Monday, April 20, 2015

What Does The Tea Party Really Want - I?

Ken O’Brien

The Tea Party as a political movement traces its origin back to 2009. It is known for its conservative positions. It demands a reduction in the U.S. national debt and federal budget deficit by reducing government spending and taxes. In many ways it constitutes the conservative core of the contemporary Republican Party.

During a recent floor speech, Senate Budget Committee Chairman Mike Enzi (R-WY) described conservative objectives this way: "A balanced budget approved by Congress will help make the government live within its means and set spending limits for our nation. Hard-working families are fed up with [President Obama's] spend-now, pay-later policies and are closely following our effort [on] a balanced budget." 

Unfortunately, there is little evidence in support of Enzi's argument. As the nonpartisan Congressional Budget Office (CBO) recently forecast, there is no near-term debt problem. Adjusted for inflation, federal spending is lower now than when Barack Obama first took the oath of office. As the economy has recovered, the yearly deficit has been reduced by almost two-thirds since President Obama first entered the White House. And while the national debt as a percentage of the economy has plateaued, projected yearly deficits through 2025 under President Obama's proposed budget remain at or below the 50-year historical average of 2.7 percent. That stable picture explains both why Americans' concern about the budget deficit has eased and why the Fitch rating agency this week reaffirmed the USA's Triple A credit rating. 

But there's an even bigger problem for Tea-Partiers so eager to swing a heavy budget ax. Since 1965, federal spending has exceeded revenue by that 2.7 percent of GDP. Yet polls consistently show that outside of foreign aid, there is no area of government spending a majority of Americans wants to decrease. And with the inescapable requirements to provide 21st century education and infrastructure even as the population grows older, the U.S. will need to invest more money in its people, not less. All of which means that to the degree that the United States even needs to "live within its means" right now, it should do so not by spending less, but by raising more revenue.

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