- The Washington Times - Thursday, April 29, 2010


President Obama kicked off the first meeting of the National Commission on Fiscal Responsibility and Reform Tuesday by emphasizing - with a straight face - his purported commitment to solving what he called a fiscal crisis. “We’ve been scouring the budget, line by line, identifying more than $20 billion in savings this year alone,” the president boasted. Don’t be fooled by the fairy tale of “Obama the budget-cutter.”

While $20 billion is no small sum, it represents just four days’ worth of fiscal responsibility during an entire of year of profligacy. President George W. Bush, hardly a budget hawk, increased the debt an average of $1.7 billion each day of his eight years in office. Since taking control last year, Mr. Obama has more than doubled this amount, spending $4.9 billion beyond the government’s means every single day. In fact, by the time you finish reading this editorial, the national debt will have grown by $6.8 million.

With every idea on the table, legitimate concern over rising debt levels is now being used as an excuse to import yet another bad idea from the welfare states of Europe. In the Old World, a value-added tax (VAT) on goods and services helps cover the spiraling cost of nationalized health care and other cradle-to-grave entitlements. In England, for example, the VAT boosts the amount of revenue collected in income taxes by about half. Because the VAT is collected on a transaction-by-transaction basis at the retail level, consumers rarely see the full impact of the tax on their household budget. The remote nature of collection eases the political cost of increasing the rate, making it attractive to big-government politicians. Since its 1973 introduction, the British VAT rate grew from 10 percent to 17.5 percent.

It’s unclear whether Americans would ever embrace the concept. On Tax Day, Sen. John McCain, Arizona Republican, introduced a nonbinding resolution that called the VAT “a massive tax increase that will cripple families on fixed income and only further push back America’s economic recovery.” Interestingly for voters in the Old Dominion, Sen. Jim Webb, Virginia Democrat, was one of only 13 to reject Mr. McCain’s amendment and embrace the VAT. Sen. Mark Warner, another Virginia Democrat, skipped the vote.

While the 85-13 Senate vote against the VAT was encouraging, Mr. Obama has demonstrated his administration’s ability to ram unpopular legislation through Congress after declaring a “crisis.” Congress needs to maintain a principled stand against the VAT. State and federal governments already collect far too great a share of America’s productive output. America does not face a debt crisis in a vacuum; the root cause of our fiscal trouble is a spending crisis. Fiscal sanity will not return unless the true cause of debt is addressed: Runaway spending and entitlements.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide