WASHINGTON, D.C. – As an automatic freeze on spending by the federal government looms nearer, one U.S. senator believes that over spending is not the real problem. Senator Tom Harkin (Dem-IA) said yesterday that the government does not have a spending problem, but rather that America suffers from “a misallocation of wealth.”
“Is it a spending problem?” Harkin said. “No, it’s because we have a misallocation of capital, a misallocation of wealth. All of this wealth that’s been built up by hard-working Americans has been accumulated into fewer and fewer and fewer hands all the time.”
Due to a series of last minute budgetary compromises, a set of automatic spending cuts called sequestration are set to be triggered in March. Republicans claim and more than a few Democrats admit that the cuts, which mainly target military spending, were designed to force Republicans to raise taxes by holding defense spending hostage.
Republicans have said they are prepared to allow the sequester cuts to go through, emphasizing that if Obama wants to avoid them, he should propose a specific plan with real cuts in spending and not coupled with more tax increases.
In what amounts to a high stakes game of chicken, the threatened sequester won’t do much to alleviate the nation’s debt problem. The amount of spending cuts in 2013, $44 billion, is the equivalent of approximately 4.5 days’ worth of federal spending. On average, the government will spend approximately $9.7 billion per day in 2013, meaning it would take approximately 4.5 days to spend the $44 billion cut by the sequester, according to the Congressional Budget Office.
But the opposing mindsets behind this most recent “crisis” in Washington show that this is about more than making a momentary dent in the national debt. Leaders in the House have held fast to the principle that new taxes must be accompanied by real spending cuts before they will go along with them.
“We’re weeks away from the president’s sequester and the president laid out no plan to eliminate the sequester and the harmful cuts that will come as a result of it,” House Speaker John Boehner (R-Ohio) said at a news conference on Wednesday.
Harkin criticized a U.S. tax code that he says benefits the wealthy and warned of cuts in federal spending that allegedly will hurt children, the elderly, the homeless, the disabled and even the middle class. “I tell you we’ve got to get back to a better, rationale system of revenues and spending in this country and back to our obligations,” Harkin said. “I just feel very strongly that it’s not just appropriations that are causing this problem. It’s the lack of the revenue that we should be taking in to meet our obligations as a country.”
Senator Susan Collins (Rep-MA), who supports tax increases for the wealthy and opposes letting sequestration begin, took issue with Harkin’s views on federal spending. “It’s very difficult to follow the eloquence of my colleague from Iowa,” Collins said. “The fact is, however, I believe we do have a spending problem and the $16.4 trillion dollar debt is ample evidence of that.”