The federal budget deficit for the fiscal year ending in September won't be as grim as first predicted. The Congressional Budget Office reports the deficit will only be about $1.1 trillion. Only?
The country simply cannot continue to spend $1 trillion a year more than it receives in tax revenue. The U.S. should be paying down the national debt, now at $15.3 trillion, instead of increasing it.
Yet, the CBO predicts the deficit will hover around $1 trillion for the next few years if spending and revenue don't change.
"We will not solve this problem unless both sides, Democrats and Republicans, are willing to move off their fixed positions and find common ground," said Senate Budget Committee Chairman Kent Conrad, D-N.D. "Republicans must be willing to put revenue on the table."
But nothing is going to happen this year as every member of the House, a third of the Senate and the president are up for re-election. Significantly reducing deficit spending requires making tough decisions about reducing the cash going out or collecting more tax revenue. Tough decisions tend to make voters unhappy, which is why Congress will continue to borrow and spend.
At some point, and we desperately hope it is sooner rather than later, the members of Congress have to put the nation ahead of their entrenched political ideology. They have to reach the common ground Sen. Conrad talked about.
The end of the war in Iraq and the winding down of the war in Afghanistan should result in significant saving.
The actual dollar cost of war over the last decade is difficult to pin down as the political spin put on the accounting tends to blur the numbers. So a rough guess of war spending is about $2 trillion. The costs will continue to mount as troops remain stationed around the world and billion of dollars are spent carying for those physically and psychologically wounded by war.
Still, military funding will likely decrease over time if the U.S. does not engage in another war.
But that savings won't be enough to stop the annual flow of red ink. The CBO report said the deficit would be close to elimination if the tax cuts enacted in 2001 and 2003 (and renewed in 2010 through the end of this year) were allowed to lapse, The Associated Press reported. Under that scenario, the deficit would drop to $585 billion in 2013 and to $220 billion in 2017.
The downside, of course, is higher taxes are not pleasant and they could threaten the current -- albeit painfully slow -- economic recovery.
In the end, we continue to believe more cuts have to made and revenue has to be increased. And this has to be done through shared sacrifice. Everybody, even those with modest incomes, should increase their contribution to the federal treasury even if it is only something very modest like $50 a year.
Continuing to point at others to solve this real deficit problem clearly isn't the solution.