Budget Battling Bingo

July 17, 2011

Budget Battle Bingo
We’ve learned at least two things as Congress and the president stumble
and fumble raising the debt ceiling and creating a budget.
First, it appears President Obama is actually willing to take a crack at
changing both Social Security and Medicare. At the very least, he is at
least willing to discuss it.
Second, House Republicans aren’t willing to meet the president halfway, or
a quarter of the way, or even an inch of the way when it comes to
increasing revenues. They’ve decided that pretty much anything and
everything that increases the amount the feds take in is a tax increase.
Allow a temporary tax to expire and that’s a tax increase. Close even the
most egregious tax loopholes through which large corporations drive
truckloads of tax-free cash and that’s a tax increase. Increase the tax
rate on the richest 5% of Americans and that really is a tax increase.
Their new rallying cry, one supposes straight from their most recent push
polls, is they must save the “job creators” from any additional tax
burden.
Of course, those job creators have been absent any such new taxation for
the last couple of years and have done precious little to create new jobs.
They’ve been profitable, they’ve stockpiled cash in the trillions, they’ve
enjoyed the full array of tax breaks and shelters and still they
won’t hire.
It is peculiar that a president often accused of wanting to do nothing
more than expand the federal government has proposed budget reductions of
more than $4 trillion over the next decade while his self-proclaimed
budget slashing Republican adversaries slinked in at about $2.7 trillion.
Speaker John Boehner said they should aim for an even “less ambitious”
number than that.
The President has proposed significant cuts in discretionary spending
including farm subsidies and foreign aid and cuts in defense spending. He
has also suggested he would not be opposed to increasing the Medicare
eligibility age and changing the method by which inflation is figured for
future Social Security cost of living adjustments.
(The president has, not as was widely reported, suggested cutting Social
Security benefits. His idea would reduce the amount of potential annual
increases but the basic benefit would remain unchanged.)
Republicans, still enamored of Paul Ryan’s budget plan, have proposed cuts
aplenty and a new Medicare system involving private insurance. They
refuse to even consider any tax increase for anybody. They’ve already
rejected, out of hand, allowing the so-called Bush tax cuts to expire
though doing so would raise a bit more than $3.6 trillion over the next
decade. They’ve also rejected a return to the tax rates that existed
during the Clinton presidency though that would raise about $3.9 trillion
in the next decade.
Actually, this is a two act drama both sides have insisted on combining
into a single mess.
The first act is raising the debt ceiling by August 2, which requires an
act of Congress. Failure to do so would result in the United States
defaulting on existing debt obligations and destroy our credit, making
borrowing impossible. It would be a very bad thing.
The second act is the creation of a budget.
For reasons that make little sense, both sides have decided they will not do
one without the other,
wildly complicating the process. Congress won’t raise the debt ceiling
absent a budget proposal and the president won’t approve a budget unless
the debt ceiling is raised.
We have intransigent Republicans refusing to even consider any proposal
that includes tax increases, intransigent Democrats unwilling to look at
changes to either Social Security or Medicare and a third group of tea
party acolytes who think it would be just swell if we defaulted on our
obligations and created a budget calamity.
Is this fun or what?
To be fair, President Obama has taken an enormous political risk by even
suggesting that Medicare and Social Security, both of which are sacrosanct
to Democrats, be on the table. And Speaker Boehner gives every indication
of someone who wants desperately to work with the president but is
completely hamstrung by his own party.
The result of all of this, so far, has been absolutely nothing. There is
no deal in place to raise the debt ceiling and there is no budget. The
hardcore left and the hardcore right, neither of which represent anywhere
near a majority of their own party much less the country, now get to hold
the rest of us hostage.
Those on the right fringes claim voters in 2010 made it clear they want
no new taxes and those on the left fringes claim voters in 2010 said
they wanted our two gigantic entitlement programs left alone.
Both sides are wrong, of course.
2010 was not a referendum on a tax increase for the richest 5% of
Americans. “Protecting really rich people from a tax increase” did not
show up in the exit polls as a reason people voted the way they did. Nor
were Social Security or Medicare front and center in 2010.
But now, unfortunately, the 2012 elections have begun and common sense is
no longer welcome in any debate about anything. Far better to disparage
potential opponents, refuse any hint of compromise and then blame someone
else for the resulting failures.
If you think the discussion on important issues facing us is going to
improve in the next 16 months, you are sadly mistaken. If, on the other
hand, you think we’re likely to see more accusations, more insults,
another budget mess and few results... bingo.