Clive Crook on the Republicans’ “Pledge to America”:
On taxes, it promises to “stop all job-killing tax hikes” — that is, to retain all of the Bush tax cuts — but says nothing about the comprehensive tax reform that will be needed to raise new revenues and balance the budget without avoidable damage to growth. The Pledge maintains the pretence that spending cuts can do all the necessary fiscal lifting — and even here it is slippery. It promises to “roll back government spending to pre-stimulus, pre-bailout levels”, which seems fair enough. But it also promises “common-sense” exceptions for “seniors, veterans, and our troops”. Those common-sense exceptions are the whole ball of wax. The idea that you can control public borrowing without higher taxes and by squeezing only non-defense discretionary spending is, I’m afraid, delusional.
In essence, what [the Pledge says] is, “Deficits are a terrible thing. Let’s make them much bigger.” The document repeatedly condemns federal debt — 16 times, by my count. But the main substantive policy proposal is to make the Bush tax cuts permanent, which independent estimates say would add about $3.7 trillion to the debt over the next decade — about $700 billion more than the Obama administration’s tax proposals.
True, the document talks about the need to cut spending. But as far as I can see, there’s only one specific cut proposed — canceling the rest of the Troubled Asset Relief Program, which Republicans claim (implausibly) would save $16 billion. That’s less than half of 1 percent of the budget cost of those tax cuts. As for the rest, everything must be cut, in ways not specified — “except for common-sense exceptions for seniors, veterans, and our troops.” In other words, Social Security, Medicare and the defense budget are off-limits.
So what’s left? Howard Gleckman of the nonpartisan Tax Policy Center has done the math. As he points out, the only way to balance the budget by 2020, while simultaneously (a) making the Bush tax cuts permanent and (b) protecting all the programs Republicans say they won’t cut, is to completely abolish the rest of the federal government: “No more national parks, no more Small Business Administration loans, no more export subsidies, no more N.I.H. No more Medicaid (one-third of its budget pays for long-term care for our parents and others with disabilities). No more child health or child nutrition programs. No more highway construction. No more homeland security. Oh, and no more Congress.”
As Andrew Sullivan says, “No one who cares about the debt should treat this document with anything but contempt.”
(And, yes, conservative readers, I just quoted Paul Krugman and Andrew Sullivan. Blah blah Hack Economist blah blah Trig Troofer blah blah. Now, tell me why they’re wrong.)
No more FBI (who cares about crimes like kidnapping anyway)
No more FAA (who cares whether planes are flying into each other or if international flight cross our borders)
No more NTSB (who cares if planes and cars have crippling flaws or are completely unsafe in an accident)
No more FDA (who needs drugs and food to be monitored. Would you like some rat poison with your steak?)
No more CDC (who needs to prevent and cure disease)
The list goes on…
Brendan
1) It’s a policy document, not a Gospel … and it is doing what it should be doing – causing rational discussion amongst a lot of voters – and irrational knee-jerk responses like #1 …
2) It is issued by politicians … just hold the GOP to a standard only 100 times as strict as that to which you hold the current Administration and Congress and your response will be “No worries !” …
3) Just as you believe that Mr Obama is not capable of responding to another (Good Deity forfend) 9/11 event in anything but sensible ways, whereas *I* go by his track record while in the White House, so rational folk do not believe that anyone has any realistic intention of getting rid of the CDC or the FBI or even the FDA …
4) In Washington-speak (and this *is* a federal-level document), a program can be “cut” by not giving it a currently-planned increase … so, before indulging in too much more fits of the vapours, remember 1), 2), and 3).
