House Speaker John Boehner (R-Ohio) sent a memo to all House Republicans today, telling them what a great job they’re doing. Of particular interest, though, was the Speaker arguing how “noble” he and his party are for trying to balance the budget. From the memo:
The book Congressman Lincoln by Chris DeRose, which I recently read, includes a chapter focused on Abraham Lincoln’s efforts to help craft a new national agenda. At one point in the book, young Lincoln warns that government debt is “growing with a rapidity fearful to contemplate.”
“[Government debt] is a system not only ruinous while it lasts, but one that must soon fail and leave us destitute,” Lincoln warns his countrymen in Congressman Lincoln. “An individual who undertakes to live by borrowing, soon finds his original means devoured by interest, and next no one left to borrow from – so must it be with a government.”
Lincoln’s words ring true today, perhaps to a degree greater than ever before.
Lincoln, however, while warning of debt, also said that the debt had been created by the unwillingness to consider new revenue.
“By this means a new national debt has been created, and is still growing on us with a rapidity fearful to contemplate — a rapidity only reasonably to be expected in time of war. This state of things has been produced by a prevailing unwillingness either to increase the tariff or resort to direct taxation. But the one or the other must come,” Lincoln wrote in the Whig Circular in 1843.
Oh how I love this story.
Lincoln, who saw great value in a strong federal government, supported public investments in infrastructure, and increased taxes to pay for the Civil War, was concerned about government debt. The historical context matters — Lincoln warned of lost creditors, while in contemporary times, investors are eager to loan the United States money — but it would appear the legendary leader believed in fiscal responsibility.
But Boehner has no use for what Lincoln actually said and did. While today’s House Speaker refuses to consider asking any American to pay so much as a penny in additional taxes, Lincoln saw increases in taxes or tariffs as an undeniable way of responsibly paying our debts. Indeed, he blamed federal debts on “a prevailing unwillingness [to] resort to direct taxation.”
And to borrow a phrase, Lincoln’s words ring true today, perhaps to a degree greater than ever before.
I’d just add, by the way, that the Speaker’s credibility on the issue is genuinely laughable. Boehner today writes, “There should be no doubt that our purpose in calling for a balanced budget is a noble one, and the right one.” This is the same Boehner who approved George W. Bush’s tax cuts without paying for them, put the price of two wars on the national charge card for future generations to worry about, supported Medicare expansion through deficit financing, and added the costs of a Wall Street bailout to the national debt.
Now this same guy wants to talk about the nobility of his fiscal agenda? While taking Lincoln out of context? And while pretending his preferred budget plan isn’t filled with magic asterisks?
C’mon, Mr. Speaker. You can do better than this.
Update: Jay Bookman emails to let me know the story gets even better. In that same piece, Lincoln goes on to endorse a tariff rather than a direct or property tax to raise revenue, because — get this — through a tariff, “the burthen of revenue falls almost entirely on the wealthy and luxurious few, while the substantial and laboring many … go entirely free.”
So, by 2013 standards, Lincoln is a success-hating RINO, right?
By: Steve Benen, The Maddow Blog, March 28, 2013
When he was performing his Full Jeb of Sunday show interviews over the weekend, Jeb Bush got asked everywhere whether he’s running for president, and each time he gave the same practiced answer (not thinking about it yet). He also got asked whether his brother’s disastrous presidency, and the fact that Dubya left office with abysmal approval ratings (Gallup had him in the 20s for much of 2008) would be a drag on him. Jeb gave the answer you’d expect: history will be kind to my brother, I’m very proud of him, and so on. Of course it’s true that Jeb, what with his last name and all, would have to “grapple” with his brother’s legacy more than other candidates. But when we think about it in those terms, I think we overlook something important about how the Bush legacy will continue to operate on Republicans, not just Jeb but all of them.
I thought of this when reading Peter Beinart’s take on Jeb, wherein he says something I think misses the mark:
That’s why Jeb Bush will never seriously challenge for the presidency—because to seriously challenge for the presidency, a Republican will have to pointedly distance himself from Jeb’s older brother. No Republican will enjoy credibility as a deficit hawk unless he or she acknowledges that George W. Bush squandered the budget surplus he inherited. No Republican will be able to promise foreign-policy competence unless he or she acknowledges the Bush administration’s disastrous mismanagement in Afghanistan and Iraq. It won’t be enough for a candidate merely to keep his or her distance from W. John McCain and Mitt Romney tried that, and they failed because the Obama campaign hung Bush around their neck every chance it got. To seriously compete, the next Republican candidate for president will have to preempt that Democratic line of attack by repudiating key aspects of Bush’s legacy. Jeb Bush would find that excruciatingly hard even if he wanted to. And as his interviews Sunday make clear, he doesn’t even want to try.
