Ask a family or a business about their budget and they will say that the goal of a budget is to balance income with expenditures in an organized and disciplined way. The emphasis on balanced, organized and disciplined in budgeting is essential and yet the federal budget has consistently run deficits since 2001. In fact, the last completely balanced federal budget occured in 1835 under President Andrew Jackson.
The history of federal budgeting reflects the economic conditions during those periods. During the 1920s, there were 10 surplus budgets that because of the country’s booming economy. The 1930s and 1940s were marked by several deficits caused first by the Great Depression and then by World War II. During the 1970s and 1980s there were 12 straight deficits that marked the economy’s volatility, followed during the 1990s by four years of surpluses in the budget between 1998 and 2001.
Since 2001, federal budgets have continuously risen in deficit spending to the point that the national debt exceeds $14 trillion. While Congress and the current administration both recognize that the debt must be reined in, there is serious partisan debate over how to go about accomplishing the task – increase revenue (taxes) versus reduce expenditures (programs). The reality may be that both may be needed.
The first comprehensive proposal to tackle the deficit written by the National Commission on Fiscal Responsibility and Reform, or Bowles-Simpson Commission, and released in December 2010. The report makes it clear that every budget item must be “on the table” and considered.
Congress must act and become disciplined and courageous stewards of the country’s economic future to find the best solutions for America.