Don't Use Deficit Fears to Gut Defense

When Dems talk about cutting spending, they invariably target defense. Now they may find bipartisan support for those cuts from tea partiers like Rand Paul.

“What can the government do to create jobs, which is the number one issue?” asked NBC News’ Chip Reid during Obama’s post-election news conference Wednesday afternoon. Answered the president:

Well, I think this is going to be an important question for both Democrats and Republicans. You know, I think the American people absolutely are concerned about spending and deficits. And I have a deficit commission that is putting forward its ideas. It’s a bipartisan group that includes Republican and Democratic members of Congress…

Obama, I’m afraid, is right. Why, even Tea Party icon Rand Paul, fresh from his triumph in Tuesday’s Senate election in Kentucky, has been pushing the need for “deficit reduction.”

This website, FrumForum, has been a lonely voice crying out for bipartisanship and reasonable compromise across the political aisle. As a statement of principle, of course, this is wise and good public policy. America has deep and seemingly intractable problems that will require bipartisan solutions.

But here’s the problem: Any bipartisan consensus on “deficit reduction” is seriously misplaced and might well stymie and inhibit economic growth. Yet without economic growth -- robust economic growth of at least three to four percent annually -- there’s absolutely no way we ever can address our long-term financial woes.

Moreover, the only thing that Democrats seem to want to cut is the defense budget. And unfortunately, Tea Partiers like Rand Paul are all too willing to reach across the political aisle to gut defense. In fact, defense seems to be the only type of spending that Rand has suggested he would cut.

This after Obama and the Dems -- aided and abetted, notably, by Senators John McCain and Lindsey Graham -- already have cut an estimated $330 billion (!) from the defense budget. Among the casualties: the Army’s only Top 10 weapon systems modernization program, Future Combat Systems, and the Air Force’s C-17 jet transport.

But the real problem with the federal budget is not defense spending; it is entitlements: Social Security, Medicare, Medicaid, and now “comprehensive national healthcare reform.”

Indeed, entitlements are ticking financial time bombs which are fast consuming the federal budget and seriously undermining economic growth. And simply balancing the books -- through, say, tax hikes -- to ensure “deficit reduction” does nothing necessarily to reduce the economic burden of these behemoth social-welfare programs.

Especially today, when capital and labor are mobile, the United States literally cannot afford higher rates of taxation that might inhibit more robust economic growth.

In fact, as Mitt Romney observed in Wednesday’s Washington Post,

With entitlement spending about half of all federal spending, the president has no choice but to address Social Security, Medicare, and Medicaid… Regardless of the reforms chosen, the entitlements budget should be subject to…a [predetermined cap]…

Decide from the outset the amount that the government will spend for the year. Don’t add up all the program requirements, departmental requests and political wish lists to calculate the total -- that’s surrendering, not budgeting.

Romney wisely notes that “the nation’s 50-year average annual tax burden has been 18 percent of [the Gross Domestic Product, or] GDP.” If the Bush tax cuts are fully extended, he writes, the tax burden will still be “18.4 percent of GDP in 2020 -- higher than the historic tax average.

“Lower taxes,” he adds, “will propel growth, add jobs and produce a larger GDP that can accommodate our spending priorities.”

Romney also is smart enough to know that we can’t balance the budget on the backs of our troops. “Don’t push defense [spending] below four percent of GDP,” he warns. “With today’s global threats and allies’ diminishing military capabilities, freedom will increasingly depend on American strength.”

That’s exactly right. As Jack Kemp memorably put it during another period of economic decline and national malaise, “Austerity is not the answer; austerity is the problem.” And, the corollary of that is: “deficit reduction is not the answer; deficit reduction, in fact, may well be the problem.”

John Guardiano blogs at strong>www.ResoluteCon.Com<, and you can follow him on Twitter: strong>@JohnRGuardiano<.