Focus on comprehensive spending restraint

Treasury Secretary Geithner argues that turmoil in world markets will result if Congress fails to raise the national debt ceiling next month, while others point out that rubber-stamping such an increase would send the worst possible message to investors; our leaders are failing to get serious about getting the nation’s finances back in order. 

That’s why such an effort must shun tax hikes and focus on comprehensive spending restraint. And encouraging development of U.S. energy resources can supplement these strides toward deficit reduction.

Substantial government revenue results when oil and gas operations are allowed to add value to the economy. Supplemented by mineral rights, corporate taxes, and other fees energy companies pay, federal coffers received almost $100 million a day from traditional energy firms.

The White House, though, is pushing to strangle this golden goose, by adding another $37 billion to the industry’s already heavy tax burden through effectively raising tax rates.

Meanwhile, the President’s budget proposal released just two months ago projected that total federal spending would grow an average of 5.2 percent every year starting in 2014. This is unsustainable, and the administration’s deficit outline doesn’t do enough to improve the picture.

The President must also do more to restructure Medicare and Medicaid than to ask Americans to put their faith in the health care overhaul of 2010 and another commission to make more changes. Immediate action must be taken to ensure the solvency of entitlement programs.

Specific proposals include moving to a patient-centered “premium support” model for Medicare, block grants for Medicaid, restructuring government pension plans, and yes, Social Security reforms that many GOP lawmakers are reluctant to confront. The latter must entail steps like benefit formula adjustments and means-testing.

Two of our biggest issues – energy security and health care reform – must be considered in the context of our persistent deficit problem.

Pete Sepp is the executive vice president for the National Taxpayers Union.