Austerity an inevitable aspect of life

By Harrison Searles

Austerity is inevitable. It is simply impossible for any person or organization to live beyond their means for any period of time without having to compensate for that in the future. The longer one waits to face the problem of unsustainable consumption and spending, the more critical the problem becomes, the harsher austerity measures must become. Recently, President Obama has released his budget for the new fiscal year and has called for $1.1 trillion in spending cuts and tax increases over the next decade.

Though this is certainly a step in the right direction, the president’s budget, as well as most Republicans in Congress, are ignoring the 800 pound gorilla in the room and their plans will therefore fail if they do not take it into consideration.

In his foreword to the 2011 budget, the president claimed that his budget contained a “blue print for the work ahead” and that a major mission for solving the problem of the deficit was streamlining programs and getting rid of those that did not work. He noted that it included 120 programs for either reduction or termination and that for the sake of “a fiscally sustainable path” a freeze on non-defense discretionary spending was outlined for the next three years. Obama even follows that by saying: “This freeze will require a level of discipline with Americans’ tax dollars and a number of hard choices and painful tradeoffs not seen in Washington for many years. But it is what needs to be done to restore fiscal responsibility as we begin to rebuild our economy.”

Furthermore, the Pentagon’s budget would be reduced by $78 billion in the next five years and the spending on the wars in Afghanistan and Iraq reduced. As a result of all this, discretionary spending will reach 5.6 percent of GDP, the lowest that it has been in around 40 years. Even though this may seem to be an earnest attempt to solve the problem of the federal deficit before it grows into a full-fledged crisis, a basic analysis of the situation shows that it is simply a farce

The proposed budget is entirely focused on the discretionary spending approved by Congress, but herein lies its weakness because the rampant deficits facing the federal government cannot be solved simply by trimming it. Instead, any viable solution must also take into consideration the role that entitlement spending will have now and in the decades to come. In 2010, discretionary spending only constituted under half of the budget of the federal government, $1.375 of the total $3.618 trillion, with the rest being entitlement (i.e. spending that is on auto-pilot and does not require congressional approval) and payments on the interest for the debt  

Furthermore, in the past two years alone, there was been $2.7 trillion added to the federal debt and yet Mr. Obama is speaking about reducing the deficit by $1.1 trillion over the next ten years as if it is a Herculean challenge that will require a great feat of will power. Of course, the new budget has taken into consideration a prediction that the American economy will quickly bounce back from the Great Recession and produce income for the government to tax, but this rosy picture must be considered cynically after the administration’s repeated prediction failures. However, it will not even undo the damage of the orgy of spending that has marked his first two years without even considering the debt accumulated by his predecessor and it does not even come close to putting the federal government back on stable ground financially.

The new budget manages to leave unaddressed the so-called “mandatory,” entitlement spending from Social Security, Medicare and Medicaid that will drive the deficit in the future. An aging population and healthcare costs will propel this part of the budget to around 14 percent of GDP by 2021 and that percentage will only accelerate at a greater pace after that. Many seek to protect entitlement spending and have instead suggested cutting funding for programs like the war on terror and pork-barrel spending, but this is simply not enough. All discretionary spending could be cut with the federal government would still be running a deficit with 2010 conditions holding, but this sidesteps the real issue: there are around 77 million baby-boomers who will retire soon and put a strain on those welfare programs that cannot be withstood if their current course remains static. There must be some reform of how these programs operate so that not only are they able to provide what has been promised to that generation and so that they can do the same for the promises given by the federal government to the subsequent generations. All that Obama’s budget has managed to say is that these issues need to be addressed.

However, to blame the president alone would be unfair and to even blame Washington alone would be passing the blame. When there are heated debates over cutting programs as inconsequential to the government’s duty to its citizens as Planned Parenthood, it should surprise no one that politicians, who more often than not follow their own electoral self-interest, steer clear of pursuing those issues more deeply. Speaker of the House Boehner spoke the truth when he noted on NBC’s “Meet the Press” that the reason Washington has yet to tackle entitlement reform is that most Americans do not recognize it as a major issue yet. All three programs have not only strong interest groups that would be able to mobilize great resources against any attempt of reforming them and they have also created a class that is very much dependent on them thus making easy fodder for appeals to emotion.  Any attempt to reform them will result in a political battle that will require that the self-interest of politicians be aimed at solving these problems and until then pathetic attempts like the president’s recent budget should be all that is expected from Washington.

Harrison Searles is a Collegian columnist. He can be reached at [email protected]