How Modest Spending Restraint Fixes the Budget

The federal budget numbers since the pandemic make one thing clear. Washington does not have a revenue problem. It has a spending problem.

From 2019 to today, federal outlays have surged by roughly 59 percent. Over the same period, federal revenue has risen by about 49 percent. Both are large increases. But spending has grown much faster, and that gap explains why the federal deficit has exploded.

The deficit was already too high in 2019. Since then, it has roughly doubled. That outcome was not inevitable. It was the result of policy choices that allowed spending growth to race ahead of revenue.

The Fix Is Straightforward

Balancing the budget does not require massive tax hikes or radical economic experiments. It requires discipline.

If federal revenue grows at about 5 percent per year, a reasonable assumption given historical trends and nominal economic growth, then spending simply needs to grow more slowly. Holding spending growth to roughly 4 percent per year would change the entire fiscal outlook.

That difference may sound small. It is not.

Over time, growing spending more slowly than revenue would steadily shrink the deficit. Eventually, the budget would balance. Continued discipline would then produce modest surpluses that could be used to pay down the national debt rather than pile on more of it.

This is how sustainable fiscal policy actually works.

Entitlement Reform Matters

Achieving slower spending growth is realistic. It does not require across-the-board cuts or sudden austerity. The largest drivers of long-term spending growth are entitlement programs. Gradual, targeted reforms can slow their growth rate without harming vulnerable populations.

That approach preserves the social safety net while restoring basic budget sanity.

What it does not do is pretend that the problem can be solved by taxing more.

The Wrong Path

The alternative path is already familiar. Ever-higher spending leads to calls for ever-higher taxes. Higher taxes then weaken economic growth, which makes deficits worse, not better.

Washington responds by spending even more.

That cycle ends with a weaker economy, fewer opportunities for working families, and a federal government that is even more indebted and less flexible.

A Better Choice

Growing revenue faster than spending is not ideological. It is arithmetic.

Modest restraint on spending growth would stabilize the budget, reduce deficits over time, and eventually allow debt to fall as a share of the economy. That outcome does not require new taxes or economic disruption. It requires policymakers to treat spending growth as a policy choice rather than an inevitability.

The budget figures since the pandemic show that this approach is achievable if Washington is willing to adopt it.