Deficits Still Don’t Matter To Republicans
Think there will eventually be a bipartisan deal to increase the public debt limit after an extended period of Kabuki Theater posturing? Maybe it’s time to think again.
Ezra Klein really hits the nail on the head in describing the “negotiations” as they stand today:
The negotiation that we’re having, in theory, is how to cut the deficit in order to give politicians in both parties space to increase the debt limit. But if you look closely at the positions, that’s not really the negotiation we’re having. Republicans are negotiating not over the deficit, but over tax rates and the size of government. That’s why they’ve ruled revenue “off the table” as a way to reduce the deficit, and why they are calling for laws and even constitutional amendments that cap federal spending rather than attack deficits. Democrats, meanwhile, lack a similarly clear posture: most of them are negotiating to raise the debt ceiling, but a few are trying to survive in 2012, and a few more are actually trying to reduce the deficit, and meanwhile, the Obama administration just met with the Senate Democrats to ask them to please, please, stop laying down new negotiating markers every day.If we were really just negotiating over the deficit, this would be easy. The White House, the House Republicans, the House Progressives, the House Democrats and the Senate Republicans have all released deficit-reduction plans. There’s not only apparent unanimity on the goal, but a broad menu of approaches. We’d just take elements from each and call it a day. But if the Republicans are negotiating over their antipathy to taxes and their belief that government should be much smaller, that’s a much more ideological, and much tougher to resolve, dispute. The two parties don’t agree on that goal. And if the Democrats haven’t quite decided what their negotiating position is, save to survive this fight both economically and politically, that’s not necessarily going to make things easier, either. Negotiations are hard enough when both sides agree about the basic issue under contention. They’re almost impossible when they don’t.
It’s worth underlining that “deficits” and “debt” don’t in themselves mean any more to conservatives than they did when then-Vice President Dick Cheney said “deficits don’t matter” in 2002. Every Republican “deficit reduction” proposal is keyed to specific spending cuts–without new revenues–and increasingly, to an arbitrary limit on spending as a percentage of GDP. Even the version of a constitutional balanced budget amendment that Sen. Jim DeMint is insisting on as part of any debt limit deal would have a spending-as-percentage-of-GDP “cap” (at 18%, as compared to about 24% currently) that would force huge spending reductions (you can guess from where since GOPers typically consider defense spending as off-limits as taxes).
Today’s Republicans are simply using deficits as an excuse to revoke as much of the New Deal/Great Society tepid-welfare-state system as they can get away with. And it’s really just a latter stage of the old conservative Starve-the-Beast strategy for deliberately manufacturing deficits in order to cut spending. Democrats should point this out constantly, and not let Republicans get away with claiming they are only worried about debt and fiscal responsibility.
By: Ed Kilgore, The Democratic Strategist, May 12, 2011
Modern Snake Oil: “We Have No Revenue Problem”
OK, this is the day everyone hates. You have to pay your taxes. Who wants to write that check? Nobody, probably.
The truth, however, is that Rep. Paul Ryan, the Tea Party, and most politicians are not being honest when they tell us there is no revenue problem, only a spending problem.
The Associated Press reports today that an IRS analysis tells us that 45 percent of Americans will pay no federal income taxes for 2010. Plus, the 400 Americans with the highest adjusted gross incomes averaged $345 million for the year. Their average federal income tax rate was 17 percent, down from 26 percent in 1992. Wow, and they need another tax break?!
This confirms the Warren Buffett line that his secretary pays a higher percentage of her income in taxes than he does.
But here is our problem: We cannot come close to dealing with this deficit unless we both cut spending and raise revenue. We certainly won’t accomplish anything unless we deal with the tax problem and reform our tax code.
I firmly believe that every American who works or gets income should pay something in federal taxes. Even if it is a small amount. This by itself won’t do much to dent the deficit, but it would be important as a symbol that everyone is in this together. Second, and most important, the gap between rich and poor and the middle class is widening in this country. Those who earn over a million dollars did not deserve an average tax cut of $120,000 under George Bush; they certainly don’t need that raised to $200,000 under the Ryan plan.
We need to recognize that the richest 2 percent of Americans should pay more, but we also need to make this tax system make sense. How can you have a society where nearly half the income earners pay no income taxes, due to deductions, loopholes, and special deals?
I am not arguing that struggling families should be hit with a whooping tax bill, but, rather, that our politicians should be honest with the American people. If you are fighting two wars, you have to pay for them. If you have to save the car companies and our financial institutions, you have to pay, at least initially. If you are going to provide Medicare, Medicaid, Social Security, education, bridges, roads, and air traffic controllers, for that matter, you have to have the revenue.
It is just plain dishonest to put forth a budget and a plan that says “we have no revenue problem.” That is modern snake oil. It is time that we dealt with our tax problem, otherwise we won’t really be dealing with our deficit at all.
By: Peter Fenn, U.S. News and World Report, April 18, 2011
The Budget Battles: Prosperity for Whom?
If the House Republican budget blueprint released on Tuesday is the “path to prosperity” that its title claims, it is hard to imagine what ruin would look like.
The plan would condemn millions to the ranks of the uninsured, raise health costs for seniors and renege on the obligation to keep poor children fed. It envisions lower taxes for the wealthy than even George W. Bush imagined: a permanent extension for his tax cuts, plus large permanent estate-tax cuts, a new business tax cut and a lower top income tax rate for the richest taxpayers.
Compared to current projections, spending on government programs would be cut by $4.3 trillion over 10 years, while tax revenues would go down by $4.2 trillion. So spending would be eviscerated, mainly to make room for continued tax cuts.
The deficit would be smaller, but at an unacceptable cost. Health care would be hardest hit, followed by nonsecurity discretionary spending — the sliver of the budget that encompasses annually appropriated programs. Those include education, scientific research, environmental preservation, investor protection, disease control, food safety, federal law enforcement and other areas that bear directly on the quality of Americans’ daily lives. The proposed cuts in such programs are $923 billion deeper than President Obama called for in his 2012 budget, which pushed the edge of what is politically possible.
Another big cut — $715 billion over 10 years — comes from mandatory spending other than Social Security and the big health care programs, a category that includes food stamps and federal retirement.
The blueprint does not call for any specific changes to Social Security, but, without explanation, it assumes a reduction of $1 trillion over 10 years in the program’s surplus. That would weaken the program by hastening the insolvency of Social Security.
When he unveiled this plan, Paul Ryan, a Republican of Wisconsin and the chairman of the House Budget Committee, declared, “This isn’t a budget. This is a cause.”
There is much truth in that. The blueprint is not a serious deficit reduction exercise for many reasons, the most important of which is that serious deficit reduction requires everything to be on the table, including tax increases. The plan released at the end of last year by the Obama deficit commission was one-third tax increases and two-thirds spending cuts. President Obama’s budget calls for a mix of tax cuts and tax increases, among the latter, letting high-end Bush tax cuts expire at the end of 2012. The Republican plan calls only for tax simplification. It would get rid of loopholes and reduce rates in a way that would not raise overall revenues but would invariably cut the tax bill of wealthy taxpayers for whom lower rates are more valuable than assorted loopholes.
The deficit is a serious problem, but the Ryan plan is not a serious answer. With its tax cuts above all, and spending cuts no matter the consequences, it is a recipe for more loud talk about the deficit but no real action.
By: Editorial, The New York Times, April 5, 2011
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