Washington suffers from fiscal insanity

It’s been said that the definition of insanity is doing the same thing over and over and expecting a different result. This sums up Washington’s continued fiscal negotiations. 

The latest fiscal compromise is being touted by many as a deal that prevented the United States from falling off the “fiscal cliff.” But what did it really prevent? Middle- and lower-income Americans were promised that their taxes would not be raised. However, the compromise has raised taxes on 77 percent of Americans, and it will increase a middle-income workers’ tax burden by an astonishing $1,250 annually during a struggling economy. Many working families that work for or own small businesses will see their taxes and healthcare costs increase. But the worst part of the deal is that it’s not over. We will have to endure another negotiation in less than two months.

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The fact is that beyond raising taxes on workers, manufacturers and families, President Obama and Congress have done nothing to change our fiscal trajectory. We continue on a path of unmanageable deficits and severe debt. We have once again reached our debt ceiling, and lawmakers have about two months before the government runs out of cash. 

Moreover, it’s bad math and policy to think cuts to defense spending is the answer for any long-term fiscal solution. Sequestration alone collects $492 billion of savings from cuts. Even though defense represents less than 17 percent of total spending, 50 percent of sequestration’s spending cuts are set to come from defense. Meanwhile, more than two-thirds of entitlement spending — which consumes more than 60 percent of total spending — is shielded from the cuts. Social Security and Medicaid are fully exempt, as is all but 2 percent of Medicare spending. Combine this with the fact that these entitlement obligations are projected to cost $48 trillion in the long term, how can Democrats honestly say they are doing what it takes to make us fiscally solvent? 

As the president and Congress begin negotiations to avoid our next cliff, a bold four-step plan is necessary to restore our fiscal sanity. 

First, it is imperative that the bipartisan No Budget, No Pay Act be a part of any deal. It is simple. If Congress cannot perform its constitutional obligation in a timely fashion, lawmakers should not get paid. This is structural reform people can understand.

Second, any deal must also include a balanced-budget amendment to the Constitution and votes in both houses of Congress. Ultimately capping federal spending at 18 percent of gross domestic product is a reasonable approach to help bring our fiscal house back to order. The primary reason that governors and state legislatures pass balanced budgets is that they are required to do so. This is essential structural reform that will stop the bleeding and move us back on a path to fiscal health.

Third, we should also commit to immediately cutting non-defense spending by at least 10 percent to show creditors and the world that we are serious about restoring our fiscal solvency. Families and non-government employers frequently have to adjust their budgets to fiscal realities. Only the federal government believes that one can spend more than one has without a cost. 

Fourth, we must modernize our federal entitlement programs, including Medicare and Social Security, to meet the needs of current and future beneficiaries, and reduce the financial burden on our children. In many ways our entitlement programs have been successful at protecting millions of Americans from a life of poverty. Instead of expanding entitlement programs like Medicaid and food stamps, we need to block grant them to the states to spur innovation, provide better services for those in need, and attain fiscal accountability as we did in a bipartisan way in welfare reform. 

Doing nothing is an unacceptable option. We are borrowing four out of every 10 dollars we spend. If we wait to act, the only solutions will be drastically higher taxes, massive new borrowing and severe cuts in benefits or other programs. Doing nothing threatens our financial security and is a choice to limit opportunity for struggling families and future generations. It’s time to end the insanity and damage to our families’ security and opportunity. It’s time for leadership that earns its pay in Washington.

Santorum is a former Republican senator from Pennsylvania and was a Republican presidential candidate in 2012.