Many Republicans want to use the excuse of the deficit to make draconian cuts in "entitlements." It's ideological. It's not sensible. It's not acceptable. Of course, ideologies that set out to punish others aren't meant to be any of those things They're often just quirks of psychology, character and group identification. The sooner their advocates are confined to the loony-bin, the better.
That said, let's move away from the sour air within both houses of Congress and in the studios of rightwing talk shows and breathe something healthy for a change. Economists and some policy-makers are assuring us that economic growth "could still make an enormous difference." In other words, we need to hold two thoughts at the same time: spending cuts and growth. A second bi-partisan deficit-cutting proposal will come out today, one that strongly advocates focusing on growth. The Times' David Leonhardt reports.
If the economy grew one half of a percentage point faster than forecast each year over the next two decades — no easy feat, to be fair — the country would have to do roughly 40 to 50 percent less deficit-cutting than it now appears, based on my reading of budget data from the economists Alan Auerbach and William Gale. ...If growth were a half point faster than expected, the needed savings would instead drop to less than $700 billion. That would mean many fewer painful choices, be they tax increases or Medicare cuts.
Can't you just feel the discomfort of the deficit hawks? Fewer painful choices? No. They want pain. For others. Republican discomfort grows by leaps and bounds when told we need to spend more now, not less.
In the short term, we should actually spend more. “Some politicians and economists present a false choice: reduce unemployment or stabilize the debt,” argues a new bipartisan deficit plan that will be released Wednesday, the second such plan to come out in the last week. As Alice Rivlin, a Democrat who oversaw the writing of the plan with Pete Domenici, a Republican, put it: “We can do both. We can put money in people’s pockets in the short run and trim government spending in the long run.”
The key is focusing long term as well as short term growth. Cut spending very judiciously.
A good deficit plan doesn’t simply make across-the-board cuts for years on end. It cuts funding for programs that do not spur economic growth and increases funding for those relatively few that do. Likewise, it raises tax rates that do not have a clear record of promoting growth and cuts those that do.
This task is not an easy one, because advocates and lobbyists inevitably claim that their idea, whatever it is, will help the larger economy. Just look at farm subsidies, a form of welfare for agribusiness that is supposedly crucial to the American economy. Or look at President George W. Bush’s tax cuts, which, after being sold as an economic elixir, were followed by the slowest decade of growth since before World War II. ...David Leonhardt, NYT
That's just another mistake George W. Bush didn't own up to.
I'd call America's mean minority -- the Republicans who like to make sure people they regard as "undeserving" are punished with poverty and indifference -- pretty damn loony. If you belong to that loony group, you'll never like the idea of getting rid of the deficit by focusing on growth. A bigger pie is no remedy for anyone who believes the ill, the poor, the disabled, and the unfortunate don't deserve the chance to live as well as the fortunate do.
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The Rivlin-Domenici bipartisan proposal is discussed here by its authors. Excerpt:
We would strengthen Social Security so it can pay benefits for the next 75 years by gradually raising the amount of wages subject to payroll taxes; slightly reducing the growth in benefits for the top 25 percent of beneficiaries; raising the minimum benefit for long-term, low-wage workers; indexing benefits to life expectancy; and changing the calculation of cost-of-living adjustments to better reflect inflation. We would not raise the age at which senior citizens can begin receiving benefits.
We would control health-care costs - the biggest driver of long-term deficits - by reforming Medicare and Medicaid while, starting in 2018, capping and then phasing out the tax exclusion for employer-provided health care. We would reform medical malpractice laws and help address the health costs tied to rising obesity by imposing a tax on high-calorie sodas.
We would freeze domestic discretionary spending for four years and defense spending for five, both at 2011 levels, and then limit their future growth to the rate of growth in the economy.
Finally, we would cap domestic and defense discretionary spending (with tight exceptions for true emergencies) and trigger across-the-board cuts if the caps are breached...
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Maureen Dowd describes the meeting of Bush and "a gaunt" Cheney yesterday at a ground-breaking in Dallas.
Together again were the president and vice president who invaded, deregulated, overspent, created a climate of fear and intensified the class divide with tax cuts — all so recklessly that our resources are sapped just as we need to step up and compete with our banker, China.
“I wasn’t a very good economic prognosticator,” Bush told CNN’s Candy Crowley. No kidding.
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Cutting earmarks won't do the trick either. The truth about earmarks is that Democrats have done better eliminating the worst of them and the tea party movement has been using earmarks to underline their own economic ignorance.
Blaming earmarks for the country’s fiscal ills has been a favorite Tea Party talking point and a way to avoid a more serious discussion of the real mix of difficult spending cuts and tax increases that are the only way to dig the country out of this hole. ...
...Earmarks are used to allocate a small fraction of already approved spending amounts. If the earmark disappears, the money for it goes back into the spending pot to be distributed by the federal or state bureaucracy instead of by lawmakers. Many of these projects are needed. If lawmakers cannot do so responsibly, someone else will have to decide which lock and dam on the Mississippi will be repaired, which highway extension will be built, which military base will get new housing.
The reforms put in place by House Democrats in recent years have already eliminated some of the worst practices. Secret earmarks, which made it impossible to know which member had requested particularly egregious items, are now banned. All House members are now required to post their requests on the Web where voters can judge for themselves whether the spending is outrageous or useful. House members also have to certify that they have no financial interest in an earmark, and spending cannot be directed to for-profit enterprises.
The Senate should embrace the same transparency. ...NYT
