News / USA

'Do Nothing' Option for US Deficit Reduction Explored

If Congress went on vacation for the next two years, automatic federal revenues would rise, trimming spending
If Congress went on vacation for the next two years, automatic federal revenues would rise, trimming spending

Hopes were dashed this week for bold congressional action to slow the growth of America’s $15 trillion national debt. A special bipartisan committee failed to agree on ways to trim the deficit by $1.2 trillion. But if Congress has shown itself incapable of boldly addressing the U.S. fiscal woes, consider this: current law, if unchanged, would slash deficits by as much as $7 trillion over 10 years.

For those yearning to see a dramatic reduction in the federal deficit, there is something astonishingly easy Congress could do.

Absolutely nothing. If Congress went on vacation for the next two years, much would happen automatically to significantly raise federal revenues and trim spending. An array of temporary tax cuts would expire, new taxes would be collected, and automatic cuts to domestic and national defense spending would go into effect. There would be additional savings in U.S. debt-servicing costs.

All of these measures are written into current U.S. law. If those laws hold, the Congressional Budget Office estimates the annual budget deficit would fall from $1.3 trillion this year to the $500 billion range for most of the next decade - a 60 percent improvement.

Some in Congress have already seized on this data. Democratic Representative Peter DeFazio of Oregon highlights one component: tax cuts enacted under President George W. Bush slated to expire next year. “If Congress continued to do nothing, then all the Bush tax cuts go away, $4 trillion of additional revenues. That would take care of 40 percent of the deficit problem over the next 10 years. If they [lawmakers] are really concerned about debt reduction, the ‘do-nothing’ option is the best,” he said.

Independent budget-watchers say the math is correct: doing nothing would significantly improve U.S. finances.  Jason Peuquet of the non-partisan Committee for a Responsible Federal Budget. “If Congress just went home over the next several years, then our debt path is not nearly as bad,” he stated.

But there is a catch.

“It is really not realistic that Congress just goes home and does not extend the tax cuts, at least part of them,” Peuquet noted.

Republicans say higher taxes would deal a damaging blow to a shaky U.S. economy, resulting in slower growth that could reduce government revenue. Senator Jon Kyl of Arizona. “Especially in an economic downturn, like we are in now, it is not a good idea to raise people’s taxes,” he stated.

Even President Barack Obama has said only the wealthiest Americans should see their taxes go up, and only after the U.S. economy fully recovers. Days ago, Mr. Obama urged Congress to extend and expand a temporary cut in workers’ contribution to the federal retirement income program, Social Security.

Because so much of what would transpire under current law involves added taxation, the "do-nothing" option appeals most to progressive Democrats eager to avoid the major spending cuts that Republicans advocate. Indeed, all Democrats would have to do to enforce a "hands-off" approach to deficit reduction would be to block all budget-related legislation in the Senate, where they retain a majority. But many Democrats are also wary of massive tax hikes.

“I think that is not a balanced approach,” Democratic Senator Ben Cardin of Maryland said.

“That is obviously leverage to get to where we need to get to. I am for a full balanced approach that brings down spending and allows the revenues to be adequate to pay for our bills,” Cardin explained.

Note Senator Cardin’s use of the word “leverage” - meaning Democrats could threaten to block tax cut extensions to pressure Republicans to compromise on a so-called grand bargain of spending cuts and tax hikes. His message foreshadows what could be a furious budget battle next year, when the United States holds general elections.

You May Like

Turbulent Transition Imperils Tunisia’s Arab Spring Gains

Critics say new anti-terrorism laws worsen Tunisia's situation while others put faith in country’s vibrant civil organizations, women’s movement More

Burundi’s Political Crisis May Become Humanitarian One

United Nations aid agencies issue warning as deadly violence sends tens of thousands fleeing More

Yemenis Adjust to Life Under Houthi Rule

Locals want warring parties to strike deal to stop bloodletting before deciding how country is governed More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Texas Town Residents Told to 'Just Leave' Ahead of Flood Threati
X
Greg Flakus
May 29, 2015 11:24 PM
Water from heavy rain in eastern and central Texas is now swelling rivers that flow into the Gulf of Mexico, threatening towns along their banks. VOA’s Greg Flakus visited the town of Wharton, southwest of Houston, where the Colorado River is close to cresting.
Video

Video Texas Town Residents Told to 'Just Leave' Ahead of Flood Threat

Water from heavy rain in eastern and central Texas is now swelling rivers that flow into the Gulf of Mexico, threatening towns along their banks. VOA’s Greg Flakus visited the town of Wharton, southwest of Houston, where the Colorado River is close to cresting.
Video

Video New York's One World Trade Center Observatory Opens to Public

From New Jersey to Long Island, from Northern suburbs to the Atlantic Ocean, with all of New York City in-between.  That view became available to the public Friday as the One World Trade Center Observatory opened in New York -- atop the replacement for the buildings destroyed in the September 11, 2001, attacks.  VOA’s Bernard Shusman reports.
Video

Video Seoul Sponsors Korean Unification Fair

With inter-Korean relations deteriorating over the North’s nuclear program, past military provocations and human rights abuses, many Koreans still hold out hope for eventual peaceful re-unification. VOA’s Brian Padden visited a “unification fair” held this week in Seoul, where border communities promoted the benefits of increased cooperation.
Video

Video Purple Door Coffeeshop: Changing Lives One Cup at a Time

For a quarter of his life, Kevin Persons lived on the street. Today, he is working behind the counter of an espresso bar, serving coffee and working to transition off the streets and into a home. Paul Vargas reports for VOA.
Video

Video Modular Robot Getting Closer to Reality

A robot being developed at Carnegie Mellon University has evolved into a multi-legged modular mechanical snake, able to move over rugged surfaces and explore the surroundings. Scientists say such machines could someday help in search and rescue operations. VOA’s George Putic reports.
Video

Video Shanghai Hosts Big Consumer Electronics Show

Electronic gadgets are a huge success in China, judging by the first Asian Consumer Electronics Show, held this week in Shanghai. Over the course of two days, more than 20,000 visitors watched, tested and played with useful and some less-useful electronic devices exhibited by about 200 manufacturers. VOA’s George Putic has more.
Video

Video Forced to Return Home, Afghan Refugees Face Increased Hardship

Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Britain Makes Controversial Move to Crack Down on Extremism

Britain is moving to tighten controls on extremist rhetoric, even when it does not incite violence or hatred -- a move that some are concerned might unduly restrict basic freedoms. It is an issue many countries are grappling with as extremist groups gain power in the Middle East, fueled in part by donations and fighters from the West. VOA’s Al Pessin reports from London.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video Al-Shabab Recruitment Drive Still on In Kenya

The al-Shabab militants that have long battled for control of Somalia also have recruited thousands of young people in Kenya, leaving many families disconsolate. Mohammed Yusuf recently visited the Kenyan town of Isiolo, and met with relatives of those recruited, as well as a many who have helped with the recruiting.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.

VOA Blogs