Another View -- Lou D'Allesandro and Ed Rendell: Our deficit spending must end
Unlike state and local governments, which must balance their budgets every year, the federal government has the ability to borrow massive amounts of money when its revenues and expenditures don't meet. This is good for meeting short-term gaps, but bad if the government continues to borrow year after year - each year having to borrow increasingly more in order to pay interest on the amount it has already borrowed, rather than on services that are useful for its citizens.
Unfortunately, our government has succumbed to the temptation of continuous borrowing, and this is the mess in which we find ourselves: Last year, the federal government spent $454 billion just on servicing its existing debt, which is more than it spent on housing, transportation, agriculture and education combined.
As our national debt, which now stands at more than $16 trillion (over $11 trillion of which is publicly held), continues to mount, this disparity between what we have to pay to avoid defaulting on our debt and what we are spending on programs that help American citizens continues to grow. This puts a further squeeze on our budget and makes it progressively more difficult to return to balance without making serious adjustments that would either hurt our most vulnerable citizens, our economy, or both.
Our leaders in Washington set a deadline for themselves to come up with a plan for dealing with our long-term debt: the so-called "fiscal cliff" the country is headed over on Jan. 1. If we go off the cliff, we will face a series of across-the-board spending cuts and tax increases that will hurt everyone, not just the top 2 percent we keep hearing so much about. The sudden tax increases will be particularly damaging to small businesses, for whom policy and economic stability is vital to their ability to plan ahead and to grow.
And the sudden spending cuts include programs that are vital to our most vulnerable, including education, public housing and nutrition programs for low-income women and children. In New Hampshire, 6.8 percent of state revenues come from federal grants that would be subject to these cuts, according to the Pew Center on the States. This is money already budgeted for programs for 2013.
To avoid the fiscal cliff, our leaders must come up with a plan that puts us back on solid ground moving forward. This plan must include revenue increases through reform of our tax code, smart savings in spending and reform of our entitlement plans to ensure that they remain solid for the people who need them most. Importantly, this plan must be put in place now but enacted gradually, in order to avoid the kind of sudden shocks to the economy and to vital programs that are prescribed in the fiscal cliff.
As the countdown to Jan. 1 continues to shrink, we have been happy to see evidence that Congress and the President are coming closer to a deal to avoid the cliff. However, in order to truly deal with the problem rather than just kick it down the road for the next generation to face, the deal our leaders come up with must not simply be the smallest deal that both sides can agree to, but a solution that puts America back on a sustainable path, stabilizing and eventually reducing our debt as a percentage of our economy.
The solution we need is going to take both sides truly coming together and making real changes, not just tinkering around the edges of revenue increases and spending cuts until they find the minimum both parties can stomach. By joining with devoted public servants from both parties in the Campaign to Fix the Debt, we hope to encourage our colleagues in Washington to come together and craft the big solution that this country so desperately needs. You can be part of this movement by calling your senators, representatives and the President, and letting them know that we need a solution, not an excuse. The futures of generations of Americans to come depend on it.
Lou D'Allesandro is a Democratic state senator from Manchester. Ed Rendell is a former Democratic governor of Pennsylvania.