Wednesday, November 9, 2011

The Democrats Should Probably Let the Supercommittee Fail

For some reason, the Congressional Supercommittee, tasked with agreeing on a $1.5 trillion deficit reduction package by Thanksgiving, has been on my mind this afternoon, and I just want to be clear - the Democrats on the committee should probably let the committee fail. If they don't, I will consider it a Democratic betrayal of everything the Democrats supposedly hold dear.

Here are the latest details, from ThinkProgress:
Republicans on the fiscal super committee — which is tasked with coming up with a $1.5 trillion deficit reduction package by the end of the month — today made an offer that is supposedly a “concession” on their part, agreeing to $300 billion in new revenue, when they had previously ruled any new revenue off the table:
Congressional Republicans have offered to increase tax revenue by nearly $300 billion over the next decade through an overhaul of the tax code, a significant concession aimed at breaking a long-standing impasse in negotiations over the federal debt.
The offer envisions a tax code rewrite that would lower rates for everyone while raising overall tax collections by $250 billion, mainly by limiting the value of itemized deductions such as write-offs for home mortgage interest, state and local taxes and other expenses.
As a symbol of how far this debate has shifted, over the summer Speaker of the House John Boehner proposed a plan that included $800 billion in new revenue. The GOP now wants to raise less than 0.2 percent of GDP in revenue, which is less than the Democrats have offered in Medicaid cuts.
Plus, there is a huge catch: in order to agree to raising revenue, Republicans want to not only make all of the Bush tax cuts permanent, but according to the Washington Post’s Greg Sargent, they also want to lower the top income tax rate from its current 35 percent to 28 percent:
The highest tax rate would be reduced from 35 percent to 28 percent under the emerging GOP tax code overhaul proposal, the senior Democratic aide tells me. And the reduction would actually be even bigger than this. After all, if the Bush tax cuts were allowed to expire, as they’re set to do, the high end rate would go up to at least 39 percent. In other words, the aide says, under the proposal Republicans are pushing, the drop down to 28 percent would be at least 10 percentage points from what it would be if the cuts are allowed to expire.
If these are the kinds of "concessions" being offered by the Republicans, the Democrats should simply declare that the Republicans aren't negotiating in good faith and walk away from the table.

I mean, seriously - the Republicans agree to close a few tax loopholes, in exchange for another round of long-term, budget-busting tax cuts for the rich? This just goes to show, once again, that Congressional Republicans don't actually care about deficits - after all, they created most of the debt problem in the first place, and now it's obvious that they only care about cutting taxes on the rich, no matter the cost to the US government or to the country.

After a summer of debt ceiling insanity, it should be obvious to the Democrats by now that it's almost useless to negotiate with Republicans. So, they should stop trying.

After all, it's hard to imagine a deal that's better for the Democrats than the automatic trigger - massive cuts in domestic spending, to be sure, but half of the cuts are in defense, and half the cuts are in payments to Medicare providers - both of which are areas that, moving forward, will probably have to be cut seriously anyway. Then, in a couple of years, they make sure the Bush tax cuts expire, and the top tax rate on the wealthiest Americans goes back up to 39%, solving a big chunk of the long-term budget problem:

See how much of that deficit comes from the
Bush tax cuts? Quite a lot - more than 50%!

Silly optimists like Thomas Friedman continue to call for a Grand Bargain that will reduce the deficit by $4 trillion over the next 10 years, but since the Republicans aren't willing to put any meaningful revenues on the table, the Democrats should probably take the defense cuts, swallow the (not so horrible) Medicare cuts, and be happy that they aren't getting screwed any worse than they already are.

If the Democrats agree to anything that doesn't include big tax increases on the wealthy (which the Republicans would never agree to), they're both dumb and sell-outs, and they should be voted out of office during the next Democratic primaries they face. But, I sincerely hope the Democrats on the committee know when to say, "enough with the bullsh*t - we're taking our ball and going home."

1 comment:

  1. I've been following this also and I could not agree more. Well said.