A viewer asked this question on 3/9/2000:
How do some people want to balance the budget?
budgetanalyst gave this response on 3/9/2000:
The budget is balanced right now. In fact there is a surplus and surpluses are foreseen for the future. So there is no longer talk about "balancing the budget."
Before the current situation of surplus, when big deficits were happening, things that were discussed for balancing the budget involved a wide range of options.
The first thing that you have to keep in mind is that there are basically only two ways to balance a budget that is in deficit: You either reduce expenses, or you make more money. This is true of personal budgets as well as national budgets. (The "making money" part of the national budget is taxes.) All past discussions of Federal deficit reduction involved these two basic approaches, or combinations of them.
Some taxes were actually increased (such as for gasoline and Social Security, and personal income taxes). Some people proposed doing away with the current tax system, arguing that a "flat tax" or a "value added tax" (VAT) would make taxes simpler and at the same time raise more money.
Other things proposed involved cutting government programs, and many such proposals have been made. Most of them were not practical, but some reductions did take place. These reductions were mostly in the defense budget, which stopped growing as the Soviet Union collapsed and it became apparent that there was no need to spend much money to deter a non-existent Soviet military.
There were other proposals, such as an amendment to the Constitution requiring a balanced budget, but these were mostly political grandstanding - stating that you have to balance the budget does not get it balanced. Increasing taxes and cutting expenses does, and simply stating so in the Constitution would not have changed the fact that Congress had been unable to do either to the degree necessary to balance the budget.
What led to the current surplus is more tax income, or revenue, and less expenses for the government due to economic good times. This has taken place without actually doing anything to specifically to taxes or expenses. (The current surplus, in fact, had not been foreseen a couple of years before it started to happen.) As people make more money and more people are employed, they pay more in taxes and there are lesser government expenditures on things such as unemployment compensations.
JesseGordon responded:
...