The federal budget continues to hemorrhage red ink as members of Congress — Democrats and Republicans — dither about how to spend the money the nation continues to borrow at a staggering rate.
Sure, the Republicans want to spend less of the borrowed money, but they still want to spend.
Meanwhile, Democrats yearn for increasing taxes so they can spend even more of the borrowed cash. And the Republicans want to reduce taxes making it tougher to pay down the national debt, which now sits like Jabba the Hutt at a hefty $16.7 trillion.
Unfortunately, the problem is so large in scope that our national leaders seem to be suffering from budget paralysis. They talk, but they don’t move forward.
It’s time to take action that, at the very least, points the nation in the proper fiscal direction.
Ultimately, a balanced budget amendment is needed because Congress has shown it is incapable of long-term fiscal discipline. That’s not on the horizon anytime soon.
But a pair of U.S. senators — one from each party — have come up with a bold plan that could wake up lawmakers.
It calls for the Senate to review every allowable income tax deductions — one by one.
Senate Finance Committee Chairman Max Baucus, D-Mont., and the ranking Republican on the committee, and Sen. Orrin Hatch of Utah, want to take a “blank-slate” approach to the tax code.
That means starting from zero with even the sacrosanct mortgage interest deduction needing approval to be reinstated.
A letter from Baucus and Hatch points out “the tax code is also littered with preferences for special interests. We plan to operate from an assumption that all special provisions are out unless there is clear evidence that they: (1) help grow the economy, (2) make the tax code fairer, or (3) effectively promote other important policy objectives.”
Starting at zero makes sense.
It’s the only way there will be any progress at getting rid of arcane and unnecessary deductions likely weaseled into law via quid pro quo politics.
The end result will certainly contain the most popular and prudent deductions such as the child credit, the lower tax rate for dividends and capital gains and, of course, the mortgage-interest deduction.
Unfortunately, this bipartisan plan isn’t anticipated to get far because of the heavily partisan bickering over how to reduce deficit spending and begin reducing the national debt.
President Obama and Democrats want a tax overhaul to generate additional revenue as a way to reduce borrowing. Republicans will agree to the revenue only if Democrats agree to curb spending on expensive health and retirement benefits.
And that’s just the tip of the differences between Democrats and Republicans.
Perhaps Baucus and Hatch are tilting at windmills, but their efforts at leadership and statesmanship are appreciated and, more importantly, needed for the sake of the nation.