So – chill ! Enjoy your interactions with your kids ! Remember that, no matter what happens in November, you can still be the best parent you can be for *your* children … I know that such grounding helps me when the David Ks of this world opine davidkianly …
To be clear, the point isn’t that the CDC, FBI, FDA, etc., are actually going to be eliminated, or that the GOP intends to eliminate them. On the contrary, it’s clear the GOP has no such intention, and that’s precisely the point: it is mathematically impossbile, without extreme cuts of that sort (which the GOP clearly does not intend to make), to balance the federal budget, within the GOP’s own constraints (must extend ALL Bush tax cuts, must not make cuts that hurt “seniors, veterans [or] troops” — i.e., Medicare, Social Security and defense, a.k.a. the vast bulk of the federal budget). Since the GOP has no intention of making any such drastic cuts as eliminating hugely important fedearl programs, it therefore follows, quite obviously, that this is not a serious deficit-cutting document. Indeed, because the ridiculous fairy-tale that extending the Bush tax cuts will somehow drastically reduce the deficit is categorically untrue — it will, as a matter of fact, drastically increase the deficit — this is not a deficit-cutting document at all, but rather a deficit-increasing document, even as compared to Obama!. It does precisely the opposite of what it purports to do. In the words of Weird Al
FrankenGoreYankovic, it’s telling us black is white, up is down, and short is long. I am not demanding that it be “Gospel” — I’m demanding that it be serious and honest. It is totally unserious and totally dishonest. I’m holding it to a very low standard, and yet it categorically fails.(And it’s no defense to say the Democrats are totally unserious, too. Even if that’s true, the Democrats aren’t the ones asking the American people to put them back into power on the primary basis that they are the party who will get serious about tackling the federal budget. The Republicans are — again. And they’re lying — again. And you’re swallowing the lie whole — again. And so are the “Tea Party” folks — again. Partisanship trumps principle — again.)
Brendan #3 (really, it’s too easy) – “The Democrats aren’t asking the American people to put them back into power on the primary basis that they are the ones who will get serious about tackling the federal budget.” – true ’nuff … the Dems are the ones asking the American people to put them back in power even though they are the very budget-busters themselves … OY ! … it is especially ironic given that that was a large part of the justiification for electing Mr Obama to his new position – to counter “Bush economic failures” – how’s that working out for you, by the way ?
The problem with letting the Bush tax cuts expire is that it will take a bunch of funds out of private hands, from folk in an economy who are already hurting, currently to be used to pump more funds into new and additional programs which either have not started yet, or, where they *have* started, have mostly been failures … (they may all of have been failures, but I cannot substantiate that, yet) …
What is need is drastic “cuts”, starting with all the $1 Trillion plus of new programs/legislation/executive orders – and all that can be done without touching existing stuff … where the budget is hemorrhaging, it is better not to apply more leeches, but rather to find ways first to add no more additional blood-draining thingies, and then remove any blood-draining thingies recently-added, and then staunch the flows as they can be found, until the hemmorhaging is under control …
Heck, if the Dems were even vaguely serious, they could simply ‘fess up to their past couple of years’ efforts being a failure, and pass the Federal Budget as it was perhaps for 2006 at 2006 levels, as a starting point from which to work to fix things … and then tweak things accordingly, to allow for inflation and changes in revenues … (and, no, there’s nothing sacred about 2006’s budget – but it *was* passed by a more rational Congress who only spent like drunken sailors, not like the current Congressional leaders who seem dedicated to spending other folk’s money like drunken sailors several days into a crystal-meth bender !) …
Given that there is by no means a solid consensus among nonpartisan experts and assorted knowledgable folks that the “past couple of years’ effort [have been] a failure” — some of them do think that, while others think the efforts have prevented us from going into an black hole (as they think we would’ve if nothing had been done) but haven’t been strong enough to actually push us away from the event horizon, and still others think something in between — it’s not clear why the Dems would be expected to “simply ‘fess up” to this (non-)fact.
Likewise, given that mainstream macroeconomic theory holds that a sudden return to 2006 budget would have a drastic depressive effect on the already fragile economy, in precisely the same way that you’re describing re: the tax cuts but even more severe, it’s not clear why that should be adopted as a test of being “even vaguely serious.”
Obviously, liberals and conservatives fundamentally disagree about the best way to stimulate the economy. Unfortunately, because it is impossible to conduct controlled scientific experiments with something as complex as the U.S. economy (too many variables, too much possibility of disagreement about just what is causing a given result), it’s difficult for anyone to prove proven “right” or “wrong,” so the disagreements continue. But there are philosophical differences, and then there are math problems. The budget deficit is a math problem, and it cannot be solved — it cannot even be improved — in the manner suggested by the Republicans in this document. Therefore, again, this document is simply a fraud.
