With the Tea Party putting the wind in its sails, the GOP scored a historic reversal last fall, turning the Obama “revolution” back on its heels.
Is the GOP establishment about to completely blow it?
Well, not if I have anything to say about it. Needless to say, I’m going to need some help.
———-
An article in the Lehigh Morning Call indicates that the conservatives on the “Supercommittee”, including Pennsylvania’s Pat Toomey, are pondering a compromise on the deficit that would cut taxes (good), combined with eliminating some loopholes (not so good):
At the proposal’s core is Toomey’s economic belief that simplifying and lowering taxes will grow the economy, and in turn, a growing economy will produce more revenue. It would cut the deficit by a bit more than the $1.2 trillion required of the supercommittee, with about $700 billion coming from spending cuts. It would lower the top tax rate for individuals from 35 percent to 28 percent, and generate around $500 billion in new revenue from closing unspecified tax loopholes and reducing tax deductions….
Toomey, whose plan was presented verbally to his colleagues and not in written bill form, did not specify which spending or tax deductions to cut. In a phone interview Friday, he said his preference would be across the board reductions in deductions as opposed to eliminating any entirely.
His plan equates to $1.50 of cuts for every $1 of new revenue, he said. It’s a huge concession for Republicans, he said, considering the bipartisan National Commission on Fiscal Responsibility and Reform had recommended $3 in cuts for each $1 of new revenue.
This is not a place for compromise.
Hugh Hewitt has some challenges – pronouncing names seems to vex him – but on this sort of subject, he’s as good as they come. And he’s not happy:
What is crucial is that this approach be loudly and quickly rejected by the House GOP and key GOP senators as any such plan is an enormous breach of faith with the voters who sent back a new GOP majority and who will be asked in less than a year to do so again and to add enough GOP senators to make a working majority for a new Republican president. Any deal like Toomey’s would greatly injure the chances of gathering the sort of energy necessary to recreate the 2010, 1994 or 1980 sweep because it would be an obvious indictment of the credibility of the House and Senate GOP, not one member of which ran on such a platform last year.
I’m not the first to say that this – if it actually happens – is another “Read My Lips” moment; a compromise that depends on the integrity of the Democrats in keeping up their end of a bargain. They have none, and they won’t. Ask George H. W. Bush (and, for that matter, Ronald Reagan).
Hewitt:
Both [Jeb Hensarling and Pat Toomey] seem to have forgotten that they were not sent back to D.C. to re-engineer the government or “reform” the tax code so that millions would pay more and millions would pay less and more total revenue would flow into it, but so that spending would be drastically cut.
They were not sent there to be part of the all-knowing, all seeing Committee of Oz.
Which is, by the way, exactly what may of us knew the “Supercommittee” was going to turn into.
It’s time to bum-rush the Capitol switchboard again.
If you’re in Minnesota,
The Republicans set themselves up for this when they tied devastating defense cuts to this committee’s actions. Toomey’s plan isn’t great but it is more tolerable than the defense cuts which are going to be on the menu in the absence of a deal.
When you dance with the devil, the devil picks the tune. There is no “win” in any conceivable scenario the dems might be secretly hoping to pass. The bear trap they have set requires a very stupid bear to step into it. Is our party equal to their expectations/fantasies?
I can live with cuts in loopholds/deductions (aka Reagan plan) is it means holdling the line on tax rates and combining it with spending cuts (or at least holding levels stable).
Whatever Republicans do, they have to remember the sting that the Democrats performed on Bush 41. He agreed to a compromise tax hike, and then the Democrats stabbed him in the back and used that as a campaign issue.
I really think that the balanced budget amendment is the only real fix.
No matter what the budget commission does, without a constitutional amendment the congress that takes over in Jan. 2013 can undo it.
Restricting the federal government to spending receipts + earlier savings is the only way to slay this monster.
Note that this would not restrict the amount the government can spend — only that it has to pay for what it spends. It would also not affect state & local governments’ ability to spend.
If we really want a keynesian stimulus (note that this only works to even out cyclical — not structural — unemployment) we can sell something, say, Western Samoa, and spend that money.
I am fully convinced that the Demwits want this to fail. Defense cuts are something they are reflexively in favor of and any cuts to entitlements are going to be blamed on the extremist Republicans. With their willing accomplices in the media many people will buy it.
I’m fine with the general concept of eliminating deductions/exemptions/credits within the tax code as part of a more comprehensive move to simply and flatten the code but with two caveats:
I think Republicans who dicker over the ratio and timing of revenue enhancements to spending “cuts” (which so far have been “reductions in the rate of growth by a future Congress – maybe”) are setting themselves up for a fall. If we learned anything from the gamesmanship used to get the CBO to score Obamacare as deficit neutral – you can manipulate the numbers (timing of payments, claiming future “cuts” six years out, using baseline budgeting to claim that growing by 10 percent instead of 5 percent is a “cut,” etc.) to claim your proposal balances the budget. I think the deal that Republicans ought to offer is (a) balance the budget by reducing spending to meet current levels of revenue and (b) any revenue enhancements only kick in when the budget is balanced and we pay down the national debt.
I think that Senator Toomey is wrong to favor reducing deductions over their outright elimination. If a particular deductions such as the home mortgage interest deduction is a bad idea because of the economic distortions it creates (e.g. subsidizing an over-investment in real estate and artificially inflating the price), then we should eliminate it. I get that this has been built into a lot of people’s current mortgages and eliminating it overnight would create a lot more havoc which is why I’m open to phasing some out over a (short) time period to minimize the disruption (maybe grandfathering in current mortgages and refis that don’t increase the amount of principal) but we shouldn’t be trying to preserve a tax subsidy merely because it’s popular for one group of taxpayers.