Why Republicans Aren’t Serious About Reducing the Deficit

By: inoljt, http://mypolitikal.com/ 

Republicans talk a good game about why the United States must reduce its debt. Republican Congressman Paul Ryan:

We face a crushing burden of debt. The debt will soon eclipse our entire economy, and grow to catastrophic levels in the years ahead.

On this current path, when my three children — who are now 6, 7, and 8 years old — are raising their own children, the federal government will double in size, and so will the taxes they pay.

No economy can sustain such high levels of debt and taxation. The next generation will inherit a stagnant economy and a diminished country.

Frankly, it’s one of my greatest concerns as a parent — and I know many of you feel the same way.

Mr. Ryan then proposed a plan whose purpose is purportedly to solve America’s debt problems. To its credit, this plan cuts trillions of dollars in spending. It bravely – or cruelly, depending on your political orientation – cuts the sacred Medicare program.

But then Mr. Ryan’s plan does something very strange, at least if its purpose is to reduce the deficit.

To cut the deficit one has to cut spending and raise taxes. Supply-siders argue that cutting taxes will lead to more revenues raised. Perhaps in a world in which taxation levels are at 90% or 70% that is true, but right now in the United States we’re definitely not at that level (the highest tax bracket is currently 35%). So one have to raise taxes to solve the deficit.

Instead of raising taxes, however, Mr. Ryan cuts trillions of dollars in taxes in his plan.

This is not something unique to this particular Republican. As a whole, the Republican Party steadfastly refused to allow a single dime in revenue increases during the debt ceiling debate. It proudly advocated extending the Bush tax cuts for everybody before that. Fighting against tax increases is a very core element of the Republican program today. The Republican Party does this because it goes against their philosophy of small government.

Now, that’s absolutely fine; there’s nothing wrong with arguing against tax increases. The Republican Party believes that America should lower taxes and lower spending. That’s a philosophy that it will try selling to the American people during election time, and then America will have a debate over that philosophy.

But there is a problem when Republicans sell their proposals as a way to solve the deficit. Cutting taxes and cutting spending does not solve the deficit anymore than “tax and spend liberals” do. Cutting taxes increases the deficit. That’s simply a fact (unless taxes are 70%, which they aren’t in this country).

The Ryan proposal, like most Republican proposals, is a proposal to change America to be more like what Paul Ryan wants America to be like. That may be a better America or a worse America. I personally believe that enacting Ryan’s plan hurts America; many Americans, for very valid reasons, believe that it helps America.

But when Mr. Ryan – or other Republican politicians – sells his proposal as a way to cut the deficit, that’s disingenuous. The plan simply isn’t a way to cut the deficit; it has too many trillions of deficit-raising tax-cuts inside it. It’s fine for Mr. Ryan to advertise his plan as the Republican vision of what America should be like. It’s not fine for him to advertise the plan as a way to cut the deficit. That’s not what Republicans really want; otherwise they would be willing to accept tax increases.

All in all, any Republican who’s not willing to increase taxes is not serious about cutting the deficit, full stop. And since almost no Republican nowadays will agree to tax increases, then the Republican Party as a whole really isn’t serious about reducing America’s debt. It certainly talks a good game. But when push comes to shove, what the Republican Party really wants is to change American to be more like it’s vision of what America should be like (rather than cut the deficit). That’s absolutely fine on its merits. Just don’t pretend that you’re trying to reduce the deficit when you do that.

 

 

Why Republicans Aren’t Serious About Reducing the Deficit

By: inoljt, http://mypolitikal.com/ 

Republicans talk a good game about why the United States must reduce its debt. Republican Congressman Paul Ryan:

We face a crushing burden of debt. The debt will soon eclipse our entire economy, and grow to catastrophic levels in the years ahead.

On this current path, when my three children — who are now 6, 7, and 8 years old — are raising their own children, the federal government will double in size, and so will the taxes they pay.

No economy can sustain such high levels of debt and taxation. The next generation will inherit a stagnant economy and a diminished country.

Frankly, it’s one of my greatest concerns as a parent — and I know many of you feel the same way.

Mr. Ryan then proposed a plan whose purpose is purportedly to solve America’s debt problems. To its credit, this plan cuts trillions of dollars in spending. It bravely – or cruelly, depending on your political orientation – cuts the sacred Medicare program.

But then Mr. Ryan’s plan does something very strange, at least if its purpose is to reduce the deficit.

