Cut Wasteful Spending
April 25, 2003
There are two causes for deficits and only two: not enough revenue or too much spending. The U.S. government ought to be able to live within our means when it is getting a projected $27.9 trillion over the next decade, says columnist Cal Thomas.
The problem is spending. Tax cuts, on the other hand, would stimulate the economy by creating more jobs, which would then provide more revenue to the government from more taxpayers.
Heritage Foundation fellow Brian Riedl has suggested $350 billion in spending-reductions over 10 years that would offset more than half of the president's original $726 billion tax cut plan. The federal government is projected to collect $27.9 trillion in taxes over 10 years and if Congress agreed to the full $726 billion tax cut, the government would still rake in $27.2 trillion.
Among Riedl's proposals:
- If federal spending could be eliminated on things for which U.S. Treasury auditors cannot even account, taxpayers would save more than $17.1 billion in 2004 and $171 billion by 2013.
- Fixing errors in the Medicare payment system would save $12.1 billion next year and $121 billion by 2013.
- Repairing errors in housing payments would save $3.3 billion in 2004 and $33 billion by 2013.
Over time, the tax cut would not produce a static loss in revenue because the stimulation to the economy that comes from more jobs and an injection of more capital through consumer spending would offset a portion of it.
Source: Cal Thomas, "Back to the Economy (Stupid!)," Townhall.com; Brian Riedl, "A Modest Proposal: How to Offset More than Half of the President's Tax Cut," WebMemo No. 254, April 9, 2003, Heritage Foundation.
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