The focus on ideas like credibility and pre-empting attacks makes it seem as though this is really an issue of rhetoric and positioning, but it’s more than that. Let’s go through point by point. Does a Republican need to establish credibility as a deficit hawk? No, because the definition of deficit hawkery is endlessly malleable; Republicans who want to give huge tax cuts to the rich and increase military spending pretend to be deficit hawks just by saying “We need to rein in entitlements,” and people in the press believe them. Nobody voted for Barack Obama because they didn’t think Mitt Romney was enough of a legitimate deficit hawk. Does the next Republican candidate need to promise foreign-policy competence? Ask Michael Dukakis how important establishing your competence is to winning the White House. And did McCain and Romney lose because they didn’t create enough distance between themselves and Bush by not repudiating parts of his legacy?
Ah, here’s where it gets tricky. What, exactly, should they have repudiated, or should future Republican presidential contenders repudiate? Bush’s tax cuts for the wealthy that helped explode the deficit? His military adventurism? Appointing right-wing judges? Undermining environmental and workplace protections? The trouble is that those things are central to conservative ideology as it exists today. During much of the Bush years, Republicans controlled all three branches of government, and got pretty much everything they had ever wanted. You can tweak Bush’s legacy around the edges, but if you don’t believe in nearly everything he did, you aren’t really a Republican.
This reminds me of a terrific piece this magazine ran about the Iraq War in the fall of 2005 by Sam Rosenfeld and Matthew Yglesias called “The Competence Dodge.” Their argument was that while the Bush administration was most certainly screwing up the war, even if they had been more competent, it would only have made a small difference. The problem wasn’t the details of the execution; the problem was that invading Iraq was a terrible idea. The same is true of the Bush administration more broadly. Yes, they screwed some things up. But on the whole, the problems sprang from their goals. The people who run for the Republican nomination in 2016 are going to share those goals, and the Democrats will once again say “You just want to take us back to the Bush years.” That will be true whether any of them are named Bush or not.
By: Paul Waldman, Contributing Editor, The American Prospect, March 12, 2013
John Boehner, the speaker of the House, claims to be exasperated. “At some point, Washington has to deal with its spending problem,” he said Wednesday. “I’ve watched them kick this can down the road for 22 years since I’ve been here. I’ve had enough of it. It’s time to act.”
Actually, Mr. Boehner needs to refresh his memory. During the first decade of his time in Congress, the U.S. government was doing just fine on the fiscal front. In particular, the ratio of federal debt to G.D.P. was a third lower when Bill Clinton left office than it was when he came in. It was only when George W. Bush arrived and squandered the Clinton surplus on tax cuts and unfunded wars that the budget outlook began deteriorating again.
But that’s a secondary issue. The key point is this: While it’s true that we will eventually need some combination of revenue increases and spending cuts to rein in the growth of U.S. government debt, now is very much not the time to act. Given the state we’re in, it would be irresponsible and destructive not to kick that can down the road.
Start with a basic point: Slashing government spending destroys jobs and causes the economy to shrink.
This really isn’t a debatable proposition at this point. The contractionary effects of fiscal austerity have been demonstrated by study after study and overwhelmingly confirmed by recent experience — for example, by the severe and continuing slump in Ireland, which was for a while touted as a shining example of responsible policy, or by the way the Cameron government’s turn to austerity derailed recovery in Britain.
Even Republicans admit, albeit selectively, that spending cuts hurt employment. Thus John McCain warned earlier this week that the defense cuts scheduled to happen under the budget sequester would cause the loss of a million jobs. It’s true that Republicans often seem to believe in “weaponized Keynesianism,” a doctrine under which military spending, and only military spending, creates jobs. But that is, of course, nonsense. By talking about job losses from defense cuts, the G.O.P. has already conceded the principle of the thing.
Still, won’t spending cuts (or tax increases) cost jobs whenever they take place, so we might as well bite the bullet now? The answer is no — given the state of our economy, this is a uniquely bad time for austerity.
