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  • Moral Principles and the Budget Debate

    In America, it’s not hard to find religious voices criticizing proposals to cut government spending. Especially if those proposals call for reforming welfare or entitlement programs, they’re attacked for “balancing the budget on the backs of the poor.” That’s why it’s refreshing to see two prominent public voices recently engage in a more thoughtful, civil, and charitable dialogue on the federal budget.

    On April 29, House Budget Committee chairman Paul Ryan (R–WI) sent a letter to Archbishop Timothy Dolan of New York, president of the Catholic bishops’ conference, expressing his understanding that the committee’s proposed 2012 budget “is not just about numbers but about the character and common good of the American people.” In particular, Ryan described how the budget known as “The Path to Prosperity” accounts for various concerns of the Catholic Church’s social teaching regarding the poor.

    For example, Ryan noted that if the U.S. government continues to drive up the deficit through reckless spending, “the weakest will be hit three times over: by rising costs, by drastic cuts to programs they rely on, and by the collapse of individual support for charities that help the hungry, the homeless, the sick, refugees and others in need.” The failure of many European nations to address their financial crises has led to “drastic cuts in benefits to the retired, the sick, the poor, and millions of public employees.”

    In contrast, the House Committee’s budget “better targets assistance to those in need, repairs the social safety net, and fulfills the mission of health and retirement security for all Americans. The budget reforms welfare for those who need it—the poor, sick, and vulnerable; it ends welfare for those who don’t—entrenched corporations, the wealthiest Americans.”

    In response, Archbishop Dolan sent a letter to Ryan earlier last week. Dolan neither endorsed nor critiqued the policy details of the budget, but he did thank Ryan for attending to important values that the Church prioritizes. These shared values include “fiscal responsibility; sensitivity to the foundational role of the family; the primacy of the dignity of the human person and the protection of all human life; a concrete solicitude for the poor and the vulnerable…[and] a commitment to the common good.”

    These principles also inform The Heritage’s Foundation own proposal for addressing the debt crises, Saving the American Dream.

    The Archbishop rightly acknowledged that “one must always exercise prudential judgment in applying these principles.” And people of good will can disagree on how to do that. This sort of recognition has been lacking in recent statements by others, but it helps pave the way for further discussion.

    Ryan and Archbishop Dolan are right that the national budget is a moral document, and America’s financial crisis is a moral issue. As my colleagues Jennifer Marshall and JD Foster argue in a special publication entitled Indivisible, a free and thriving economy and the character of our culture are interrelated.

    America’s elected officials have a moral obligation “to address difficult basic problems before they explode into social crisis.”

    And the Church has a moral duty to articulate the principles it believes should guide moral reasoning about economic decisions. As Archbishop Dolan suggests, advocating principles like fiscal responsibility, human dignity, and the common good is an important way that the “the light of our faith.. can help illumine and guide solid American constitutional wisdom.”

    Posted in Economics [slideshow_deploy]

    4 Responses to Moral Principles and the Budget Debate

    1. George Colgrove, VA says:

      The moral issue here is who are we going to force to pay for all of this? The moral issue is that every day we forfet the fight we drive the nation up to $5 billion more into debt.

      The last year we paid off the debt was 2001. We paid the full interest the debt and paid the debt down by $128 billion due to GOP policies passed in congress in the late 1990’s.

      The Budget looked like this (in billions 2001 dollars):

      Revenue (Tax)……………………….$1,297.10

      Revenue (Social Ins)………………….$694.00

      Total Revenue……………………….$1,991.10

      100% Debt Interest Payment……….$206.20

      Debt Pay Down………………………..$127.90

      Defense (All related)………………….$366.30

      General Gov.and Dept's……………..$237.10

      Entitlements…………………………$1,053.60

      Total…………………………………..$1,991.10

      Deficit………………………………………$0.00

      Gross Public Debt………………….$5,769.90

      The two big line items are Defense and Entitlements. Defense spending shown above includes what is called today the “core” defense budget; continuing ongoing combat missions, VA costs (income security, education, training, medical care, and housing), Foreign Military and economic aid, R&D, and Atomic energy defense activities. Entitlements include Federal employee pensions, social security the “medic’s”, public health services, health R&D, welfare, unemployment, family and children assistance, workers’ comp., and housing. General government and departments include everything else that is not listed above.

