Posted on 10/16/2017 9:40:17 AM PDT by SeekAndFind
Diane Blacks political problem conservatives political problem is Americas political problem: Tax cuts are popular, and spending cuts are not.
Representative Black (R., Tenn.) has been chairman of the House Budget Committee for about a year, and shes enjoyed the experience so much that shes . . . trying to get the hell out of Washington, hoping to head to Nashville as Tennessees next governor. (She declined to comment on the gubernatorial race.) It is difficult to blame her for not wanting to cling to that gavel: Running the House Budget Committee is kind of a stupid job.
Not that its an unimportant job far from it: In fact, it is a critically important post. A few years ago, I was invited to speak to a group of Republicans on the House Budget Committee, and I told them as plainly as I could that the decisions made by their panel and its Senate counterpart over the next several years would very likely mean the difference between a relatively manageable national fiscal crisis at some point in the future and an uncontrollable national fiscal catastrophe with worldwide consequences. I also told them that I was not entirely confident that theyd make the right choices. I wasnt invited back.
Getting fiscal policy right is should be a top-tier priority. But the congressional budget committees are, strangely enough, a frustrating base of operations for doing that.
The problem for fiscal hawks on the budget committees is that the budget covers only about one-third of all federal spending, the discretionary outlays, which are subject to the appropriations process. The other two-thirds of the budget is so-called mandatory spending: Social Security, Medicare and other entitlements, farm programs, interest on the debt, etc. Entitlements are called entitlements because, under the law, recipients are legally entitled to certain benefits as determined by statute. Congressional budget writers cannot simply knock 5 percent off of Social Security in the next years budget if you want to change whats spent on an entitlement, you have to change the law, not just the budget.
Representative Black, whose work on this years budget resolution has been rightly praised, is offering up some $200 billion in cuts to mandatory spending. Thats not a lot, but it isnt nothing, either. The cost-saving measures include a lot of Republican chestnuts, for example putting a time limit and work requirements (work being rather loosely defined) on food stamps for able-bodied adults without dependents. It would enact money-saving reforms to the Social Security disability program and eliminate the cost of enforcing the Dodd-Frank financial-reform law by gutting the law. It would increase military spending, putting an additional budget-balancing burden on the domestic side.
The House plan purports to balance the budget in ten years, a claim that is, lets say, aspirational. If ten years from now the budget is balanced, no one will be better pleased than I, or more surprised.
The House budget also includes reconciliation instructions for deficit-neutral tax reform. Translated from the Washingtonian, that means that if the budget is enacted not through regular legislative order but through the reconciliation process which it almost certainly will be then any tax reform that makes it into the final deal has to be designed in such a way that it does not add to the deficit.
The Senate has other plans. The upper chamber wants to enact massive tax cuts that would add $1.5 trillion note the T to the deficit. And Senate Budget Committee chairman Mike Enzi (R., Wyo.) is doing his best Doctor Evil impersonation, offering mandatory spending cuts of one . . . billion . . . dollars, i.e. about twelve hours worth of Medicare spending. The House budget is all about reducing mandatory spending; the Senate budget is all about tax cuts its the spoonful of sugar without the medicine.
We have a floor of $203 billion, Black says. We would like to do more. We didnt just throw a number out there; we worked with the committees of jurisdiction to find what theyre comfortable with. But if we could do this year after year and use reconciliation to actually reform programs that havent been looked at in 40 years, then we can save.
Black is expecting a pretty good brawl. The Senate budget is going to be . . . different from ours, she says. Theres going to be a battle over deficit reduction. Well defend what we did in our bill.
Black is open to the Senates argument for goosing the economy through supply-side sugar-high tax cuts but insists theres got to be some constraint on the other end. Her advice is the sort of thing that used to be bipartisan conventional wisdom but is now the stuff of fiscal radicalism: Dont spend more than you take in.
The best-case scenario would be giving the Senate its $1.5 trillion in tax cuts matched by $1.5 trillion in spending cuts. The worst-case scenario would be passing that sweet tax cut without even nodding at the Houses $200 billion in mandatory-spending cuts. Whats actually going to happen is impossible to say, especially with the loose cannon in the White House in the mix.
Whats under way here is a contest of three distinct Republican visions: In the House, Diane Black is offering up an old-fashioned bottom-line Republicanism, reform this year, next year, the year after, and beyond; in the Senate, theyre hoping that a massive tax cut will resuscitate the Growth Faerie, who will sprinkle upon Washington the magic dust in which hard decisions are wondrously dissolved; and the White House is offering up President Trumps usual incoherent content-free populism, a combination of gimmicky showmanship and wishful thinking.
Which way the Republican party goes on the budget will say a great deal about the way the Republican party is going in general.
Yes, they certainly do.
What they love most of all, as do the Democrats, is power.
Some Possibilities:
1) Increase Taxes, Increase Spending
2) Increase Taxes, Decrease Spending
3) Decrease Taxes, Increase Spending
4) Decrease Taxes, Decrease Spending
I choose the fourth option.
Republicans seem to prefer the third option while Democrats prefer the first option (ALWAYS).
Anybody here seen option #2 above implemented at all?
As clearly demonstrated by the Billion dollar bailouts in Obamacare replacement plans.. And a Trillion dollars of shovel ready jobs with fancy signs. Aka.. Union bailout bill. They will shovel money into particular states and call it stimulus.. sounds swampy to me.
Just like the nor Cal dam failure because Stimulus is only given to rat areas.
Not impressed by deficit debates: eliminate deficits by... just borrowing more money!
That’s been DC’s solution for years.
“Paying” for tax cuts with borrowing is slightly better than paying for subsidies with borrowing. Assuming stimulus is desired.
No such thing. Tax revenues skyrocket when the economy is going gangbusters. The best way to get the economy going is with tax rate cuts. Tax cuts begat large revenue increases.
Put it in the wrong place...and you wind up with socialism.
Tax cuts stimulate the economy and INCREASE revenues.
I would cut the spending first, then the taxes.
RE: Tax cuts stimulate the economy and INCREASE revenues.
The only problem with that is when revenues increase, SPENDING INCREASES EVEN MORE.
I’d like to see spending go down or stay the same even when revenues increase. Hell will freeze over if I see this happen.
The author misses an important point here. Massive deficits will never be a problem as long as the U.S. Treasury can sell bonds at minuscule interest rates. I’m surprised anyone is willing to lend Uncle Sam money at these rates.
Spending cuts are more important than tax cuts. Making the government more efficient is the most important budget issue of them all. It helps in so many ways:
It lowers corruption.
It increases very skilled workers back into the regular economy.
It lowers the debt.
It increases the economy.
It lowers taxes.
It increases productivity.
And it lowers interest rates.
The whole idea of deficit spending is to pass the buck to the politicians who will come after you, so you won’t have to find the hard solutions, or take the blame.
So long as that is an option, cowardly politicians will always choose it rather than taking the tougher road.
Don’t link revenue and spending or we will never get a tax cut.
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