To cut the deficit one has to cut spending and raise taxes. Supply-siders argue that cutting taxes will lead to more revenues raised. Perhaps in a world in which taxation levels are at 90% or 70% that is true, but right now in the United States we’re definitely not at that level (the highest tax bracket is currently 35%). So one have to raise taxes to solve the deficit.

Instead of raising taxes, however, Mr. Ryan cuts trillions of dollars in taxes in his plan.

This is not something unique to this particular Republican. As a whole, the Republican Party steadfastly refused to allow a single dime in revenue increases during the debt ceiling debate. It proudly advocated extending the Bush tax cuts for everybody before that. Fighting against tax increases is a very core element of the Republican program today. The Republican Party does this because it goes against their philosophy of small government.

Now, that’s absolutely fine; there’s nothing wrong with arguing against tax increases. The Republican Party believes that America should lower taxes and lower spending. That’s a philosophy that it will try selling to the American people during election time, and then America will have a debate over that philosophy.

But there is a problem when Republicans sell their proposals as a way to solve the deficit. Cutting taxes and cutting spending does not solve the deficit anymore than “tax and spend liberals” do. Cutting taxes increases the deficit. That’s simply a fact (unless taxes are 70%, which they aren’t in this country).

The Ryan proposal, like most Republican proposals, is a proposal to change America to be more like what Paul Ryan wants America to be like. That may be a better America or a worse America. I personally believe that enacting Ryan’s plan hurts America; many Americans, for very valid reasons, believe that it helps America.

But when Mr. Ryan – or other Republican politicians – sells his proposal as a way to cut the deficit, that’s disingenuous. The plan simply isn’t a way to cut the deficit; it has too many trillions of deficit-raising tax-cuts inside it. It’s fine for Mr. Ryan to advertise his plan as the Republican vision of what America should be like. It’s not fine for him to advertise the plan as a way to cut the deficit. That’s not what Republicans really want; otherwise they would be willing to accept tax increases.

All in all, any Republican who’s not willing to increase taxes is not serious about cutting the deficit, full stop. And since almost no Republican nowadays will agree to tax increases, then the Republican Party as a whole really isn’t serious about reducing America’s debt. It certainly talks a good game. But when push comes to shove, what the Republican Party really wants is to change American to be more like it’s vision of what America should be like (rather than cut the deficit). That’s absolutely fine on its merits. Just don’t pretend that you’re trying to reduce the deficit when you do that.

 

 

Obama Reclaiming the Frame?

On the policy side of the President's jobs plan and "Buffet Tax" address this morning, reactions are mixed.  At FireDogLake, David Dayden likes the move away from the "grand bargain" territory and what appears to be an early goodbye to the super-committee, while John Walker sees the door to Medicare cuts still open.  Yglesias sees an open door with a line in the sand: not cuts to Medicare without revenue increases.  Aravosis thinks tying increases to even a hint at Medicare cuts is just dumb.  And Ezra Klein thinks the White House has learned it's lesson on chasing the "Compromiser in Chief" title: the public "gives no points for effort," they want results.

But the stand out moment for me was the change in frame in the address.  Bipartisanship/compromise/balance got the obligatory mentions, but overall the speech elludes to a wiser WH.  Via Josh Marshall:

I hope President Obama will keep hitting what I think was his strongest point in his Jobs Act speech. That is, either/or. We can have no new taxes ever for wealthy people or we can save Medicare. But not both.

Either/Or.

For the first time in a long while, Obama today at least hinted at an unwillingness to move his goal-posts closer to where Boehner has set his.  He grabbed the popular position, drew his base line a little more to the left, and reinforced it with a veto threat.  Baby steps.  Not shooting for the moon, but after 1 yr plus of reinforcing the GOP talking points on deficit reduction instead of focusing on jobs, this may be the only way out of the woods for the WH and what's left of the middle class.

I'm still skeptical the goal posts won't be moved a thousand times, especially if the possibility of having debt-ceiling circus redux months before the election scares them off the "either/or" theme (Joan McCarter: it shouldn't!), but today's speech was at least refreshing.

Also, Erica Payne and The Agenda Project, way ahead of them:

 

Starving the Beast: Cut, Cap and Balance

The debt limit is a largely symbolic check on excessive borrowing which in the past has been frequently raised with little to no controversy. Such periodic increases are necessary to keep the government running and paying its bills, regardless of ideology.

However, Congressional Republicans are now demanding that certain conditions must be met in order to win their approval of a debt ceiling increase. They have termed their list of demands Cut, Cap and Balance, and claim it is a necessary measure in order to keep the government debt from spiraling out of control, and thus keep the country functioning.

