November 4, 2007 | Commentary on Taxes
Gloomy forecasts from Washington show that because of a tsunami wave of entitlement spending starting when the baby boom generation starts to retire next year, balancing the budget would mean forcing up taxes to unprecedented levels.
Absent reform, the Congressional Budget Office (CBO) projects that spending could drive total federal taxes to 30 percent of the nation's economy by 2045. The historical average, and today's level, just tops 18 percent. Add in state and local taxes of about 10 percent, and the level will be over 40 percent, or roughly the same as slow-growth Europe.
Making matters far worse, Congress seems paralyzed in addressing the explosion of entitlement spending on programs such as Medicare and Social Security. Few lawmakers -- or presidential candidates -- are even willing to talk about restraining such programs. Fortunately, some lawmakers are focusing on practical ways to force serious decisions on the problem. Some support having a bipartisan commission issue a plan to end ever-rising taxes and spending. Among these, Reps. Frank Wolf, R-Va., and Jim Cooper, D-Tenn., have introduced a bold commission bill intended to achieve public acceptance and bipartisan action.
Wolf and Cooper recognize that today's political deadlock stems from two things. One is public anxiety about the changes in retirement programs needed to prevent huge unfunded obligations being passed on to our children and grandchildren. Today those obligations are the equivalent of handing every child born in America a mortgage liability of $170,000. The other reason is that lawmakers from both parties worry that they will be shortchanged in any budget deal and then face the wrath of angry constituents.
The Wolf-Cooper bill solves this difficult political equation. It creates a bipartisan commission designed to address the unsustainable imbalance between federal commitments and revenues while increasing national savings and making the budget process give greater emphasis to the long-term fiscal picture.
Their commission would not craft some backroom deal and foist it on the American people. Its critical first phase would be a series of public hearings nationwide to talk honestly about the long-term fiscal problem and the tough options for fixing it, and to build public support for a broad plan of action. This means a serious national conversation about balancing the concerns of the young as well as the elderly. Armed with that guidance from ordinary Americans of all ages, the commission would craft detailed recommendations that would receive "fast-track" consideration by Congress.
The Wolf-Cooper commission proposal recognizes that a combination of political fear and partisan grandstanding is causing gridlock in Washington -- and if that is not ended the result will be an economic disaster that nobody wants. But by devising a bipartisan commission that would draw the public into the discussion, force Republicans and Democrats to offer serious proposals and reach agreement, and then limit Congress' ability to thwart that agreement, these lawmakers have come up with an idea that really could avoid the calamity ahead.
Stuart Butler is vice president for domestic affairs at The Heritage Foundation heritage.
First appeared in the Tennessean