Cut Spending to Cut the Debt

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In Heritage Work

As lawmakers debate the $1.1 trillion business-as-usual “Cromnibus” spending bill, we should reexamine how the federal government spends your money.

The solution is simple: Congress should cut spending to rein in the runaway federal debt, according to a new Heritage Foundation report.

That’s because spending growth is the real driver of future deficits. Spending, especially spending on health care and Social Security,  is expected to grow by 66 percent over the next decade.

Heritage Foundation experts recommend:

Lawmakers should eliminate waste, duplication, and inappropriate spending; privatize functions better left to the private sector; and leave areas best managed on a more local level to states and localities. Most important, Congress should reform the entitlement programs so that they become more affordable and benefit those with the greatest need.

What would you cut from the federal budget?

3 Steps the New Congress Can Take to Control Debt

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In Heritage Impact

Congress should cut spending and rein in the national debt, Heritage Foundation economist Romina Boccia argues in The Hill.

Boccia has three suggestions for the incoming Congress:

  1. Reform the big three entitlement programs – Medicare, Medicaid and Social Security. Reform should be focused on helping those who are truly in need and discouraging dependence on the government. If nothing is done, 85 percent of spending increases will come from these three programs alone.
  2. Cut duplicative, wasteful government spending and spending that’s outside of federal authority. Boccia suggests an independent commission charged with finding ways to whittle away at waste and cut back on spending that exceeds the proper scope of the federal government.
  3. Control spending with firm caps. “Spending caps that limit spending growth to the rate of inflation encourage Congress and federal agencies to operate more efficiently and prioritize spending in the public interest,” she explains.

What spending would you cut first? Tell us in the comments.

Six Steps to Eliminate Government Waste and Control Government Spending

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In Heritage Work

“Eliminating waste and controlling government spending is best accomplished by reducing the size and scope of government,” Heritage Foundation economist Romina Boccia argues in a new report.

She explains:

The federal government does too many things that would be done better by individuals and organizations in the private sector, or by state and local governments, or that should not be done at all. A smaller, more limited federal government would focus on providing essential public services, legal services, and a basic social safety net, and would otherwise leave individuals free to determine their own affairs to the maximum extent possible in the defense of liberty.

Congress should take the following six steps to reduce the size and scope of the federal government, Boccia writes: Continue Reading »

College Loan Forgiveness Is Not the Answer to High Student Loan Debt

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In Heritage Work

College loan debt is at an all-time high. To address this problem, President Obama recently used executive action to extend income-based loan repayment options to millions more students. The program caps monthly payments and completely forgives student loans after as little as 10 years.

Sounds great, right? Not so fast. Loans have to be repaid by someone. And that someone is you.

Heritage Foundation education expert Lindsey Burke explains: Continue Reading »

Video: What’s Really in President Obama’s 2015 Budget

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In Heritage Impact

Heritage’s Romina Boccia previews the new taxes and spending in President Obama’s forthcoming 2015 budget plan on Fox Business:

“This president has presided over the largest peacetime deficits in U.S. history,” Boccia told Gerri Willis. And based on early reports, the new budget would pile on more spending and debt while imposing new taxes.

Do you think the budget should increase taxes and spending?

The Deficit News Isn’t All Good News

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In Heritage Work

The media has been trumpeting reports that Uncle Sam will only spend $500 billion more than it takes in this year.

While it’s good news that we’re adding less to the debt than in past years, Heritage’s Steve Moore writes, the long-term picture has actually grown worse:

But what hasn’t been advertised is the disgraceful longer-term outlook for our fiscal future, which took a turn for the worse. And Obamacare is the main culprit. In the long run, the budget deficit will be slightly more than $1.5 trillion WORSE than previously estimated.

Heritage has a detailed plan to cut spending and rein in the debt. Read the whole thing.

Do you think we can ever get spending under control?

Should the Feds Bail Out Detroit?

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In Heritage Work

Jeremiah Robinson/ZUMA Press/Newscom

Detroit’s decades-long decline has accelerated of late. Over the last four years, the city has lost over a fifth of its population, and its manufacturing base has continued to erode. What was the city’s response to this? It shifted city resources from the private sector to the public sector, raised taxes, and increased regulations.

And last week, Detroit became the biggest American city to file for Chapter 9 bankruptcy. The Heritage Foundation’s Alison Acosta Fraser and Rachel Greszler point out:

Detroit’s tragic downward cycle has reached its end. With all tax rates close to their statutory max and dismal public services that discourage individuals and businesses from remaining in or coming to Detroit, the city simply cannot continue to fund its operations and service its debt.

Detroit will undoubtedly seek help from the federal government. This must be resisted, Fraser and Greszler argue: Continue Reading »

You Won’t Believe How Much Debt the Government Added in Just Four Months

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In Heritage Work

Debt Grew by $300 Billion Since Debt Limit Was Suspended

“On May 19, the United States hit its debt ceiling after adding $300 billion in more debt since lawmakers suspended the ceiling in February,” Heritage’s Romina Boccia reports.

That’s $300 billion in new debt in less than four months.

Hitting the limit, she says, is part of an ongoing pattern: Continue Reading »

The Problem Isn’t China Buying U.S. Debt—The Problem Is the Debt Itself

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In Heritage Work

Photo: Newscom

There’s a lot of talk in the media about China “owning America” because they buy up so much of our government’s debt. This borrowing from China is often presented as an economic problem.

But Heritage expert Derek Scissors says these claims are overstated:

China has fallen behind Japan as the largest foreign holder of U.S. securities. The Department of the Treasury’s new numbers are good only through June 30, 2012, but it puts Japan at $1.84 trillion and China at $1.59 trillion.

There are lots of things to say about this, but one stands out: The loose talk about China “owning” America never made any sense and perhaps now can finally end.

In fact, he says, our problem isn’t China buying our debt but rather our own elected officials who create that debt in the first place: Continue Reading »

If Congress Doesn’t Cut the Debt, Get Used to Low Growth

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In Heritage Work

Photo credit: Newscom

Amidst our other economic woes, another looms: stagnant growth resulting from our government’s high debt. As more and more debt accumulates, private investment is crowded out, leading to weaker growth.

When debt reaches 90 percent of GDP, economies experience significant growth problems. Heritage Foundation economist Salim Furth explains: Continue Reading »

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