Schafer Column: North Dakota’s Lesson For Solving The Deficit Problem

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North Dakota was just rated as the “Best Run State in America”, and there are lessons to be learned as we approach our financial problems in the federal government.

President Obama pushes tax increases to solve the outrageous deficit problem facing our country and says “the majority of Americans agree with my approach.” David Axlerod joins in by telling us that the President has a tax increase mandate. But my experience as Governor of North Dakota tells me that they are completely wrong to take this approach.

It is clear that people are looking for a more efficient, less costly and less intrusive government guiding their lives. But anyone can take five minutes and discover where hard earned tax dollars are being spent on something that is unnecessary and unwanted.

It is also perfectly clear that if we give more revenues, the legislative branch will not do the hard and unappealing work to prioritize our expenditures and eliminate or consolidate programs that will save us money and help solve the deficit spending that our government is hooked on these days. The legislative process simply does not have the discipline to eliminate expenditures unless they are absolutely forced to. No one wants to go home and tell their constituents that a coveted program is not affordable anymore.

Anyone who has operated a business knows, when faced with a budget that doesn’t balance, that a 10% cut in spending can be found when necessary. And a 5% cut is easy to find without harming operations. The federal budget is currently $3.8T trillion and a 10% decrease would generate $380 billion to help solve the $1.1 trillion deficit problem. Even if we forced a 5% reduction a $190 billion reduction in expenditures dwarfs the President’s tax increase proposal that finds about $80B per year.

When we approached the budget disasters in North Dakota in the 1990s with the concept of priority spending, it was necessary to commit to no tax and revenue increases to force the legislature to seek the efficiencies in the face of things they didn’t want to do. By making it a “no choice” option, we were able to reduce budgets and provide a lower cost of government for our citizens. Confidence was restored which spurred our economy, and today ND stands as a testament to forcing efficiencies with the best economy in the USA!

I challenge President Obama to show us an example when increased revenues led to even one elimination of an existing expenditure. The President is wants to trim the fat in our diets, trim the fat in our bellies and trim the fat in our corporations, but his policies will never, never, never allow us to trim the fat in our government.

People don’t mind paying taxes if they feel the revenue is being spent efficiently. And our history is replete with commitments by both the legislative and executive branches of our government to reduce expenditures and increase revenues to solve budget problems. But history also shows us that the revenue increases come, but the efficiencies in our Government are never produced.

I agree that everyone should pay their fair share, and if the President wants to increases taxes on millionaires in our country there is a time to do so. But if we really want to solve the deficit problem the time to raise taxes is AFTER we trim up the budgets! Otherwise, we leave $380 billion on the table that our citizens are paying for unnecessarily!

Ed Schafer is the former Governor of North Dakota and served as Secretary of Agriculture in the George W. Bush administration.

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