Why Republicans Can’t Propose Spending Cuts By Jonathan Chait

[TampaYankee]

Why Republicans Can’t Propose Spending Cuts

By Jonathan Chait

“Where are the president’s spending cuts?” asks John Boehner. With Republicans coming to grips with their inability to stop taxes on the rich from rising, the center of the debate has turned to the expenditure side. In the short run, the two parties have run into an absurd standoff, where Republicans demand that President Obama produce an offer of higher spending cuts, and Obama replies that Republicans should say what spending cuts they want, and Republicans insist that Obama should try to guess what kind of spending cuts they would like.

Reporters are presenting this as a kind of negotiating problem, based on each side’s desire for the other to stick its neck out first. But it actually reflects a much more fundamental problem than that. Republicans think government spending is huge, but they can’t really identify ways they want to solve that problem, because government spending is not really huge. That is to say, on top of an ideological gulf between the two parties, we have an epistemological gulf. The Republican understanding of government spending is based on hazy, abstract notions that don’t match reality and can’t be translated into a workable program.

Let’s unpack this a bit. We all know Republicans want to spend less money. So the construction of the debate appears, on the surface, to be a pretty simple continuum based on policy preferences. Republicans like Mitch McConnell say government spending is “out of control” and would, at least ideally, like to bring it into line with revenue entirely through spending cuts. Democrats like Obama endorse a “balanced” solution with revenue and taxes. Right-thinking centrists, like the CEO community and their publicists like Mike Allen and Jim VandeHei, think we should cut deeply into entitlement spending while also raising tax revenue. (VandeHei, in a video accompanying his execrable story, asserts, “There’s money to be cut everywhere.”)

There really isn’t money to be cut everywhere. The United States spends way less money on social services than do other advanced countries, and even that low figure is inflated by our sky-high health-care prices. The retirement benefits to programs like Social Security are quite meager. Public infrastructure isgrossly underfunded.

The Bowles-Simpson “plan” was an earnest and badly needed attempt to reconcile the GOP’s hazy belief that government is enormous with reality. They did everything they could possibly do: They brought in representatives from all sides for long meetings with budget experts, going through all aspects of federal policy in detail, in the hope of reaching an agreement on the proper scope of government and how to pay for it. It failed. The Bowles-Simpson plan wound up punting on all the major questions because it simply couldn’t bridge that gulf between perception and reality. That’s why, in lieu of any ability to identify government functions to eliminate, the plan simply pretended the federal government could have everybody do a lot more work for less pay.

The real domestic savings in Bowles-Simpson came from building on Obamacare’s steps to save money by holding down the growth of health-care costs and to cut defense spending by pretty steep levels. But these turned out to be ideas that alienated rather than satisfied Republicans. So basically it turned out to be impossible to find real spending cuts that Republicans wanted.

It’s true that Paul Ryan’s budget plan had some deep cuts. But none of those cuts touched Medicare for the next decade or Social Security at all. Ryan just kicked the crap out of the poor. So, that provision aside, if you’re not willing to inflict epic levels of suffering on the very poor, there just aren’t a lot of cuts to be had out there.

Republicans and even many centrists like to endorse taking away Medicare benefits from people like Warren Buffett. But even defining “Warren Buffett” at a level way below Warren Buffett’s income level yields pathetically little money. (The very rich have a vastly disproportionate share of income but not a vastly disproportionate share of entitlement benefits, which means taxing them produces way, way more savings than reducing their social spending.) This is why the spending side of the fiscal cliff negotiation is so discouraging. The potential cuts on the table range from fairly painful steps like reducing the Social Security cost-of-living index to even more painful steps like raising the Medicare retirement age, and none of them would save all that much money — certainly not on the scale that Republicans want.

When the only cuts on the table would inflict real harm on people with modest incomes and save small amounts of money, that is a sign that there’s just not much money to save. It’s not just that Republicans disagree with this; they don’t seem to understand it. The absence of a Republican spending proposal is not just a negotiating tactic but a howling void where a specific grasp of the role of government ought to be. And negotiating around that void is extremely hard to do. The spending cuts aren’t there because they can’t be found.

See original article at:

http://nymag.com/dai...nding-cuts.html

[MsGuy]

TY, it ain't just the expenditure side they're goofing on.

The tentative Repub offer on the revenue side is a total bluff. Reduce total deductions to $55,000 or whatever? Supposed to result in 800 billion or so in additional revenues mostly from the wealthy (except it aint gonna happen).

Every church, university, museum, etc., that has spent the last ten years sucking up to some millionaire to get that big donation lined up would be marching on Washington to exempt the charitable deduct. You think maybe the construction industry won't be opening their wallets to keep the home mortgage interest intact? Those two deducts alone equal about 1/2 the proposed revenue enhancement. And every other deduct has a similar army of supporters lined up to raise holy hell if it's threatened.

You think Boner doesn't know the max feasible revenue enhancement available from restrictioning loopholes is maybe 100 billion or so? Basically Repubs are proposing nothing other than a serious attack on entitlements benefiting folks who mostly vote Dem anyway (LOL, Romney's 47%).

Now if the Repubs really are interested in rationalizing the tax code, why don't they propose doing away with the 'Carried Interest' monstosity that allows hedge fund managers to pay capital gains rates on ordinary income? That's worth about 100 to 120 billion over the next ten years per the CBO. It's a start. Or maybe that would pinch the wrong folks.

[TampaYankee]

TY, it ain't just the expenditure side they're goofing on.

The tentative Repub offer on the revenue side is a total bluff. Reduce total deductions to $55,000 or whatever? Supposed to result in 800 billion or so in additional revenues mostly from the wealthy (except it aint gonna happen).

Of course it is... well not a bluff, more a scam. The same scam Romney proposed in order to avoid taxing rich bastards like himself. Their whole game actually rests on increasing revenue by increasing economic growth - that is the argument anyway -- while blocking Obama from doing anything to stimulate economic growth. Thus the deficit will grow necessitating more spending cuts. Anyone see a pattern?

This is another failure of the press to inform the people of the 'facts associated with the numbers' leaving the discussion at the level of a controversial 'he said -- she said' squabble. They do the same controversy mongering by reporting that the real 'Mayan End of the World' prophecy is the coming fiscal cliff, which if looked at in an objective light is another man-made disaster created out of smoke and mirrors. Nothing other than irrational fear and panic is going to happen Jan 1st if we do not pass any legislation. If we understand the facts then there is no need for panic. We have a window -- a short window -- left to right the ship before any parts of the sky actually begin to fall. But that doesn't sell papers or generate cable show controversy.

People still don't get the obvious -- The GOP goal is to starve government of money until it collapses to an entity that provides only defense security, including occasional wars of economic or political opportunity -- yet another way to spend money that cannot go to domestic programs, and to extend largess and other assistance to the plutocracy. Oh, and most of them want to dictate who you can love or what you can do with your own body and raise one religion above the others with government sanction and impose the strictures of that religion on everyone through law. No big deal.

As far as restructuring the tax code... their only interest is how to restructure it so that the plutocracy can achieve minimizing their tax burden without have to employ an army of accountants and attorneys and lobbyists to achieve that goal. If 'carried interest' is eliminated it will only be over their strenuous objection. More likely that pig will get a coat of lip stick if they have their way.