What Should They Do?

Prior blogs have described the deep federal debt hole we find ourselves in. It is a hole so deep that very little wiggle room is seen since 75% of our spending is locked into entitlements or the military. Obama did not help the current debt situation with his recent budget. First, he showed great timidity by delaying spending freezes until next year. Even then, his savings are analogous to finding a few coins in the sofa seat cushions while the house is in foreclosure. They do little, almost nothing, to solve our deficit and debt problems.

So what are my ideas on what should be done? Thank you for asking. As you might expect, I have an opinion. The first and most important step in gaining control over the budget is very short term limits. Huh? Yes, we will never control the budget while the Congress is looking at their next reelection. They have a habit of making budget-stupid decisions in an effort to retain their job. Solving our budget mess will require hard decisions that have never been made before in Washington. The Congress will not make those decisions unless a significant percentage will not be returning due to term limits.

I would favor a 1 term limit in this time of crisis. House members get 2 years, and senators get 6, and then they go home. Can you imagine the freedom this would give to our representatives to make decisions in the country's best interest? With a 1 term limit, the next step in budget control could occur with a reasonable chance of succeeding.

This next step is painful, but it happens many times every day in boardrooms across the country. The step is simply to meet the budget. Only the dollars that come in can go out. Every line in the budget must be inspected and a key question asked - How important is spending these dollars in comparison to other line items. The result would be a 1 to x list of budget lines in priority order. The expected revenue (taxes) is then used to see how far down the list we can afford.

In today's situation, the money would not go far. It would not cover all current entitlements and defense spending. Any"below the line" budget item could be elevated "above the line" only if savings from a funded line can be realized - robbing Peter to pay Paul. This is the discipline that is happening every day in businesses large and small across the country. Even most state governments are required to institute this discipline. It is the discipline federal officials (that can borrow or print money at will) are not able to follow.

This is the discipline that Congress must adopt, but one they will never adopt if running for reelection.