Yet the Cut, Cap and Balance Act scheduled to reach the House floor this week is anything but necessary to keep the country functioning. Rather, it is the crown jewel, the final step of conservatives' long-pursued "Starve the Beast" strategy to downsize government. It would radically limit the flexibility of the federal government to provide a social safety net, buttress the economy in tough times and respond to great national challenges, now and into the future.

But don't take my word for it. Check out this week's 90 Second Summary and decide for yourself:

 

There's more...

Weekly Audit: Hostage-Taking Over the Debt Ceiling

 

By Lindsay Beyerstein, Media Consortium blogger

The latest contrived showdown between Congressional Republicans and the White House is over what concessions the GOP will demand in order to increase the federal debt ceiling.

George Zornick of The Nation explains how the shakedown works:

Congress now needs to approve any borrowing past the $14.3 trillion debt ceiling, which the United States will reach “no later” than May 16, according to Treasury Secretary Timothy Geithner. If Congress doesn’t raise the debt ceiling, the government would have to stop spending—including stopping interest payments on those Treasury bonds, meaning that the United States would effectively default on its debt.

The debt ceiling has to be raised and everyone knows it. Surely the Republicans knew it when they voted for tax cuts for the rich with borrowed money. If the debt ceiling is not raised, the United States will default on some of its obligations. Just like what happens after you miss a credit card payment, the country’s creditors will demand higher interest in order to lend to us in the future.

Playing chicken with the debt ceiling is a recipe for increasing the national debt. Paul Waldman argues in The American Prospect that the Republicans hate government so much that they are willing to declare war on the economy in a quixotic bid to smash the state:

The reason we’re now seeing an unprecedented amount of attention paid to a vote that ordinarily passes with little notice is that the Republican Party’s agenda is being set by a group of ideological radicals who seem quite willing to cripple the American economy if that’s what it takes to strike a blow against the government they hate so much.

Peak Crazy

At AlterNet, Joshua Holland explains why failure to raise the debt ceiling would be an economic catastrophe that could jeopardize the economic recovery. “Peak Crazy,” he calls it.

However, Holland notes that a showdown over the debt ceiling does not risk an immediate government shutdown, like the one we faced over the budget battle. Borrowing isn’t the only way that government agencies are funded. The government could still spend the $150 billion or so it takes in every month in tax revenue, for example.

Yet, Senate Minority Leader Mitch McConnell (R-Kentucky) has announced that 47 GOP senators oppose raising the debt ceiling unless “credible attempts” are made to cut federal spending. Meanwhile the Tea Party is launching an all-out lobbying effort to urge House Republicans not to raise the debt ceiling without major spending cuts.

The Tea Party’s wish list includes some total pipe dreams like a balanced budget amendment to the constitution, and a law to require a two-thirds majority for all future tax increases. Former senator and current U.S. presidential hopeful Rick Santorum cheerfully announced that he would let the United States default on its debt if health care reform is not repealed. Rep. Michele Bachmann (R-Minn) helpfully suggests paying the interest on Treasury Bills using money that would otherwise go to Social Security.

Shoot the hostage

Cenk Uygur of the Young Turks argues that Democrats are panicking needlessly and, once again, offering needless preemptive concessions to the Republican fringe in the form of a proposed “hard cap” on government spending, which would cap new government spending, and subtract any overruns from social welfare programs like Medicare and Social Security.

The truth, Uygur notes, is that Wall Street has already told the Republicans in no uncertain terms that the debt ceiling will be raised. The economic consequences of doing anything else would be unthinkable. The Tea Party can yell and scream, but the adults have already made the decision. Knowing this, Democrats should not be trying to placate the Republicans so as to induce them to do something they will ultimately end up doing.

Digby on Social Security

Democrats are wavering in their decades-long commitment to defend Social Security, Heather Digby Parton (a.k.a., “Digby”) writes in In These Times:

In a quixotic attempt to fix the problems in the current economy without confronting the plutocrats, the Democrats are using the illogical argument that since Social Security is projected to have a shortfall in 35 years, we must cut benefits now. And they seek to prove to “the market” that the government is fiscally responsible by showing it’s willing to inflict pain on its citizens—in the future.

Even if we do nothing, Social Security can pay out full benefits for the next 35 years. There is no crisis. A small increase on the payroll cap on Social Security could shore up the program for generations to come. Republicans oppose Social Security because they are ideologically opposed to social welfare programs, not because Social Security is broken.

This post features links to the best independent, progressive reporting about the economy bymembers of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The MulchThe Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

 

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