Yesterday I grumbled over lunch about the misnamed Super Committee sitting around watching football instead of taking action to curb the deficit. An eager reader points out that, if we're really worried about the deficit above everything else, a do-nothing Congress might be the best thing we could hope for.
The Center on Budget and Policy Priorities calculates that, in addition to the automatic $1.2 trillion in across-the-board budget cuts (the dreaded "sequestration") triggered by the Super Committee's failure, we will save another $5.9 trillion if Congress sits on its hands and lets expire a number of costly tax cuts and other provisions. If Congress keeps drinking beer and watching the tube, we will see the yearly federal budget deficit cut from hundreds of billions to tens of billions by 2015.
CBPP's James Horney thinks that pouring all of those savings-through-inaction into deficit reduction is bad policy. However, he prefers it to unbalanced Republican "compromises" that would demand the most sacrifice from those least able to bear it.
I hesitate to give a balky Congress cover with the Thoreauian zen of "That government is best which governs least." (I prefer the response from Robert M. Hutchins: "That government is best which governs best.") And I challenge any incumbent to turn "We failed!" into an effective campaign slogan.
But in this case, by failing to act, Congress may actually make more progress in reducing the deficit than by acting.
Sad, isn't it? But sadder yet that any action the congress takes seems to poke another hole in the ship rather than bail it out.
Yes, I've been thinking this could be the Obama strategy for quite some time. If Congress can't do better than this, veto everything. He hinted at doing this just the other day. Now, if he was REALLY smart, he would pull out his chart, explain it, and say "Okay here it is, kids, show me a better idea. If not, this is my economic policy. I got your veto pen right here, homies. Any questions?"
Bill, you would recast Barack Obama as the black Ross Perot. Hmm... might not be so bad!
It's the only card the wing-nuts have left him to play, seems to me, Cory. No drama, Obama. He doesn't even have to sign anything. Just use the pocket veto. Have congress send the bills over to the Whitehouse and let them pile up in the corner. Could be a winning strategy.
...and we all thought Putin was the judo master. Obama, too, appears to know how to let his opponents' weight do all the work.
When they tried and failed to get a budget that would work, Obama said with a smirk about the super committee, I did not want to do it this way. Well yeah, it would be better to be honest about the cuts we are making, but if the committee fails means automatic cuts that no one then will be responsible for. They can make cuts without making voters mad about their special program and they can cut the military without their military industrial complex cutting their donations to the congresspeople. Smooth move that was never intended to succeed. I also know two people who retired from Washington the last ten years who say that it is no longer a matter of who is paying off the Senators, but who is bullying them to vote for spending. No one gets blamed if the super committee fails with set cuts if it fails.
If you go back and read through the record when they were debating the ending date for the Bush tax cuts you will see that the agreement was that they should end and that is what they signed into law.
Funny, that Grover Norquist either didn't see that. Or did he?
Let them expire and go back to square one and then if they want to make changes, have them debate it in the public square.
King Obama! A king that lowers his head in reverence to other kings. This will be a test for a checks and balance government. It is time for the House to again read the Declaration of Independence and U.S. Constitution in chambers and share history why those documents came about.
So the plan is to let tax cuts expire to populate the black hole instead of deploying a best practices government to reduce the deficit.
Oh Bruce, grow up!
So what did you say when Bush kissed our Saudi energy overlords right smack on the lips (I don't believe there were any tongues) and then walked around the ranch holding hands? Who knows what happened when the cameras weren't rolling.
So why not let the tax cuts expire as the Republican Congress and President intended when they sold it to the American people and signed it into law? (You don't think they were lying to us when they made them 'temporary' do you?) And who says that we can't make some cuts that add greater financial sense and stability without gutting the economy?
I likely said, "Hey Baby!" Calling to my wife, "Come check this out!" The news described the activity as a sign of respect and friendship.
I suppose some accept that a U.S. President bow without reciprocation by the other. Does a sovereign submit to his subject?
Well, I suppose those cuts briefly became Obama's. They were Bush's but held to ten years to get Senate (D) votes.
Help me understand your last sentence.
Merry Holidays
(Oh, Bruce, let's stay on topic. The bowing thing is silly. Has President Obama ever given any substantive policy signal that he considers himself or America subject to these foreign sovereign? Call me when President Obama hands a foreign king the nuclear football or declines to oppose a military invasion.)
Yeah, Okay. The point is this in a checks and balance government it troubles me that Obama (or any U.S. president) gives more due to foreign sovereigns than citizen representatives. For me it's like giving XL the green light to invoke eminent domain over my citizen neighbors along the pipeline.
I don't like the idea of playing radio active football with Iran. And China is connected to our debt while it pirates and manipulates.
I don't think it is lost on Republicans that "expiration" means comporting with previous law. Republicans got stuck with looking like they serve the rich while Democrats look like they serve the Black Hole. I don't mind funding government but not bloating waste. Everyone should put some skin in without loop holes.