More broadly…
There is room for legitimate disagreement about how much we should cut our budget deficit in the short-term. This applies (with various nuances) to both the Bush tax cut debate and to the debate over immediate spending freezes, budget rollbacks and so forth. Mainstream economic theory says this sort of thing (generally speaking) is a terrible idea, as it will make the economy even worse, potentially lead to a deflationary spiral, etc. But there are plenty of intelligent dissenters on that point. Reasonable people can reasonably take different positions on this issue.
There is, on the other hand, seemingly no room for legitimate disagreement that we MUST find ways to substantially cut our budget deficit in the medium- and long-term. It absolutely has to be done, period, full stop, end of discussion. And it can’t be done without a combination of painful spending cuts AND significant tax cuts (hopefully ones that are carefully targeted to minimize impact on growth). Like I said, this not a philosophical disagreement; it’s a math problem. And it only has one solution: the deficit MUST be cut in the medium- and long-term, and this MUST involve both spending cuts and tax hikes, otherwise it can’t be done; the numbers are too huge.
The GOP “Pledge,” at best, cuts the deficit somewhat in the short term (a policy whose merits are debatable), while making things worse in the long term (which is indisputably bad). As such, the Republicans have it precisely backwards.
The Democrats, meanwhile, think short-term deficit cutting is a bad idea — a debatable but defensible position — and as for medium- and long-term, well, they’re pretty terrible… but not as terrible as the Republicans.
In short, we’re fucked.
Brendan – I’m curious …
What is the fiscal problem with taking pretty much all the assorted NEW spending stuff added in the current Congress and cutting that ? Including the token gesture, yet a gesture nonetheless, of any Capitol Hill pay increases during that period ? Start by ‘cutting’ the deficit from $1 Trilion plus, back to something less than $0.5 Trillion … just as a start, until some better ideas can be agreed-upon ?
The problem, Alasdair, is that “the assorted NEW spending stuff” isn’t just stuff, nor is it just numbers. It’s actual spending on specific line items that have specific impacts, both on people’s lives, and on the economy.
For instance, expanded unemployment benefits — without those, the long-term unemployed, unable to find work despite their best efforts because the jobs simply aren’t there right now, would see their spending power decrease even further than it already has, thus further depressing consumer spending, increasing the rate of foreclosures, etc. Not to mention the humanitarian side of things.
Also, aid to the states. Without that particular example of “NEW spending stuff,” the states would be gutting their budgets even more (I originally meant to say “cutting,” not “gutting,” but my typo was actually perfect, and I’m leaving it), thus necessitating the elimination of all sorts of economically stimulative “stuff” — direct payments to individuals, tax breaks and incentives to business, etc. etc. — and thereby hurting the economy further. And again, there’s the humanitarian side, too, but I’m trying to focus just on the bottom line here.
Those are just two examples off the top of my head. There are countless more. The point is that the federal government isn’t just throwing money down a hole, despite what you and The Onion might believe; it’s actually spending money on specific things, many of them designed very specifically to help (or prevent further harm to) the economy, others of them having that as a positive side-effect. (And others, doubtless, that aren’t doing that at all… which is why the GOP needs to call for specific cuts, not just “across-the-board cuts,” which means everything a nothing.)
Eliminate all of the spending above 2006 levels, and you eliminate all of those positive effects. It’s not just numbers on a spreadsheet, nor is it just amorphous “programs” (a term which is always envisioned as meaning “useless money-sinks that serve only liberal-do-gooder humanitarian purposes, like helping people who are poor and irresponsible”). Spending cuts, improperly targeted, can significantly damage the economy — that fact isn’t even debatable. (How this damage compares to the alternatives, or how to “properly target” the cuts, is debatable, of course.)
And of course, if the economy worsens, we double-dip, we go into a deflationary spiral, etc., that means tax revenue decreases further (the extent to which it has already decreased is, incidentally, a big part of the recent increases in deficits — it’s not just new spending, it’s also reduced revenue because of the recession), so we potentially cut off our nose to spite our face.
P.S. I see no economic problem with cutting congressional/staff salaries, nor do I see any tangible benefit. I don’t want “gestures” to mollify the masses. I want an actual plan of action.
