Our federal government has exploded in constant dollars, from $2.4 trillion in the last year of Bill Clinton in 2000, to over $3.7 trillion in the last year of Barack Obama.
To deal with the dysfunction in Washington, let’s start by recognizing the driving factors of this exploding federal government. Bureaucrats and career politicians are to blame.
Bureaucrats want more power and control, and they obtain it by growing their department or agency and budget. For too many career politicians, the driving force is merely getting reelected. To do this, they have mortgaged our children’s future in order to protect their political power.
As two business guys, we often have to say, “we cannot afford it,” when evaluating investment opportunities. What restrains potential excesses in spending is the danger of going out of business. In Washington, that is not a restraining risk.
{mosads}The result is a national debt dangerously approaching $20 trillion. That debt is projected to rise to nearly $30 trillion over the next decade, unless we change direction right now. Future unfunded liabilities — largely consisting of entitlements and interest on the debt — push our total debt burden to over $100 trillion.
Yet this reality was rarely even mentioned during the 2016 presidential campaign.That is because another malady pervades our politics: the denial of reality. This destructive affliction takes many forms:
1) Spoken denial, such as President Obama’s assertion that, “(A)nybody who says we are not absolutely better off today than we were just seven years ago, they’re not leveling with you. They’re not telling the truth.”
2) Withheld truth: when pressed to use his bully pulpit to educate the public on the realities of our fiscal crisis, President Obama told Sen. Johnson, “Ron, we can’t show the American public numbers that big.”
3) Willful ignorance: As former businessmen, we are repeatedly amazed at the inadequacies and complete lack of accountability throughout the federal government. There is no common accounting system. Budget gimmicks are the coin of the realm. No metrics to evaluate effectiveness of programs are required. Agencies regularly ignore cost-saving recommendations. Whistleblowers are routinely retaliated against with impunity.
This willingness to overlook reality is not shared by the American people. The outcome of November’s election is proof. People want and are demanding real change from Washington.
As a like-minded outsider and businessman, President-elect Donald J. Trump understands that we must turn Washington around by making some bold changes and breaking through the gridlock.
The status quo is never acceptable in business and it cannot be accepted in Washington any longer. Tinkering around the edges of our problems will not work. We must make structural changes to deal with the crisis confronting us.
First, we need to start with economic growth to rebuild consumer confidence. In business we call this harvesting the low-hanging fruit.
Our massive regulatory burden and an uncompetitive tax system are crushing business formation and sucking the very life out of our free-enterprise system. This can be fixed. ObamaCare, excessive environmental and other harmful regulations should be first on the chopping block. Dramatic tax simplification, and regulatory reform, must be priorities.
Once we have put our economic house in order, we must address the crumbling structure of our fiscal house. Economic growth will provide the federal government with additional revenue without raising taxes or imposing even more costly regulations on hard-working Americans and small businesses.
However, the fiscal gap is enormous.
There are three principle drivers of our debt: Social Security, Medicare and interest on the national debt. All three are mandatory spending items, constituting 70 percent of our total budget. This money is spent automatically without input or debate.
Congress only has control over the remaining 30 percent, so the current budget process prohibits debate on some of the largest components of federal spending.
Clearly, the budgeting process in place since 1974 is broken. It has only funded the government four times in the past forty-two years. For the past nineteen consecutive years, continuing resolutions have been required to keep the government open, and in effect automatically adding to the debt. Of the twelve appropriations bills required to fund the government, over the last forty-two years Congress has only managed to pass an average of 2.6 appropriations bills. No wonder the debt is exploding.
We, along with Senate Budget Committee Chairman Mike Enzi (R-Wyo.) and House Budget Committee Chairman Tom Price (R-Ga.), have been working on a much needed clean-page, politically neutral approach to the federal budget process. It is the only way to save Social Security and Medicare for future generations, and it is a vital step to dealing with our national debt.
To strip the incentives for political games and brinkmanship, the budget resolution would carry the rule of law. All mandatory spending would be brought under the budget, subjecting it to full and open debate. Finally, real consequences would be imposed on members of Congress for failing to fund the government on time.
Ultimately, if we are to avert a complete fiscal meltdown we need an amendment to the Constitution to require a balanced budget. Forty-four states require this in some form. The alternative — continuing on our current path — is clearly unsustainable.
Many people in Washington know we cannot continue the same failed economic and fiscal policies, but are in denial and unwilling to make the bold changes required. Maybe career politicians really do think the government is immune to the consequences that would ruin private-sector organizations run this badly. Those politicians are wrong.
If there is any lesson two businessmen can bring to a new Congress and impart on the new president, it is that even in Washington, reality cannot be denied forever.
Perdue and Johnson are members of the Senate Budget Committee.