Although the federal government has avoided a shutdown of all non-essential functions, concerns still remain about the federal budget and what this will mean for the 2012 fiscal year.
On Thursday, April 14, the House of Representatives voted 260 to 167 in favor of cutting President Barack Obama’s proposed 2011 budget by $38 billion. Government agencies had been operating on continuing resolutions (CRs), or legislation allowing them to continue to operate at their 2010 funding levels, since Oct. 1, 2010, when the budget first failed to pass.
“It represents a failure of our government to perform one of its most basic functions, which I find embarrassing,” sophomore Anna Novikova said.
Such controversy over the budget, however, is not uncommon, according to Assistant Professor of Political Science Andrew Civettini.
“It’s not unusual for there to be a failure to agree on the budget,” he said. “It has happened before where [Congress] did use continuing resolutions for the rest of the fiscal year.”
While the level of government spending and the concurrently rising federal deficit are worrisome to many, Civettini does not think spending cuts alone are enough to balance the budget.
“We are so far from anything like fiscal responsibility that it’s impossible to conceive of any quick fix,” he said. “Even if we eliminated all discretionary spending—that means no Department of Education, no Department of Transportation, no Department of Defense—we would still be in the red.”
The largest contributors to the deficit, according to Civettini, are Medicare Part D, which subsidizes the cost of prescription drugs for Medicare beneficiaries, and tax cuts for the wealthiest Americans, passed by former President George W. Bush and extended by Obama.
“By the end of the decade, Medicare Part D will cost between $2 and $3 trillion per year,” Civettini said. “That’s more than the federal budget in any year prior to 1998. That’s astounding.”
Junior Karl Bair agreed with Civettini’s assessment of Medicare and suggested that it and other entitlement programs be cut entirely in order to balance the budget.
“This should result in a drastic cutting of the tax rate because people will no longer be receiving benefits and therefore need to have more money for themselves,” he said. “The problem … is that people who have paid into [Medicare] for years would get the short end of the stick.”
Almost immediately after the passage of the 2011 budget, Congress began to address these issues in a lively debate on the budget for the 2012 fiscal year, which will take effect on Oct. 1, 2011 if passed.
“It is difficult to talk about the next step when [Congress] can’t even take the first step,” Bair said, expressing discontent with the level of cuts made to the 2011 budget.
In Novikova’s mind, the focus should be on rolling back the Bush tax cuts and bringing in more revenue.
“The Republicans want to balance the budget on the backs of the poor, the elderly and the disabled,” she said. “That’s not what America is about.”
Bair disagrees, suggesting that cutting corporate and other tax rates will drastically reduce the size of costly social programs.
“If the government cut these and other tax rates … fewer people would need these handouts to begin with and the government would have more money with which to fund social programs if that’s what they chose to do with it,” he said.
However the budget debate plays out, some level of compromise will have to occur between Democrats and Republicans. Civettini also pointed to the need for transparency and honesty in the budgeting process, noting that bureaucrats in the Office of Budget Management often tailor their advice depending upon the President’s party affiliation.
“There is not a focus on fiscal responsibility,” he said. “It’s not one actor’s fault or one party’s fault. It’s an issue of hiding the real costs.”