If you believe Krugman’s dire predictions, the downside is that the pledge will result in an extra $70 billion a year over ten years added to the deficit compared to the Obama budget. That is chicken feed. The upside Krugman doesn’t mention is that it will provide the stability and predictability business needs to invest and expand. The biggest problem in our economy right now is that business and industry is afraid to invest and expand, because they have no idea what kooky tax or regulation is going to show up next. The basic problem is that no one trusts the Democrats not to screw them over.
“The biggest problem in our economy right now is that business and industry is afraid to invest and expand, because they have no idea what kooky tax or regulation is going to show up next.”
They also don’t know if a gaint meteor is going to strike the earth next month or if Jesus will return for the rapture. You act as if Obama has threatened new taxes on buisnesses or passed some allready that no one was expecting. Its right up there with the idea that Obama is going to come take your guns. No matter how many times you repeat it to yourself it doesn’t make it true.
Not to mention the fact that the Pledge plan would create an increase in the deficit of $1.5 trillion above Obamas plan over the next 10 years. Thats not $70 billion a year its $150 billion a year.
Regardless its still an INCREASE in the deficit, not a decrease. Once again, as Brendan points out, the Republicans aren’t offering an actual plan, they are offering platitudes and window dressing while not doing anything to address the fundemental problems.
Not to mention they want to continue to cut taxes for the top earners who don’t currently pay their fair share of the tax burden in this country (hint, top 20% of earners control about 84% of the wealth and pay only 65% of the tax burden).
I don’t want to send this discussion on a huge tangent, but it has occured to me that there’s a disconnent between the left’s claim that people are unemployed for two years because there are absolutely no jobs available, and that we need illegal immigrants because they will do work that Americans simply won’t do. You can’t have it both ways. If the unemployed only unemployed because there aren’t any jobs at any (legal) wage that they can take, then illegals must be taking away jobs from Americans. If the illegals are doing jobs that American’s won’t do, then that means that there are jobs that the unemployed aren’t taking, either because they’re holding out for a better wage, or because they have specific fields in which they will and will not work.
I’ll admit I haven’t read “the pledge” for basically the same reasons that I don’t read party platforms: they’re longer than my attention span will allow, politically unrealistic, and full of poll tested fluff. Are the Republicans promising to balance the budget by 2020, or is that some test that the liberals you cited have thrown up to attack the document? Given the political realities that we face, it’s not as if the GOP can actually implement any of this unilaterally, so I don’t really think it’s worth getting so outraged over. It’s certainly no more outrageous than Obama’s claim that we need to tax the carbon output of power plants and factories (cap and trade) in order to reduce our dependence on foreign oil (newsflash: power plants and factories use coal, natural gas, and uranium, not crude oil). Or that we need to pass cap and trade in order to create jobs (as if doubling the price of energy will make us more competitive, not less, versus China, Mexico, etc.). Or how about the whopper that Obamacare would make reduce the cost of health care? Yeah, you’re going mandate more coverage of illnesses, remove liability caps, BUT you’re not going to increase premiums.
I don’t think we need to balance the budget immediately, by 2020, or some other random point in time. At some point in the recent past, we were able to run $300B-$500B deficits with the FAA, Medicaid, DHS, etc. and the existing tax code in place. It would therefore stand to reason that if we eliminated the incremental spending and programs since the mid 2000s we would be able to run at these deficit levels again without eliminating everything but SS, Medicare, Veteran’s, etc. as the economy improves. For that matter, we should be able to do much better since the government can now brorrow for the LT at 3% AND we have reduced our activity in Iraq. So it would seem to me that in a recovery scenario, we should be able to run deficits closer to $200B with the current tax code in place. That would be about 1.4% of GDP which is sustainable and I think would be a marked improvement. In fact, if we can reduce the deficit to around $200B-$250B or so annually, we should be able to shrink the national debt as a percentage of GDP. Now I know Brendan would argue that such an approach will push us into a double dip recession, but as he chartiably mentioned elsewhere, such a point can be debated amongst honest and intelligent people. Therefore I don’t think it’s dishonest or invalid to argue that we can keep the Bush tax rates and return to at least a sustainable deficit level, without eliminating the FAA, DHS, etc.
