Both parties need to sacrifice to reduce national debt

We must pass the debt limit and move on quickly to begin the hard work of reducing the towering U.S. debt.

To do that, everyone involved should make a commitment to “fact-based” decision-making and take a hard look at the history of our national debt and how we reversed its growth in the recent past.

For the last 50 years, outside of a $3.2 billion surplus in 1969, the only period the U.S. had a budget surplus was in the late 1990s. Many had given up hope that we would ever balance the budget again, and then, in 1999, the federal budget was balanced, and the U.S. government started running a surplus.

The surpluses ended in 2001, when the administration cut taxes without spending offsets and argued against surpluses, saying the money should be “put back in the pocket of the American taxpayer.”

The result was that we returned to annual deficits and a “borrow-and-spend” philosophy.

In addition, we allowed the spending caps using the esoteric but effective pay-as-you-go system to lapse. These rules said all budget proposals had to be deficit-neutral; proposed spending increases or tax cuts had to be paired with spending decreases or revenue increases.

Two wars were fought for the first time in U.S. history without increasing taxes and were paid for with borrowed money.

The Medicare prescription drug program was enacted and paid for by borrowing. The Obama administration came in and, for the most part, did not alter the previous administration’s programs increasing the debt.

Finally, the financial meltdown slashed federal revenues.

The result is an unmanageable $14 trillion in debt.

How did we achieve budget surpluses in the late 1990s?

It started with a politically courageous act by President George H.W. Bush. In his presidential nomination acceptance speech at the 1988 Republican convention, he spoke the words, “read my lips, no new taxes.”

By 1990, he saw that the only way to balance the budget and decrease the national debt was to reach an agreement with the Democratically controlled Congress.

The president determined that to be successful, all areas of the budget had to be on the table. He convened a behind-closed-doors, no-precondition negotiation.

The result was the Budget Enforcement Act of 1990. In it, Bush broke his pledge and agreed to increase taxes in exchange for the Democratic Congress’ support of PAYGO rules.

Many believe that when President Bush agreed to increase taxes and broke his pledge, he created an opening for Patrick Buchanan to compete in the primary against him, which led to his loss to Bill Clinton in the election.

President Bush’s experience sent a clear message to Republican elected officials that while most in their party advocate debt reduction, endorsing tax increases is not acceptable.

The second courageous political act was made by President Clinton. In his State of the Union address in 1993, he announced his intention to increase taxes.

The resulting legislation was characterized by many as the largest tax increase in history.

On the day it passed, the Republican leadership in the House and Senate forecast it would increase interest rates, kill jobs and cause a recession. Instead, it led to prosperity, jobs, record stock markets and budget surpluses.

It also led to the Democrats losing both houses of Congress in the 1994 midterm elections.

The principle of attacking all segments of the budget was at the heart of the recent plan developed by the National Commission on Fiscal Responsibility and Reform headed by Democrat Erskine Bowles and former Republican Sen. Alan Simpson.

The commission’s report was approved by 11 of its 18 members, including three Republican and three Democratic incumbent members of Congress.

Now is the time, for those of both parties who care about bringing down the national debt, to send a clear message that there are no easy budget surpluses.

We need everyone to exhibit courage to include all parts of the federal budget in the solution and reduce the national debt.

Originally published 15 May 2011 on delawareonline.com