Biden says he will not even begin to discuss the kind of reforms that could put our nation back on the path of fiscal solvency.
Today, President Biden is releasing a plan that he claims will trim $3 trillion off the deficit and save Medicare from financial collapse. In reality, what we already know about the president’s plan indicates it will likely be a mishmash of shell games, budget gimmicks, and massive tax hikes that will harm economic growth while merely delaying Medicare’s insolvency by a few more years.
On its current trajectory, Medicare will be unable to make good on its bills in 2029, triggering automatic cuts that will slash health-care benefits for millions of elderly Americans who rely on the program. The president and his team of economists and Ph.D.s want to kick the can down the road and let others deal with the long-lasting structural problems that have plagued the program for decades. Is this really the best we can do?
If Biden truly wanted to get us out of the financial hole we find ourselves in, there is a much simpler solution available to him: Stop digging. That is, Biden could single-handedly eliminate $1.3 trillion from the deficit by repealing the costly executive orders issued during his first two years, especially his unconstitutional student-loan-forgiveness plan, which remains on hold pending a Supreme Court decision. Instead, Biden is intent on adding more than $1 trillion to America’s growing mountain of debt.
The reason Biden is doomed to fail at reducing the deficit is that he refuses to acknowledge the heart of the problem: It’s not that we tax too little, it’s that we spend too much. Yet Biden and his team refuse to cut one dime of spending.
With tax collections already at an all-time high, there is simply not much additional revenue that can be squeezed out of American taxpayers. In 2022, Americans paid an amount in taxes equal to nearly 20 percent of U.S. GDP — just a fraction less than our ancestors had paid to fuel the Allied war machine during World War II, when the top marginal income-tax rate was 94 percent.
Assuming any additional rate hikes don’t shove our precariously balanced economy into a full-blown recession, they will certainly shrink our economic output and lead to lower net revenue collected, as Reagan economist Art Laffer famously observed.
Every day under President Biden, we are falling deeper into in an economic pit that we cannot tax our way out of. If we fail to turn things around soon, the next generation will bear a debt burden totaling $100 trillion or more by 2050.
It is time for political leadership to acknowledge reality. Denial has allowed the fiscal problems before us to fester like a cancer. In 1965, entitlement programs such as Social Security (which Biden’s proposal does not even begin to address) and Medicare constituted one-third of the national budget. In the intervening years, mandatory spending has metastasized to 76 percent of the budget, dwarfing all other spending, including national defense.
President Biden’s policy is insolvency. Biden says he will not even begin to discuss the kind of reforms that could put our nation back on the path of fiscal solvency. Every year that we wait means more debt and more painful solutions. The American people deserve better.
Biden’s latest budget of runaway spending and taxes makes clear that we need new leadership. We need leaders who will level with the American people, who will lead our nation to the kind of commonsense and compassionate reforms that will preserve these programs for Americans who need them most, and who will save America from the unprecedented debt crisis that our children and grandchildren are currently facing.
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