Washington Fiddles While The Budget Deficit Continues To Burn
Continuing a trend that stretches back nearly two years, the monthly federal budget deficit hit another record in April:
The Treasury Department said Wednesday that the federal deficit for April soared to $82.7 billion, the largest imbalance for that month on record. That was significantly higher than last year’s April deficit of $20 billion and above the $30 billion deficit that private-sector economists had expected.
The government generally runs surpluses in April, as millions of taxpayers file their income tax returns. But income tax payments were down this April, reflecting the impact of the recession, which has pushed millions of people out of work.
Total revenue for April was down 7.9 percent from a year ago, dipping to $245.3 billion.
The Obama administration forecast in February that the deficit for this year would hit $1.56 trillion, surpassing the record of $1.4 trillion set last year. Many private-sector economists think that this year’s imbalance will be closer to the $1.4 trillion set last year and that deficits will remain high for years to come.
Analysts estimate that roughly one-third of the increase in deficits over the past two years can be attributed to lost revenue — the result of fewer people working and lower corporate profits. Another third was from increased government spending that normally occurs in a downturn, such as higher payments for unemployment benefits and food stamps. The final third reflects added government spending on the $787 billion stimulus bill and the $700 billion financial bailout.
Despite all of this, there’s very little indication that anyone in Washington is actually serious about reigning in spending and bringing down a budget deficit that, if it continues at this level is clearly unsustainable. Democrats seem to think the problem will take care of itself despite the fact that they’re proposing budgets that would give us trillion dollar deficits for the foreseeable future.
And Republicans, well, all they’ve got up their sleeves right now are pointless gimmicks. Take, for example, YouCut, a program announced yesterday by House Minority Whip Eric Cantor:
Two weeks ago, I wrote on BigGovernment that the GOP Today is much different than the party was a few years back. I was glad that my post generated attention, and very pleased to read through the different responses — both positive and skeptical. Today I write again for two reasons. First, to announce an exciting new project devised by the House Republican Economic Working Group. Second, to take another step in earning your trust by showing you that we understand that actions speak louder than words.
Today, we are launching YouCut — a first-of-its-kind project designed to defeat the permissive culture of runaway spending in Congress. It allows YOU to vote, both online and on your cell phone, on spending cuts that you want to see the House — YOUR HOUSE — enact. That’s right, instead of Washington telling YOU how THEY will spend YOUR money, YOU can tell THEM how to save it. After several days of voting, on Monday, May 17th, we will announce the first winner and later that week House Republicans will call for an up-or-down vote on the spending cut. We will repeat this cycle every week for the rest of the year.
The problem ? Well, even if all five of the programs listed on the YouCut website were eliminated, it would amount to a savings of a mere $ 5,961,000,000 over five years, or just around .03% of the total expected Federal expenditures over the same period. And that’s not even what Cantor is proposing, he wants people pick just one project a week.
This isn’t serious budget-cutting, it’s gimmickry, and gimmickry is probably all we can expect until it’s too late.