      To be able to compare apples to apples, I will convert the 2001 budget into 2011 dollars:

      Revenue (Tax)…………………………$1,686.23

      Revenue (Social Ins)……………………$902.20

      Total Revenue………………………….$2,588.43

      100% Debt Interest Payment…………$268.06

      Debt Pay Down………………………….$166.27

      Defense (All related)……………………$476.19

      General Gov. / Dept's………………….$308.23

      Entitlements…………………………..$1,369.68

      Total…………………………………….$2,588.43

      Deficit…………………………………………$0.00

      Gross Public Debt $7500.87

      The FY2011 budget looks like this:

      Revenue (Tax)…………………………..$1,366.90 (down by $319.33 from 2001)

      Revenue (Social Ins)……………………..$806.80 (down by $95.40 from 2001)

      Total Revenue…………………………..$2,173.70 (down by $414.73 from 2001)

      46% Debt Interest Payment…………..$268.06 (down by $-61.36 from 2001)

      Debt Pay Down………………………………$0.00 (down by $166.27 from 2001)

      Defense (All related)…………………….$964.80 (up by $488.61 from 2001)

      General Gov. / Dept's……………………$476.60 (up by $168.37 from 2001)

      Entitlements…………………………….$2,170.80 (up by $801.12 from 2001)

      Total……………………………………….$3,818.90 (up by $1,230.47 from2001)

      Deficit……………………………………..$1,645.20 (up by $1,645.20)

      Gross Public Debt…………………….$15,476.20 (up by $7,975.33 from 2001 in 2011 dollars)

      Taxes have gone down due to several factors. Over 20 million Americans are out of work. Household incomes have seen a decrease of 23% in recent years. 13% of houses are vacant and 28% of homes are underwater. Other factors include leftwing tax credits that took millions of people off the tax rolls and even more alarming used the tax collection as a means of redistributing wealth by giving people more money than they paid from withholdings.

      The government is no longer paying the full interest on the debt so we are beginning to have a revolving debt that not only is climbing due to un-funded spending but also having interest rolled back into debt.

      In 2001, the government was paying off the debt. In every year thereafter over the last decade, the government started to add unfunded programs and unfunded staff numbering just shy of a million federal workers, at the same time they reduced taxes. The hope was that we would see the benefits from a reduced tax as Kennedy and Reagan proved in their respective tenure. However, those projections never came to fruition. Our immediate response to 9/11 did justify marginal debt spending, but we did not stop shortly thereafter as we did do directly after our very short involvement with WWI and WWII. In each of these massive conflicts, we stopped the spending and started to pay back the debt within three to four years after our initial engagement.

      The difference with Bush’s tax reduction is that they were marginal rather than being massive cuts that Kennedy and Regan made. Bush removed droves of lower income families from the tax rolls through credits. Bush’s tax reductions showed some positive effects, only they were short lived. Americans during the time of Kennedy and Reagan did not have the debt we had during the early 2000’s. Tax savings in the prior two cuts went to spending, whereas the savings in Bush’s tax cuts went to paying off debt, or at least reduced debt spending at the personal level. Did Bush’s tax cut help? YES! But did it help federal revenues? Not in the same way as earlier cuts – nor could it ever. The federal debt was already overextended at the time and when you look at the payoff rate of $435 billion that was already being removed from he economy, it is difficult to see where minimal tax reductions and Keynesian spending was going to compensate.

      For today, further tax cuts will have even lesser effect as the economic situation is far worse than 10 years ago. Raising taxes will devastate the economy. More than cuts or increases, what we need is a stable tax policy tied to reducing federal spending. What the federal government is getting in revenue (at the same tax rates) will be going down over the next few years.

      We need to return to the 2001 budget with the focus on paying the full interest on the debt and paying off the principal of the debt.

      The budget needs to look like this based on current 2011 revenue and 2001 spending:

      Revenue (Tax)…………………………$1,400.00

      Revenue (Social Ins)……………………$800.00

      Total Revenue…………………………$2,200.00

      100% Debt Interest Payment……….$450.00

      Debt Pay Down………………………….$160.00

      Defense (All related)…………………..$480.00 (No reduction – focus on priorities!)

      General Gov. / Dept's………………….$200.00 (Reductions are needed)

      Entitlements……………………………..$910.00 (Reductions are needed)

      Total………………………………………$2,200.00

      Deficit…………………………………………..$0.00

      Debt payoff today will need to be $610 billion annually (more than the 2001 DoD budget!) What happens when we need that cash? It is not there anymore. This is the demonstration of the irresponsibility of the current federal workforce! If we were to show the same responsibility the GOP had in 2001, and pay off the debt at the 2001 rate, we need to find about $200 billion more from somewhere to pay off the additional interest we are being charged. Moreover, due to the chaotic nature and irresponsibility of the current federal workforce with spending and tax policy we are short by another $400 billion in tax revenue. The federal workforce set the path since 9/11 so that we are short by $600 billion annually to operate the federal government at 2001 levels, yet alone 2008 levels. To have a balanced budget, we will need to cut $600 billion (2011 dollars) from the 2001 budget. If our debt goes “Junk” this could be much worse.