Should Americans be satisfied with Clinton level taxes? According to the graph big government spending bureaucrats would likely love it. I doubt Soros or Buffet will pay more because of loop holes. But what about now, the current. Should congress take another look at Simpson Bowles?
By the way, the do nothing congress fits Rick Perry's plan to make congress part-time. Do I see an endorsement here. I should have said only this at left it at that.
Oh, nuts to that, Bruce. Are you saying you'd be happy if President Obama literally bowed to every American he met, even though that particular form of greeting is not a cultural norm here? Your point is vaguely symbolic at best. Obama's bows have little to nothing to do with the actual respect he shows to American citizens by trying to improve health care, spread the tax burden fairly, protect the safety net, bring troops home from overseas, etc. If I want to indict any of the President's bad policies (torture, warrantless wiretaps, continued war in Afghanistan), I don't need to confuse people with the empty issue of ceremonial greetings.
Waste: show me that the deficit is a product of bloating waste, and I'll happily hack it all away. Unfortunately, that's not the case. Balancing the budget means giving up very useful and desirable programs.
Skin in the game: low-income folks already have plenty of skin the game with their regressive local sales and property taxes, plus the fees they pay to drive, hunt, camp, etc.
Americans would certainly be happy with the Clinton-level unemployment and economic growth that accompanied Clinton-level taxes.
No, no endorsement of Rick Perry. Even a do-less federal government needs intelligent, competent leaders.
Waste: Bridge to nowhere, Solyndra, duplicate services, $16 muffins, UN contributions, ethanol subsidies, unbalanced budgets to name a few.
Skin: Cain back tracked on his 999 plan because of local, state and federal skin. If he were elected President the nation would likely debate the 999 balancing act and walk away unsatisfied as now without the plan. Yet this is another reason why we need a simplified tax plan and best government expenditure practices leading toward a balanced budget. The current answer seems to be spend, spend, spend and print money.
You said, "Balancing the budget means giving up very useful and desirable programs." Make that statement to your blogosphere list for debate, it is that revealing. Another thought, how does the the Law of Inertia reveal itself in political/financial debate?
If this country ate as much turkey as its government spends we would never recover from turkey coma.
Krauthammer nails it. Comments on Simpson Bowles
http://www.washingtonpost.com/opinions/the-grover-norquist-tax-myth/2011/11/23/gIQAsuJhtN_story.html
I would point out that this is what happens with the restoration of the Bush tax cuts AND sequestration. The only reason that the sequester is in the picture is because Republicans prevented the President and his party in Congress from ignoring the deficit.
I would also point out that this is only a small slice of CBO budget projections. After 2021, federal spending will commence an inexorable rise that will always stay well ahead of revenues even if revenues rise to historically unprecedented levels. That is is not a prediction, it is simply a project based on current laws.
The chart presented above is merely a way of ignoring reality as long as possible. How's that working out for Europe?
Ken, I'll certainly agree that there are actions Congress could take that would bend that curve even lower for a longer period of time. But whatever doom impends after 2021, the actions represented in the top curve would appear to make that doom more swift and crushing. The inaction producing the bottom curve appears to give us a little more time to elect a Congress capable of crafting solutions or to stage a revolution (whichever is easier).
KB has a hard time with chicken/egg cause/effect type problems I notice. Apparently he doesn't think the Bush tax cuts, combined with two unfunded wars, an unfunded medicare handout to Big Pharma and the bailout of Wall Street had anything to do deficit.
Obama has been talking about cutting spending since his first campaign.
But when you're in the middle of a heart attack, it's not exactly the right time to be worrying about how much the defibrillator and the triple bypass is going to set you back, or how much you've been spending on Big Macs with fries the last 10 years.
Cory: I love your comment. You "agree that there are actions Congress could take that would bend that curve even lower for a longer period of time. " If I wanted to make the fiscal solvency of the U.S. look like a mere afterthought, that's how I would put it.
You say "whatever doom impends after 2021, the actions represented in the top curve would appear to make that doom more swift and crushing. " No, they don't. The bottom curve depends on Congress keeping all its promises including the sequester. Keeping fiscally responsible promises is something Congress is very bad at. Remember the Doctor's fix?
Even if the bottom curve is actually followed, it represents a very temporary blip in the long-term projections of the CBO. Given current law, federal spending will rise precipitously after 2021, faster than revenue can hope to keep up with. 2021 is only ten years away. Have you been paying any attention to the disaster playing out in Europe? Is it not terribly irresponsible to advocate doing nothing just because you like the idea of tax increases?
Contrary to what Bill says, I have frequently stated I am in favor of letting the Bush tax cuts expire. It is stupid to think that that will solve the problem we face.
I like Bill's metaphor. Yes, when someone has a heart attack, a diet is not the first line of therapy. On the other hand, encouraging the sufferer to eat a lot of big macs right now, Bill's preferred solution, is not medically or economically indicated.