The U.S. Hasn't Had a Balanced Budget Since 1929, But That Could Change This Year

On Sunday, a Fox News interview that included Senator Bob Corker (R-Tenn.) and Senate Majority Whip Dick Durbin (D-Ill.) gave inspiring hope to a future deal between Republicans and Democrats concerning the upcoming federal budget fiasco.

After a week of meetings with President Obama and other mMembers on Capitol Hill, Corker seemed confident that escalating cooperation within the 113th Congress could reach a grand bargain deal that would sufficiently address the nation's fiscal health.

He claimed enough commonality over the next few months between the White House and Congress could produce a clear, constructive budget that both parties can agree on; a rare opportunity which requires focus, commitment, and an acceptance of criticism when presenting proposals. Ultimately, the debate on taxes could make or break a budget compromise while Medicare and Social Security may be the bargain's ultimate demise.

Long-term entitlements and a deterioration in revenues have caused our nation's federal debt issue. It will take cleaning up the tax code and reducing the number of tax expenditures and loopholes in order to obtain adequate deficit reduction.

The proposed GOP budget is virtually comprised of all spending cuts while the Senate Democrats' proposal takes into account half spending cuts and half tax increases. Democrats aren't necessarily abandoning values and surrendering by including spending cuts and this should by no means be used against the Republicans' failure include tax increases in their proposal. Democrats are conscious about the dangers of raising taxes at a time when the economy is still weak and this should be seen as noble and mindful, not as concession.

At the same time, Republicans must recognize that making absolutist statements is ludicrous, especially when the public is demanding balance and reasonableness. Following what Boehner agreed to in December, House leadership must consider tax increases.

The grand bargain lies within the middle. Both Republicans and Democrats agree the budget should include half spending cuts; that's the easy part. The remaining half should include a combination of tax increases and tax reform which contribute to deficit reduction by closing off loopholes and eliminating deductions.

Cleaning up the tax code is daunting task and seen by many as more of a a long-term goal, but by broadening the tax base, raising marginal tax rates, and returning some rates to Clinton-era levels, most legislators will be content.

A majority of Americans want Congress to reach a compromise on the budget. Instead of jostling for party concession and basing debate off tax cuts vs. tax increases, legislators must base their arguments off what has been proposed by both parties. The median constitutes a plan that includes half spending cuts, a quarter revenue generated by tax increases, and a quarter generated by tax and entitlement reform.

This process will be filled with discouragement, pain, and frustration, with a certainty of loss for everyone involved. Legislators should recognize this assumption before debate, as a divided government comes a fundamental willingness to compromise. Remember, there's no free lunch no matter which way you look at it.

We haven't seen a balanced budget since 1929, so hopes for that in the near future are off the table. Some believe this isn't a reason for alarm so long as the ratio of debt to GDP stays small, but I believe a cyclically balanced budget is an obligation that we must pursue. If we hold businesses accountable to these guidelines, we should be following suit; there's no excuse.

Above all, the prospects of bipartisanship in Washington are greater than ever. Interest rates are on there way up, the stock market is enjoying a rare linear progression, and it's all because the country is optimistic about it's future. Legislators must sustain their commitment to a grand bargain, abstain from absolutism, and keep working for the greater good of the American people, not party accolades.