Ganging up on the deficit

If you could rescue the country and resuscitate Congress at the same time, why wouldn’t you?

That’s exactly what a bipartisan group of congressmen and senators is attempting, in campaigning – together – to get congressional leaders to “go big” and cut the nation’s deficit more than they’re supposed to.

A so-called “super committee” of 12 House and Senate members is meeting to cut the deficit by $1.2 trillion over 10 years before Nov. 23 – when cuts would become automatic and indiscriminate. The “Gang of 145” want deficit reduction of $4 trillion.

Pray the committee listens to the 100 House members and 45 senators.

We’ve reached a very real tipping point in American history. If the super committee doesn’t muster at least $1.2 trillion, the failure will resonate far, far beyond the Pentagon and other federal agencies, and even beyond recipients of Social Securty, Medicare and Medicaid. The psychological ripples will likely become a tsunami of gloom in the financial markets – threatening to sink the American economy even deeper into recession or worse.

If, on the other hand, the super committee “goes big” and listens to the Gang of 145 and cuts $4 trillion from the deficit instead of $1.2 trillion, the markets will see new rays of hope that Congress can indeed function and allow the private sector to do the same.

If the committee manages to cut the $1.2 trillion their colleagues have asked them to, the markets may tick up a bit, but let’s be real: Cutting $1.2 trillion over 10 years – when we currently borrow that much in a single year – won’t be anything to write home about.

Now, we happen to think that the deficit reduction, however much it ends up being, ought to be pure spending cuts – not tax increases. This is no time to take more money out of the private sector. And remember: Whatever the government spends is simply overhead: The wealth has to be created in the private sector before the government siphons it off.

Moreover, as the CEO of McDonald’s, Jim Skinner, notes, “In order to create jobs in America, you’re going to have to cut taxes … particularly in the business community. We pay some of the highest [corporate] taxes around the world. There needs to be some leveling.”

In order to get Democratic support, there may have to be new revenues in the mix. We would argue that cutting taxes and spending and shrinking government would, indeed, result in higher revenues flowing to government coffers from a more robust private sector. But more revenues could also be realized by closing loopholes and ending exemptions.

As long as the bulk of savings – say, 80 to 90 percent – is from spending cuts, Republicans should jump at the chance to go big on deficit reduction.

If the super committee fails to even get to $1.2 trillion, as Rep. Heath Shuler, D-N.C., says, it would be devastating to the country and its economy.

And, adds Rep. Mike Simpson, R-Idaho, “who is going to suffer the most whenever the economy goes down? It’s those who are less well off.”

In short, it’s in every American’s interest that Congress finally find some common ground. We hope Democrats will let go of their empty, divisive and unproductive populist rhetoric to punish the rich. In return, Republicans should be open to modest changes in the tax code that, without increasing tax rates, could grow government revenues some.

The numbers alone tell you that spending cuts must constitute the vast majority of deficit reduction. Historically, the federal government has been about 18 percent of the country’s gross domestic product; today, its revenues are at 15 percent, while spending is at 25 percent. Clearly, there’s more room to cut spending than to increase taxes.

It’s time to get this done. And for the sake of our economy and our children’s future, it’s time to go big.

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