As the SuperCommittee heads toward an inevitable train wreck
(the deadline is soon, and there’s been no significant movement),
the hand-wringing over who to blame has started. And, predictably,
Politico
comes rushing to the defense of Democrats, claiming that
Republicans need an “arithmetic lesson.”
[T]he data highlights what’s also become the great
arithmetic lesson for the GOP: Even if spending were frozen in
place, the nation’s debt keeps piling up, absent more
structural benefit reforms and tax revenue.
Emphasis mine, because that’s an awfully massive caveat to put
into their “arithmetic” calculations. “Structural benefit reforms,”
of course, amount to spending cuts. So Politico is accusing
Republicans of being unable to close the deficit if they’re not
allowed to cut the most expensive programs. Good show.
To be sure, there are Republicans who pretend that the deficit
can be eliminated with only cuts to “waste, fraud and abuse” and
(the most popular spending cut) foreign aid. But those people are
few and far between - and the GOP’s top budget cutter, Paul Ryan,
takes bold and politically-risky steps to go after those
“structural benefit reforms.”
As far as the CBO goes? Tax revenues have been dramatically down
in recent years, but it’s because of the recession. Tax revenue
totaled 14.9 percent of GDP in 2010, but absent any major tax hikes
- the CBO’s “alternative fiscal scenario” envisions an extension of
the Bush tax cuts for all but the highest income-earners - tax
revenue will rebound to 18.6 percent of GDP in 2020. And as far as
a “cuts only” approach goes? We’d only have to get spending as a
portion of GDP down to what it was in the last year of the Clinton
administration, when it was at 18.4% of GDP.
It would be extremely difficult to do that, due to the
exploding entitlement state. But cutting government spending to a
point at which the U.S.’ projected tax revenue doesn’t put us back
in the stone ages as far as the federal government goes. We’d be
looking at a government about the size that it was in the Clinton
era.
Moving on, Politico also notes Democrats’ “demands” in exchange
for big cuts.
There remains bipartisan support for tax reform — which
promises to generate revenue by simplifying the Tax Code and
lowering rates — but Democrats want more of a concrete “down
payment” up front for deficit reduction.
“Down payments up front” would be a favorite demand for
Democrats. In past deals in which tax hikes were exchanged for
spending cuts, tax hikes have the advantage of taking place
immediately, while spending cuts tend to disappear in later
sessions of Congress. Americans for Tax Reform found
that
In 1990, President George H.W. Bush was promised $2 in
spending cuts for every $1 in tax hikes by Congressional Democrats.
That’s not what happened… Not only did the $274 billion in
promised baseline spending cuts never materialize—baseline
spending was actually $22 billion higher than what CBO projected it
would be before the deal.
Long story short - the budget is a lot more than just a matter
of arithmetic, the SuperCommittee is likely to be a bust, and it’s
really, really hard to cut spending.
