Freedom New Mexico
This isn’t time to go wobbly. Republicans in the House of Representatives need to maintain their discipline of standing firm against any tax increases in a deficit-reduction bill. The “Cut, Cap and Balance” bill the House approved Tuesday likely will stall in the Senate. But it provides the basis of a budget solution before the Aug. 2 deadline to raise the debt ceiling above the $14.29 trillion current limit.
“Cut, Cap and Balance” means cutting spending $5.8 trillion over 10 years, capping spending and passing a balanced-budget amendment to the Constitution. The House GOP plan is moving in the right direction. And given that a balanced-budget amendment, even if passed by Congress, would take years to be ratified by the states, it could be thrown out in negotiations.
The problem is that Senate Republicans are not united with their House colleagues, Michael Tanner told us; he’s a budget affairs expert at the libertarian Cato Institute. The intraparty division “loses any sort of setting up a clean confrontation” between Republicans in Congress and President Barack Obama, he warned. The president insists on a combination of tax increases and budget cuts.
Tanner said the action in the Senate is focused on the “Gang of Six” senators, made up of three Republicans and three Democrats and led by Kent Conrad, D-N.D., and Tom Coburn, R-Okla. They propose reducing the deficit by $4 trillion over the next decade, including $3 trillion in spending reductions and $1 trillion in tax increases from closing tax loopholes. The Associated Press reported Tuesday that Obama backed the proposal and said it’s time for leaders in Congress “to start talking turkey.”
Tanner said the Gang of Six plan “has some good things in it, and some bad things in it. They’re trading tax increases now for spending cuts later.”
A current Congress, however, cannot limit what a future Congress can do. Tanner pointed out, as we have, that similar deals by President Ronald Reagan in 1982 and the President George H.W. Bush in 1991 ended up with all the tax increases imposed but few of the spending cuts. “The spending cuts never seem to happen,” Tanner observed. As we’ve said, we’re open to closing loopholes — but only as part of comprehensive tax reform that includes tax rate reductions, something not being considered.
He added that the Gang of Six plan really doesn’t cap entitlement spending on Social Security and Medicare, the biggest spending items. “Then you’re really not controlling spending,” he said.
A few weeks ago, Republicans in the California Legislature — of all places — stood firm against tax increases demanded by Democratic Gov. Jerry Brown, who warned that inaction would bring “Armageddon.” California did not slide into the Pacific Ocean; more budget cuts were made.
Gov. Brown was forced to blink. So, too, will President Obama blink if the House GOP stays solid against tax increases and offers a rational alternative.
The Gang of Six plan really doesn’t cap entitlement spending on Social Security and Medicare, the biggest spending items.