America's bankruptcy bomb has a short fuse
Americans for Prosperity:
Congress and the president are shortening the fuse
Imagine paying an extra $15,000 a year in taxes. For 50 working years.
That is the burden Washington is placing on our children and grandchildren.
America's unfunded government liabilities over the next 75 years are between $100 trillion and $200 trillion, depending on how you crunch the numbers. Those are the spending promises our politicians have made through Medicare, Medicaid, Social Security, the Pension Benefit Guaranty Corp. and other federal programs, including "Obamacare."
According to realistic estimates by the Congressional Budget Office, the unfunded liabilities in Medicare alone are $89 trillion.
Let's take a midway total liability estimate of $150 trillion. If we divide by the 90 million children in this country who are under the age of 18 (and who did not vote for the politicians who made the spending promises), it comes to more than $1.5 million per child over their lifetimes — above and beyond what they are currently scheduled to pay in taxes.
Over a 50-year working lifetime, that's $30,000 a year. Lucky for them, financial markets will put some of that burden on those of us who are currently working adults. But if they absorb half of the burden, that would be an average of $15,000 a year in extra taxes per child or grandchild.
Of course, any attempt to actually collect that much extra revenue from American workers or their employers would create massive, long-term structural unemployment and destroy economic growth by causing even more capital and jobs to move overseas.
Unfortunately, Congress and the president are doing nothing to defuse America's gigantic bankruptcy bomb; instead, they are shortening the fuse.
These past few months were a critical time for conservative members of Congress to stand firm behind their promises to get runaway government spending under control. Congress considered two of the biggest spending bills of the year, the Ryan-Murray budget deal and the farm bill conference report.
The first disappointing vote was on the budget resolution in October. Crafted by House Budget Chairman Paul Ryan and Senate Budget Chairman Patty Murray, the deal boosted discretionary spending to a whopping $1 trillion a year for each of the next two years. Worse, the plan shattered previously agreed-upon spending caps for fiscal year 2014 by $45 billion — an alarming increase and a broken promise.
Tom Jenney is director of the Arizona chapter of Americans for Prosperity.(Photo: Tom Jenney)
The deal also further nickel-and-dimed American families by hiking airline ticket taxes and making changes to military pensions.
Most alarming is the fact that the Ryan-Murray deal traded higher spending now in exchange for the promise of $28 billion in cuts in 2022 and 2023. American taxpayers deserve spending cuts now, not promises to cut spending in the future.
The second vote was the farm bill conference report in February. This legislation authorized $1 trillion in spending over the next decade. Passed under the false guise of helping small farmers, the bill expanded a number of corporate welfare programs such as crop insurance, massive taxpayer subsidies and revenue guarantees for politically connected farmers.
It also neglected to make any meaningful reforms to ballooning food-stamp spending, which has more than doubled since President Obama took office and is rife with abuse.
Americans for Prosperity urged legislators to vote against both bills, and we will include these votes in our next congressional scorecard.
We are grateful to report that a number of Arizona's legislators stood up for American taxpayers and voted against both of these bloated bills. House members who voted the right way included Trent Franks, Paul Gosar, Matt Salmon and David Schweikert.
On the Senate side, Jeff Flake also voted correctly. AFP applauds these members for standing up against more government handouts and higher spending.
Christine Harbin Hanson is the federal issues campaign manager for Americans for Prosperity.(Photo: handout, handout)
A number of Democratic legislators voted against the bills, but for much different reasons. Some Democrats overwhelmingly felt that the budget resolution and the farm bill conference report didn't spend enough.
Worse, a disappointing number of Republican legislators cast a "yes" vote for both the Ryan-Murray budget deal and the farm bill conference report, signaling their support of higher federal spending. Remember: This is the party that claims to support controlling spending and limiting the size of government.
Meanwhile, the fuse continues to burn on America's bankruptcy bomb.
Americans for Prosperity is committed to defusing that bomb and securing a bright fiscal future for our children and grandchildren.
Tom Jenney is director of Americans for Prosperity's Arizona chapter. Christine Harbin Hanson is federal issues campaign manager for Americans for Prosperity. More information: www.americansforprosperity.org.
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