that $500 billion, Mitt Romney would increase defense spending to some 4 percent of GDP, which would add roughly $200 billion a year to the deficit. That would raise the total amount of offsets ($500 billion + $200 billion) that we need to find elsewhere to $700 billion. Romney would also insist on retaining tax cuts to the rich, including reductions in or even elimination of estate and gift taxes. As recently as the first debate, Romney has insisted that he would not accept increased revenue as part of any budget deal.
Given the mathematical realities of the budget, and with defense off the table, almost all of that $700 billion would have to come from programs that benefit the despised 47 percent, with no sacrifice whatsoever required of those Americans doing quite, quite well in this economy. Medicaid, which provides health insurance to poor children and long-term care for some 60 percent of elderly Americans in nursing homes, would be a prime target; millionaires and billionaires would be exempt.
So that’s one approach.
President Obama, on the other hand, proposes to ask the Pentagon to share in the belt-tightening, reducing defense spending by some $100 billion a year. He also proposes to ask more affluent Americans to share in the sacrifice to at least some degree, increasing revenue by some $80 billion a year. Under that second approach ($500 billion minus $100 billion minus $80 billion), we’d still have to find some $320 billion a year in annual non-defense savings. That would be a significant number, and the pain it would cause would be real.
However, $320 billion — and the pain that comes with it — would be considerably less than the $700 billion in spending cuts required under the Romney approach. In addition, rather than dump the burden entirely on those already struggling in the current economy, the sacrifices would be shared. Given the income inequalities that have manifested themselves in the last two decades, and that continue to grow, that hardly seems unfair.
Those are the two choices, laid out in stark, direct terms.
– Jay Bookman