One way to see this is to compare today’s economic situation with the environment prevailing during an earlier round of defense cuts: the big winding down of military spending in the late 1980s and early 1990s, following the end of the cold war. Those spending cuts destroyed jobs, too, with especially severe consequences in places like southern California that relied heavily on defense contracts. At the national level, however, the effects were softened by monetary policy: the Federal Reserve cut interest rates more or less in tandem with the spending cuts, helping to boost private spending and minimize the overall adverse effect.
Today, by contrast, we’re still living in the aftermath of the worst financial crisis since the Great Depression, and the Fed, in its effort to fight the slump, has already cut interest rates as far as it can — basically to zero. So the Fed can’t blunt the job-destroying effects of spending cuts, which would hit with full force.
The point, again, is that now is very much not the time to act; fiscal austerity should wait until the economy has recovered, and the Fed can once again cushion the impact.
But aren’t we facing a fiscal crisis? No, not at all. The federal government can borrow more cheaply than at almost any point in history, and medium-term forecasts, like the 10-year projections released Tuesday by the Congressional Budget Office, are distinctly not alarming. Yes, there’s a long-term fiscal problem, but it’s not urgent that we resolve that long-term problem right now. The alleged fiscal crisis exists only in the minds of Beltway insiders.
Still, even if we should put off spending cuts for now, wouldn’t it be a good thing if our politicians could simultaneously agree on a long-term fiscal plan? Indeed, it would. It would also be a good thing if we had peace on earth and universal marital fidelity. In the real world, Republican senators are saying that the situation is desperate — but not desperate enough to justify even a penny in additional taxes. Do these sound like men ready and willing to reach a grand fiscal bargain?
Realistically, we’re not going to resolve our long-run fiscal issues any time soon, which is O.K. — not ideal, but nothing terrible will happen if we don’t fix everything this year. Meanwhile, we face the imminent threat of severe economic damage from short-term spending cuts.
So we should avoid that damage by kicking the can down the road. It’s the responsible thing to do.
By: Paul Krugman, Op-Ed Columnist, The New York Times, February 7, 2013
The budget deal that just averted the supposed fiscal cliff was only a warm up. The next fiscal cliff is the $110 billion in automatic budget cuts (sequesters) that last week’s budget deal deferred only until March. But, as long as we are using topographic metaphors, this is less a cliff than a bluff.
On the Sunday talk shows, Republican leaders were full of bravado and swagger. Representative Matt Salmon of Arizona, on CBS “Face the Nation” said it was about time “for another government shutdown.”
Senate Minority Leader Mitch McConnell, speaking with ABC’s George Stephanopoulos, ruled out any further tax increases, declaring that “the tax issue is finished, over, completed.” He insisted, “Now it’s time to pivot and turn to the real issue, which is our spending addiction.”
But is spending really the problem? For most the postwar era, federal tax revenues hovered around 19 percent of GDP, and spending a bit more than that. But for the four years since the financial collapse, federal revenues have been under 16 percent of GDP, thanks to the Bush tax cuts and the weak economy. It’s true that spending is up—it peaked at 25.2 percent of GDP in FY 2009, mainly because of the stimulus. But if it were not for the stimulus, unemployment would be even higher and growth even lower.
The point is that none of these fiscal issues caused the financial collapse, nor are they retarding the recovery. Were Congress to reduce the budget deficit, it would weaken, not strengthen the recovery. That is the real danger of the so-called fiscal cliff.
Spending relative to GDP was as high as 23.5 percent in the Reagan years, a shade above its projected level for this year. So there is no “addiction to spending.” If a free society wants to tax itself more to pay for decent retirement and health benefits, that is a political choice. Even with the slight tax increase of last week’s budget deal, limited to the top one percent, we still have the lowest tax rates of any wealthy country.
Seemingly, the Republicans hold a much stronger hand in the next round of budget talks: If Congress does nothing, the automatic cuts of the sequester take hold.
But Republicans have been blustering on taxes and spending for years. They were never going to raise taxes (Sorry, Grover), but when Obama decided to hang tough they turned around and voted to hike taxes on the richest one percent.
Obama needs to call McConnell’s bluff. On the issue of the debt ceiling, he can invoke his authority under the Fourteenth Amendment, which provides that the U.S. government’s debts must be honored. He’d get wide backing.
