Haven't been paying attention this election season? Here's everything you need to know in brief (Video: Jon Groat)
If you've been reading the Gaggle today—and who hasn't!—you already know that Mike Lee, the Tea Party–backed Senate hopeful from Utah, told a crowd of supporters last week that congressional Republicans want to slash federal spending by 40 percent next year without cutting the sacred cows of Social Security and defense.
Tea Party candidates love to talk about fiscal austerity. They say that President Obama has been on a dangerous spending binge, and that only they have the fortitude and courage to stop him. But they rarely get specific about how, exactly, they intend to balance the budget. Thankfully, Lee now has. The only problem? His specifics are bonkers.
The numbers speak for themselves. President Obama's proposed budget for fiscal year 2011—which Congress has yet to approve—totals $3.83 trillion and allows for a deficit of $1.267 trillion. To balance the budget exclusively by cutting spending, as opposed to raising revenue, Congress would have to trim federal outlays by 33 percent overall, to $2.563 trillion.
That alone sounds extreme; in Britain, David Cameron's proposed cuts of 20 percent are expected to cost the country an estimated 500,000 jobs. But Lee's plan goes way, way further. Instead of simply slashing spending, Lee and compadres want to a) extend the Bush tax cuts for everyone earning more than $250,000 a year and b) leave Social Security and defense untouched. This makes balancing the budget much more difficult.
Let's tackle the revenue side of the equation first. Under Obama's 2011 budget, the Bush tax cuts would expire for the more-than-$250,000 crowd—a move that would produce an estimated boost of up to $402 billion in revenue. By extending the Bush cuts, however, Lee & Co. would forgo that extra revenue, meaning they'd start out with $402 billion less spending money than Obama and a deficit of $1.669 trillion instead of $1.267 trillion.
Closing this bigger budget gap would require a bigger overall spending cut—44 percent, to be exact (hence Lee's estimate of "40 percent"). But here's the rub: by taking defense and Social Security off the table, Lee & Co. would be required to carve that 44 percent out of a much smaller slice of the pie, and therefore make much larger cuts to the programs that would be affected.
The math is simple—and bleak. In Obama's budget, Social Security costs $787.6 billion; defense costs $928.5 billion; debt payments cost $250.7 billion. Together they total $1.967 trillion. If you remove that $1.967 trillion from the equation, as Lee suggests, you're left with $1.863 trillion in spending to work with. At this point, balancing the budget—i.e., wringing $1.669 trillion in savings out of that last $1.863 trillion—would require slashing every government program that's not defense or Social Security (Medicare, Medicaid, veterans affairs, education, and so on) by 89.6 percent.
Tea Partiers eat it up when candidates like Lee say, "Let's shrink government by 40 percent!" But this is what he's actually proposing (even if he's now hedging under pressure). The Tea Party is right: we need to have a conversation about debt, deficits, and government spending. But it has to take place in the real world—a place where entitlement reform, defense cuts, and, yes, tax increases are all viable options—and not in fantasyland. It's simply not possible to slash enough spending to balance the budget while simultaneously cutting taxes and maintaining our current expenditures on entitlements and defense. Voters shouldn't take Mike Lee and his ilk seriously until they stop pretending otherwise.