      Reduction in general government needs to occur from consolidation of like agencies and programs into single entities or through the elimination of departments, agencies and programs that can be:

      1. Move back to be state administered programs

      2. Is a commercial component which can be handled by the private sector.

      3. Is found to be outdated and no longer necessary

      4. and so on.

      Today we are overextended by over $600 billion for the remainder of 2011. Next year we will be over extended by over a trillion dollars with the HOPE that we will raise revenue by $400 billion. It is clear that all the rosy pictures we were given back in 2001 when the government thirst for increased spending never came to fruition and now we are deep in debt. We can no longer believe or count on projections provided by Ryan’s clan or any other clan for that matter regarding continuing deficit spending. We were given promises by these politicians that the federal government would get their house in order on the last increase a little over a year ago. They projected that this would be all that was necessary to get the country to where we needed it to be. None of that proved true. Now they are sheepishly asking us to trust them once again by increasing the limit another 2 trillion! Well I no longer believe any of them. A balanced budget is easy to explain and easy to show. You have revenue, and spending and they should equal. The word loan should never show up in any explanation – unless they were to say this is the amount we will use to pay it off.

      At some point we are going to need to tackle this. Today is $5 billion better than tomorrow. This month is $150 billion better than next month. This year is $1.6 trillion better than next year.

    2. Fred from Florida says:

      First off, how much one gives to and deals with the poor is an individual moral choice, so forcing others to pay money to "support" the poor is nothing more than the forcing of personal morality on others. And that is *immoral*.

      Second, government "welfare" and the like isn't charity, charity is voluntary giving that comes from a genuine desire to help. Government entitlement and welfare spending is dehumanized, indirect, cold and bureaucratic and has little to do with any principles or heart-felt desires and everything more to do with politics and quotas.

      Third, political ideology isn't religion. The second you use political means to reach a religious end then you've left the realm of religion and entered politics and you've thrown true principles out the window and replaced it with ideology. It's funny, but I don't remember the part where Christ said you should help the poor…and if you don't other people and or government should bodily force you to!

      And the idea that ending entitlements is akin to "balancing the budget on the backs of the poor" is Orwellian nonsense. The only way you can actually balance the budget on the "backs" of anyone is by taking more money from them, and no one (not even libs, at least not right now) are proposing taxing the poor. What's really happening is that the poor are getting entitlements off the backs of the middle class and the wealthy, since their wages and incomes pay for all those behemoth, ineffective and actually non benevolent entitlement programs. Using the libs logic, if your balance your own household budget by say not giving any money or less money to charity than you are balancing your own personal budget "on the backs of the poor!" It's akin to when they claim that not participating in health insurance is a form of participation in health insurance! Ending or reducing entitlements doesn't put anything on the backs on anyone, it takes the whole notion of any person or persons having to support other people involuntary and "off their backs" out of the equation. And that benefits everyone, including the poor.

      While the Archbishops and Ryans dialogue is nice, the problem is that it is based on far too many underlining false premises about the proper role of government.

    3. Bobbie says:

      It's commendable for the catholic archbishop to show his support. May more religions and men do the same. Or for that matter, may those religions or men in opposition to common sense and the common good, be so bold to come forward.

    4. R.G. Dunn, Florida says:

      Let's put spending and entitlements in perspective. Yes, there are some people who will receive money from the government, but we need to change how it is handed out. If you are unemployed and will be receiving benefits, then as a condition precedent to receiving your check, you will need to "volunteer" 5-10 hours of your time by Wednesday, to get your check on Friday. This will be commensurate with job skill and education. If your skill set qualifies you for fast food work, then you will pick up trash, clean state owned equipment, etc. If you are a skilled tradesman who is out of work, then you will donate your time to building bridges and roads, etc. If you are an out of work professional, then you will donate your time accordingly.

      You will need to volunteer time based on how long you have been recieving benefits, untill you run out of time to look for a job and are volunteering full time. Besides, this is the same as having a job! Paid to work, imagine that. If you do not have a job, then you should have plenty of time to spend constructively as to not kill the goose that lays the golden eggs. But if you do not volunteer your time, then no check. If you do a good job, then maybe you will be given a paid job. Does any of this sound familiar? Sounds like regular work to me. None of this should replace other reasonable efforts to stop fraud such as drug testing, etc.

      This same philosophy should also be applied to food stamps, welfare, and the like. If you are getting "free" money, then you will be put to work/volunteer for the tenure of receiving government money. Not only will this reduce spending by having the millions of people receiving entitlements actually working millions of hours at no extra cost to tax payers, it will provide training and work experience. Perhaps even teach some self help and work ethic. I don't think this is difficult to figure out. Either the idiots in Washington are too stupid to figure it out, or they do not care. Neither one is a good answer.

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