On the sequester, Obama can keep Social Security and Medicare cuts off the table. There is more than one way to balance accounts going forward. One way is to raise the ceiling on incomes subject to payroll taxes. That would be a lot more popular than cutting benefits.
And does McConnell really want the sequester to bite, with its $60 billion in Pentagon cuts? In the great budget showdowns of the mid-1990s with Newt Gingrich, Bill Clinton got the GOP to blink first.
If Clinton could achieve that with the Great Newt, Obama can do no less with the Great Turtle.
By: Robert Kuttner, The American Prospect, January 7, 2013
Thanks to an ultraconservative congressional faction, many Americans now view the Republican Party as extremist, petty and irresponsible. You need look no further than the ridiculous, drawn-out drama over the so-called fiscal cliff to see the GOP’s inability to negotiate reality.
But while its brand is badly damaged, the Republican Party has managed to keep alive its mystique as the party of fiscal restraint. Shortly before the election, a Washington Post/ABC News poll showed that, by a margin of 51 percent to 43 percent, Americans believed Mitt Romney would do a better job on the deficit than President Obama. That’s in keeping with years’ worth of public opinion that gives Republicans credit for fiscal conservatism.
But it’s flat-out wrong. That’s just a convenient myth that Republicans have sold the taxpayers — a clever bit of marketing that covers a multitude of sins. There is nothing in the GOP’s record over the last two decades showing it to be a party that is sincere about balancing the budget, ferreting out waste or reining in excessive government spending. Indeed, it’s a big lie.
Just look back at the presidency of George W. Bush — eight years of red ink that Republicans would like you to forget. First, Bush pushed through the tax cuts that ruined the balanced budgets Bill Clinton had enacted. Then, he proceeded to prosecute two wars and enact a huge new entitlement: the Medicare prescription drug plan. In response to concerns about spending from then-Treasury Secretary Paul O’Neill, Dick Cheney reportedly said, “You know, Paul, Reagan proved deficits don’t matter.”
Here’s what Republicans and their base believe in: cutting spending for programs that benefit the poor, the darker-skinned, the sciences. They want to stop the flow of government funds to the arts. They want to fire bureaucrats who prevent businesses from harming their customers with poisons and bad products.
But the GOP doesn’t really want to end big government, nor does it really care about balancing the budget. If it did, wouldn’t its members be ready to tackle the Pentagon? As we wind down a decade of war, isn’t this an excellent time to cut back on hyper-expensive weaponry? Can’t we stop feeding the military-industrial complex?
Instead, House Republicans have done everything they can think of to protect current rates of military spending. Mitt Romney, for his part, campaigned on a promise to build more warships. Please remember that the Pentagon accounts for about 30 percent of federal spending.
Then there are those pesky retirement programs — Social Security and Medicare. House Republicans supported Paul Ryan’s plan to change Medicare to a voucher program, but they did so knowing that it would never see the light of day. If they were so proud of it, why didn’t Ryan campaign on it when he was Romney’s running mate?
Instead, the Romney-Ryan team denounced Obama for making cuts to Medicare. The party that claims the mantle of fiscal responsibility shamelessly pandered to its aging base by blaming Obama for trying to rein in one of the costliest government programs.
Democrats have their own soul-searching ahead on Social Security and Medicare, which cannot be sustained without tax increases, benefit cuts or a combination of the two. (Let me rush to say here that Social Security is a much easier fix. Just hike the payroll tax for people earning more than $114,000 a year.) Medicare costs, especially, are growing at an alarming rate as baby boomers retire.
Still, Tea Partiers — the core of support for arch-conservatives in Congress — aren’t keen on cutting Medicare, polls show. Many of them seem to believe that cutting spending means only cutting that which goes to other people, not to them. Indeed, political science research shows a sharp racial edge underlying those sentiments, with racially resentful whites likely to favor cuts to programs, such as Head Start, which they associate with the “undeserving” poor.
After winning the gavel as House Speaker again last week, John Boehner said the “American dream is in peril” because of debt and pledged to reduce it. As another budget brawl nears — a debt-ceiling fight will be upon us in a couple of months — you’ll hear Republicans frequently claim the mantle of fiscal responsibility.
There is no reason to believe them.
By: Cynthia Tucker, The National Memo, January 5, 2013