US Treasury Secretary Janet Yellen has sounded the alarm: there’s less than a month to devise a new budget plan or the US could default on its debt obligations by June 1, risking an “economic and financial catastrophe.” The pressure is on President Joe Biden, House Speaker Kevin McCarthy, and Senate Majority Leader Chuck Schumer to reach a consensus.
The House of Representatives, controlled by the GOP, has pushed forward a budget bill aiming for significant spending cuts. However, Schumer has dubbed the bill a ‘nonstarter’ and declared it dead on arrival in the Senate.
McCarthy fervently argues that his proposed budget cuts are critical for addressing the federal deficit, saying, “We owe it to our children.” However, a closer look at his budget reveals an ironic twist: it may actually inflate rather than deflate government spending.
The Republicans in Congress oppose increasing the debt ceiling, citing rampant government spending. However, this justification is less than watertight. According to the Center on Budget and Policy Priorities, if McCarthy plans to keep Veterans Administration funding intact, the discretionary spending on all other domestic programs next year would need to be slashed not by 27%, but by a whopping 33%.
It’s almost fantastical to believe that such drastic cuts could be made without causing severe harm to government operations and sparking public outrage. Even more paradoxical is how McCarthy’s proposed budget could actually diminish government revenue while simultaneously increasing spending.
McCarthy’s budget proposes to retract $71 billion of the $80 billion allocated to the IRS in last year’s climate bill, a move that could cost the federal government a staggering $186 billion in uncollected tax revenue over the next decade, as per Congressional Budget Office figures. Furthermore, his budget would also decrease revenue from oil companies.
The claim that we “owe it to our children” to reduce charges for oil companies for leases on federal land and facilitate tax evasion by the wealthy is a far cry from fiscal responsibility. If anything, it seems to contradict the very spirit of budgeting: to cut costs and increase revenue, not the other way around.
As millennials striving for economic stability, social justice, and environmental sustainability, we need to be critical of such contradictions and demand genuine efforts to tackle the federal deficit without jeopardizing the future. The budgeting process shouldn’t be a political tug-of-war, but a cooperative effort towards a fiscally responsible and socially just future.
