And now the hard work begins.With the 2011 budget in the rearview mirror, Congress has to get serious about a 2012 budget and the debt ceiling. And, the conversation couldn't start a minute too soon.The country is on an unsustainable path of spending more and more and more. According to the Wall Street Journal, domestic discretionary spending grew by 6% in 2008, 11% in 2009 and 14% in 2010.Thanks to the work of Congress the 2011 budget spending shrinks by 4%.
President Obama's plan for the 2012 budget will include tax hikes for the wealthy -- a retread of the debate we had last fall about the extension of the bush tax cuts. But at this point, everyone knows that the idea of upper-income Americans paying their fair share is simply a misnomer.Already, the wealthiest Americans -- those earning $140,000 and higher -- pay 60% of the income taxes in this country. What's more, nearly half of Americans pay no income taxes at all.Fair? I don't think so.
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Of course, it's clear it's the entitlement programs that need the biggest haircut. And, Obama has already mentioned he would like these programs downsized as well.The question is by how much? Congressman Paul Ryan's plan would essentially privatize Medicare -- giving consumers vouchers to pay insurance premiums to insurers pre-approved by the government.
The congressional budget office says under Ryan's budget, government spending on health care would be reduced from 14% of GDP to 5% by 2050.Will Obama's plan go as far? We'll have to wait and see.All of these decisions need to be made before May 16, when we will exceed our borrowing limit and likely set in motion a series of events that could jeopardize our triple a credit rating.The good news is that we didn't stop the government because of a debate over $7 billion in spending.But there is more work to do.
We need spending limits that force congress to do the right thing and a revision of the budget baseline so that each year's budget begins at last year's spending levels, not with automatic increases.Why do we care? Because the total indebtedness of this country keeps climbing -- at $14.2 trillion right now, or $46,000 per citizen.Budget discipline isn't a Republican or a Democratic issue; it's a common sense issue. American families know how to keep their budgets under control, it's time the government did too.
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