Should members of the LSU Board of Supervisors disclose who receives their scholarships?|
Story Archives: Cold reality of it all
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|Cold reality of it all|
It is encouraging to witness so many Louisianians express concern for the state's fiscal problems, especially as they relate to pending cuts in funding to higher education and health care.
In time, we'll learn how bad off state government is on the financial front. To put it more bluntly, in about seven months—or toward the end of the 2011 regular legislative session—we'll have a good idea how much money the state Legislature won't spend on higher ed and health care in the 2011-2012 fiscal year, which begins July 1, 2011. Until that time arrives, it's merely guess work to predict what the future holds for state government in general. Suffice it to say, tough times lie ahead, though there is a train of thought that state government needs to undergo a solid round of belt-tightening to help rein in out-of-control spending on many fronts—health care and higher ed included.
Yet, as encouraging as it may be in watching the special interests rise up over the prospect of someone's or some agency's budget being cut to the bone in light of a $1.6-billion revenue shortfall heading into the new fiscal year, how can we convince the populace to pay closer attention to the fiscal woes facing the federal government? Make no mistake, the problems the U.S. treasury faces are far more serious than the ones we're staring at here at home.
With the national economy seemingly stuck in a rut and unemployment hovering around 9.5 percent, the debate in Washington today is focused on whether to extend tax cuts the Congress first approved in 2001. Yes, as asinine as it sounds, there exists a movement among Democrats to raise taxes in the midst of the worst recession since the Great Depression of the 1930s.
Though he's sorely lacking in common sense, President Obama is no fool. He most certainly realizes that if he does not go along with members of the opposition party (Republicans) in extending the Bush-era tax cuts, the fallout from the largest tax increase in the history of the Republic would have profound implications on an already weak economy. If you think the economy is sluggish now, watch what happens if the Congress allows a more than $1 trillion tax increase over 10 years to take effect beginning Jan. 1. That's exactly what will occur if the Congress fails to act by the end of the year on extending the Bush tax cuts, which are scheduled to expire Dec. 31.
The sad irony of it all is Obama and the Dems in the Congress were banking on grabbing that more than $1 trillion in new revenues to help finance Obamacare, which the Congress approved earlier this year along party lines. Without the revenues generated courtesy of the expiration of the Bush-era tax cuts, we will witness the country's deficit skyrocket beyond the insurmountable figure in which it stands today--$13 trillion and counting.
Throughout the election season leading up to the November mid-term elections, we were privy to elaborate debates about spending and taxes, which amounted to grandstanding at its worst. So much so that many candidates were successful in convincing the electorate that doing away with the so-called practice of "ear marking" federal appropriations would solve the country's financial problems. The truth of the matter is "ear marks" account for less than 2 percent of all federal government expenditures. Guess what? That 2 percent will be spent one way or another. "Ear marking" simply allows a member of the House or Senate to specifically direct federal appropriations to a member's congressional district or state in general.
Instead of whining and complaining about "ear marks," the candidates should have leveled with the American people. In other words, the time has arrived for the American people to face the cold, hard reality that the only manner in which we can get our financial house in order is to tackle spending on entitlement programs—Social Security and Medicare. Along with spending on defense and making interest payments on the country's debt, the aforementioned entitlement programs account for roughly two-thirds of the federal budget as its stands today. Interest payments on the debt and spending on entitlements will continue to rise with inflation.
Accordingly, we have a pretty simple proposition in front us. We can either raise taxes through the ceiling to maintain the status quo or we can cut spending, and those cuts must include cuts in spending on entitlements.
That's the cold, hard reality of it all, assuming anyone is paying attention.