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April 24, 2013
Jewish World Review
Nov. 30, 2012/ 16 Kislev, 5773
Brain-lock inside the Beltway
It's at times like this I'm ashamed to admit I live inside the Beltway.
Well, that's probably not specific enough since I'm usually ashamed to admit I live inside the Beltway.
Still, the second you try to explain the stupidity of this "fiscal cliff" fiasco to a normal person, it makes William F. Buckley's famous declaration that he'd rather be governed by the first few hundred people listed in the Boston phone book than by the faculty of Harvard seem all the more reasonable.
While there are some responsible politicians and policymakers in Washington, if you look at the whole place collectively, Uncle Sam starts to look like a junkie. The logic of addiction dictates that you make a deal that allows you to avoid all of your problems now and enjoy a quick high in exchange for a painful confrontation with reality down the road.
Almost exactly a year ago, during the famed debt ceiling negotiations, Speaker of the House John Boehner boasted that he'd forced tough concessions from the Democrats, achieving the first real cut in government spending in ages. He claimed his "real, enforceable cut" amounted to $7 billion for fiscal year 2012. The Congressional Budget Office objected, saying the real savings were closer to $1 billion.
"Which of these numbers is accurate?" asked columnist Mark Steyn at the time. Answering his own question, he wrote: "The correct answer is: Who cares?"
And he was right. At the time, the U.S. was spending $188 million of largely borrowed money every hour of every day. So, going by the CBO number, if you started watching the official "Godfather" trilogy box set right after the deal was cut, the government would have burned through its "savings" before Fredo went on his last fishing trip. If you went by Boehner's math, you could actually watch the whole trilogy about four times before the "savings" ran out.
America already has a more progressive tax system than Europe, according to the Organization for Economic Cooperation and Development. The Democrats insist that the rich need to start paying their "fair share," which means even more progressivity. The Republicans, meanwhile ... agree! The difference is that the GOP wants to eliminate loopholes and exemptions while keeping rates where they are. Democrats would prefer simply raising the rates.
Now here's a distinction that the first few hundred people in the Boston phone book would probably grasp better than the folks at Harvard (or Congress): A tax increase is a tax increase. If I make the same amount of money as I did last year but pay more in taxes, then my taxes have gone up. If I pay less, my taxes have gone down. Whether the numbers moved this way or that because of closed loopholes or rejiggered tax rates, the result for me is the same. That doesn't mean tax simplification doesn't make sense, but dodging a rate hike isn't the same as dodging a tax hike.
So the Republicans are, in fact, in favor of raising taxes by the rules of the real world. In exchange for doing this, they want the Democrats to deal with the real problem: spending. You could confiscate 100 percent of income over $1 million, and it would cover about a third of the deficit (and crush the economy in the process). You'd still have deal with spending, particularly entitlement spending.
But the Democrats want to do ... nothing. Or at least that's the position they seemed to be taking this week.
The White House and the Democrats have been floating the idea that we can worry about entitlements later, if ever. The urgent thing is to raise taxes on the wealthy as soon as possible. When asked what he was prepared to cut, Senate Majority Leader Harry Reid said Wednesday, "Now remember, we've already done more than a billion dollars worth of cuts. We've already done that. So we need to get some credit for that."
OK, here's the credit: That is about .09 percent of the deficit. Take .09 percent of a bow Harry.
Meanwhile, the GOP seems to be obsessed with Talmudic interpretations of Grover Norquist's anti-tax pledge. You see, if the Bush tax cuts expire, we'll all pay a lot more in taxes. But letting them expire wouldn't violate the pledge, while voting for a smaller net tax increase would.
As Republicans sort all that out, the guy who actually won the election by claiming he had a better plan hasn't proposed any plan at all. That's life in the Beltway for you.
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