Limit spending, cut taxes

Force Congress to set priorities;reduce tax rates to raise revenue.

By Chris Chocola

We all know the root problem. Washington spends too much money relative to revenues and to its constitutional authority. And in coming years, the structural instability of our entitlement programs will threaten to bankrupt the nation altogether. Left unchanged, current policies will consign future generations to a lower standard of living and inexorable national decline.

So, the first step toward any solution is to cut off Washington politicians from the Treasury, like drunks at last call. The proposed constitutional amendment by Reps. Jeb Hensarling, R-Texas, and Mike Pence, R-Ind., to limit federal spending to 20% of GDP would do the trick. Once Congress has access to only a finite number of taxpayer dollars, real priorities will have to be set, and spending restraint will take care of itself.

The second benefit of a Spending Limit Amendment would be the cultural shift in Washington. Politicians would be incentivized to stop fighting over their piece of the pie and instead focus on growing the pie.

A pro-growth agenda of economic reform would include: reductions in individual, corporate, capital gains and dividend tax rates to spur investment and job creation; regulatory reforms to free businesses to attend to consumers rather than bureaucrats; and competitive reforms of our health care, education and energy systems to spur dynamic entrepreneurism.

Rescuing entitlement programs from their projected $56 trillion shortfall does not require tax increases, but structural reforms. Medicare and Social Security should be strengthened for younger workers as individually owned, wealth-and-health vehicles rather than unsustainable government Ponzi schemes.

Never forget that under Presidents Kennedy, Reagan and Bush, reductions in tax rates led to increases in tax revenue. The same will happen here, and the new money can be used to pay down the debt and secure our economic future.

Economic reform may not be easy, but it is simple.

Chris Chocola is president of the Club for Growth, which advocates limited government, low taxes and economic freedom.

Posted at 12:21 AM/ET, March 17, 2010 in USA TODAY editorial

http://blogs.usatoday.com/oped/2010/03/ ... taxes.html