Balancing The U.S. Budget

Most discussions on the need to balance the U.S. budget settles for staying in the comfort of abstractness, avoiding the messy details of how deficits are to be eliminated. Not so with the Senate Tea Party Caucus, who have put an actual budget proposal on the table.

The trio would curb Social Security spending by increasing the retirement age over time and indexing benefits to individual incomes. High-income earners would see slower growth in their benefits while low-income workers would see increased benefits.

The proposal would fund Medicaid, the State Children’s Health Insurance Program, food stamps and child nutrition programs through block grants.

It would cut most discretionary spending to fiscal year 2008 levels but spare national defense spending from the deep cuts mandated by the 2011 Budget Control Act.

It would freeze foreign aid spending at $5 billion a year and eliminate the departments of Commerce, Education, Housing and Urban Development and Energy and privatize the Transportation Security Administration.

It is politically unviable, of course, but they should be commended for showing how it could be done. My spontaneous reaction is that there are good ideas in there, although the marginal effects of making social security benefits more progressive need to be properly analyzed. While the proposal will never turn into policy, hopefully it will help move the debate in a useful direction.

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