The New York Times has a fantastic budget interactive where you can test the effects of different combinations of tax increases, budget cuts, or both. After putting together my own plan for balancing the budget, I started wondering whether the Tea Party’s basic plan (tax decreases and even greater spending decreases) is at all realistic.
What would be the basic rules for a Tea Party compatible budget?
- No tax increases, obviously.
- No large harm to corporate interests, given the immense amount of corporate support the Tea Party has attracted.
- No military spending cuts, because well, it’s the Tea Party.
- No farm subsidy cuts, because the Tea Party needs lots and lots of rural support.
Given these restrictions, the plan I put together looks like this:
- Cut foreign aid in half (saves $17 billion in 2030)
- Eliminate earmarks ($14 billion)
- Cut pay of civilian federal workers by 5 percent ($17 bilion)
- Reduce the federal workforce by 10 percent ($15 billion)
- Other cuts to the federal government ($30 billion)
- Cut aid to states by 5 percent ($42 billion)
- Enact medical malpractice reform ($13 billion)
- Increase the Medicare eligibility age to 70 ($104 billion)
- Cap Medicare growth starting in 2013 ($562 billion)
- Raise the Social Security retirement age to 70 ($247 billion)
- Tighten eligibility for disability ($17 billion)
Given these cuts (some of which are less than politically realistic) and taxes that remain at their current levels (remember the Tea Party wants to cut taxes), the budget would still have a $300 billion shortfall in 2030. If Tea Party orthodoxy is followed and taxes are actually cut, then that shortfall grows enormously.
What does this say? It says that even the most optimistic prediction of balancing the budget only through spending cuts that don’t hurt the DOD, rural or corporate interests is simply not realistic. Remember that the likelihood of raising the Medicare and Social Security eligibility to 70 would be pretty tough, and capping Medicare growth is damn near impossible. If you remove the savings from a Medicare spending growth cap, the budget shortfall skyrockets to $839 billion!
Balancing the budget will require real sacrifice. But the Tea Party remains popular mostly by rejecting that kind of sacrifice. If we want to get the deficit under control, we need to realize that Tea Party ideology won’t be part of the equation.