Federal government still operating in the red despite record revenue

As this unsustainable debt outpaces American productivity, growing out of this enormous hole is increasingly difficult, and revenue alone cannot solve the problem. In its latest baseline report, the Congressional Budget Office (CBO) projects revenues in 2016 are expected to reach 18.9 percent of our gross domestic product (GDP) while spending will be 21.1 percent of GDP next year. Of the five times in the last 50 years that the annual budget has been balanced or in surplus, annual spending never exceeded 18.7 percent of GDP. In fact, the last time the budget was in balance, annual spending was only 17.6 percent of GDP. Again, this shows that revenue is not the problem.

Even as our economy continues to struggle with insufficient levels of growth, it is generating more than enough revenue to balance the budget. But, that cannot be achieved if we do not control spending. While the post-WWII budget has never been balanced with annual government spending above 18.7 percent of GDP, the CBO projects spending will average 21.3 percent of GDP per year for the next decade. The government has never generated annual revenues higher than 20 percent of GDP, even when the top tax bracket was 90 percent. And, that one year it hit 20 percent was during the peak of the Dot Com bubble. Other than that one year, annual revenues have never exceeded 19.2 percent of GDP, further evidence that we cannot tax our way to a balanced budget at our current levels of spending.

The enactment of tax increases on Americans is the main reason for the all-time high federal taxes. Obamacare alone raised taxes on middle and upper income Americans by more than $1 trillion over the 2013-2022 period. Yet, dangerous levels of debt remain.

There is a course of action far better than overtaxing and overspending that will actually correct the problem. We must fix our broken, overly burdensome and complex tax code by simplifying it and lowering rates for all individuals, families and businesses. We must reduce federal spending and enact strong budget controls that prevent Congress and the President from spending beyond our means. We must stabilize our entitlement programs to maintain promises to protect current recipients, while strengthening the systems to guarantee benefits for future recipients. Comprehensive fiscal reform that accomplishes these priorities will result in the economic and job growth necessary to help make American businesses more competitive, increase revenue through growth and improve our economy. An improved economic position will better enable our nation to respond well to the challenges ahead.