Addressing the Budget Deficit Problem

Statutory budget controls in effect from 1985 to 2002 were designed "to reduce the budget deficit" (Lynch, 2011, p. 1). The Balanced Budget and Emergency Deficit Control Act (1985) and the Budget Enforcement Act (1990) were primary drivers of deficit reduction mechanisms, which provided controls to cap Congressional spending and support to the legislative process with regard to reducing the deficit. The first of these Acts actually enabled Congress to increase the deficit but did so with the stipulation that "gradual reduction" be accomplished over the following six-year period (Lynch, 2011, p. 1). The deficit goals and time allowance were extended in 1987 via the Balanced Budget and Emergency Deficit Control Reaffirmation Act -- essentially a piece of legislation that enabled Congress to kick the can. The 1990 Budget Enforcement Act introduced a pay-as-you-go approach to reducing the deficit and caps on discretionary spending. The Act was altered and extended twice -- in 1993 and in 1997. By the 21st century, the deficit would be exploding as a result of wars and national security growth in the post 9/11 world -- and following the banking implosion of 2008 in the wake of the housing bubble crisis, bailouts would further increase the deficit, putting Americans even further on the hook (Burton, 2016). If anything, these decades showed that Congress was not really doing anything to reduce the deficit: its actions were impotent and the outcomes evident -- the deficit has increased dramatically. Congress is simply dysfunctional (Binder, 2015).

The budget does not exist in a vacuum. The deficit is the result of a number of policies and actions taken by Congress and the White House via Executive Order. Any legislative attempts to reduce the deficit are akin to attempting to tape a decapitated head back onto a body and have it dance. The effect might last for a minute or two, but the head invariably falls off again. What measures are necessary to address spending and revenues are ones that must be incredibly more substantial and cohesive: in short, budget cuts have to be made, wars have to be brought to a halt, spending has to be curtailed and income has to rise. Trump's plan to slash corporate taxes in order to attract more businesses to the U.S. is a good start because it provides a means for the American economy to grow (something it has not done in years). More businesses in the U.S. means more jobs -- and even if corporate taxes are lowered, the fact that more workers are having income means that more money will be flowing (the velocity of money is a major factor in contributing to a market economy) and more income will flow into public coffers as a result.

The reduction of the budget is not an enterprise that should be undertaken piecemeal: it can only be accomplished through a comprehensive overhaul of the strategy of government from the top-down. This means that it depends upon the policies of the acting Administration in conjunction with a Congress that is oriented towards supporting and executing austerity policies (Ban, 2015). Because the deficit is the result of too much borrowing and spending (if interest rates increase, paying the interest on what has been borrowed will alone be enough to bankrupt the U.S.), the only policy to pursue is one of cuts, reduction of government offices, cuts to the bureaucracy (Berry, 2016), promotion of business through incentives such as what the Trump Administration poses to offer, and end to the financing of wars and interventions, and an end to the funding of the outdate NATO alliances. These cuts would be sufficient to have money left over to actually spend on Americans so that health coverage for Americans could actually be something that the budget could include, instead of being the first thing to be cut.

References

Ban, C. (2015). Austerity versus stimulus? Understanding fiscal policy change at the International Monetary Fund since the Great Recession. Governance, 28(2): 167-183.

Berry, C. (2015). Deficit reduction and budget irresponsibility. Austerity Politics and Economic Policy: 69-85.

Binder, S. (2015). The dysfunctional Congress. Annual Review of Political Science, 18:

1-499.

Burton, M. (2016). Deficit-reduction in the USA. The Politics of Austerity: 119-133.

Lynch, M. S. (2011). Statutory budget controls in effect between 1985 and 2002.

Congressional Research Service Report for Congress. Retrieved from https://fas.org/sgp/crs/misc/R41901.pdf