On another point you made, the first place that I would cut is the extra aid to states (aka the public employee union bailout and political payback fund). In my opinion, these state payments basically rewarded public employee unions and the irresponsible state and local politicians who colluded to create unsustainable state and local spending levels. States have been just as irresponsible as the Federal Government and the sooner they correct their paths, reform their workforces, and readjust their pensions, the better. This stuff needs to be done anyways, it’s best that it be done now rather than letting the problems grow. Although I don’t have a comprehensive state-by-state study of what’s needed to address the problems, the things that I’ve heard that are being taken seem fairly manageable and reasonable. For example, in NJ Chris Christy is asking teachers to contribute 1.5% of their salaries to help pay for their health care plans and is asking for a salary freeze for the next 2 years. The layoffs that I’m hearing about are in the low single digits percentage wise. Now the unions think that these demands are the most inhumane thing since the Nazi gas chambers closed down, but I think to those of us in the private sector, they sound downright cushy.
BTW I agree with your Brendan that we are, indeed, f*cked. However, I do disagree that somehow the Republicans are worse than the Democrats. If the chief fiscal sin of the GOP is that want to “spend” $700B over 10 years on the uppper class Bush tax cuts, well, Obama spent (not in quotations, because he really did spend it) $790B on Porkulus over the course of basically 2 years. Then, Obama decided to spend another $900B over 10 years (but really over 7 years since most of the expensive provisions are delayed) on Obamacare. Now you can say that the Porkulus/stimulus and Obamacare were both good policy and worth every penny, but then we’re getting into debates over economics and health care policy, not fiscal rectitude.
Secondly as long as we are screwed, I’d rather be screwed and taxed less than screwed and taxed more.
1.) OMG, someone wants to extend a Bush policy! We’re doomed, we’re doomed! Oh, no, wait–the American people are about to make it pretty freakin’ clear they don’t like being taxed for a $1 trillion Political Ally Swag Bag Fun. Liberals are as funny as Conservatives…everyone squeals when their ox is getting gored.
2.) Entitlements (a.k.a., the Third Rail, “Non-Discretionary Funding”) is the biggest part of the budget. I’m pretty sure I could cut welfare, make everyone under 45 no longer part of Social Security, and a bunch of other Draconian cuts and we could balance the budget rather quickly. Painful? Certainly, but this is a “do it now (hard) or get the 30-inch thick wood pole someplace you really don’t want it later (harder)”-situation. When the government is rounding up womenfolk to give to China to pay off our debt, you better hope they forget you have two daughters (i.e., can spare one according to some idiotic bureaucrat).
3.) All this being said, I’ve thought _both_ parties were pretty unserious for awhile. Just sayin’.
You act as if Obama has threatened new taxes on buisnesses or passed some allready that no one was expecting.
Promised? Cap and trade. A huge carbon tax on all energy.
Passed already that no one was expecting? How about the requirement to file a 1099 on anyone you do more than $600 a year with? That is a huge expense for small businesses. (notice I said taxes and regulations)
Not to mention they want to continue to cut taxes for the top earners who don’t currently pay their fair share of the tax burden in this country
How about all the people who pay no taxes, or worse get a “refund” check from the government even though they don’t pay any taxes……is that fair?
We are fast approaching the point where more than half of all people will pay no taxes at all….not only is that not fair, it is a recipe for disaster.
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This is “Heads-I-win,-tails-you-lose” analysis of the worst kind. The Democrats, as desperate as they are, are already without shame resorting to their 70+ year-old trope that Republicans want to dismantle Social Security and Medicare. Everyone knows that entitlement spending will drive the bulk of the deficits the next few decades, so if the Pledge document came out and said, “We will fix entitlements and keep spending under control including for seniors, veterans, and military”, I can tell you exactly what the Dem ads would look like this October-November, and the Republicans for sure would lose a few seats they otherwise have a solid chance of winning. Instead, the Republicans write a more election-appropriate piece of fluff, and the righteous indignant wrath of Krugman-Sullivan-Loy comes frothing out.
I’m sorry Brendan, but the goal of the Republicans is to win seats, not appease their ideological opponents. There is policy, and there is politics. The Pledge is about good politics, not good policy — and this is as it should be. In some alternate universe, it might be possible to have something that is legitimately both, but outside of the Contract With America, I have yet to ever see such a thing come from either side of the aisle.
I just found this footage of David K relaxing in deep thought prior to posting #1 above …