The Deficit Reduction Committee

Surprise, Surprise! The Deficit Reduction Committee did not reach agreement.

Our media, as is their wont, bills it as a failure of our two parties unwillingness to compromise, and as a symptom of our broken government. But it is not the former, and it is the latter, only in so far as one of our two major parties, the Republican Party, is determined to keep government from working. As the old saying goes: “it takes two to tango.”

No compromise was possible because the Right (Republican Party) has no interest in what the Committee was charged with accomplishing, i.e. deficit reduction and they demonstrated this again in blocking any possibility of agreement.

           

As I have demonstrated in past writings on the deficit, Republicans have no interest in deficit reduction. It is simply a weapon with which to destroy the hated, “Welfare State.” I discussed this at length, and I urge you to go back and read my posts starting with my latest post on the subject: "The Deficit – One Big Hoax (Part VI)" and working backwards from there, using the links provided.

           

To repeat part of what I said in these posts:

Their lack of concern with the deficit can easily be seen in that not one of their proposed “reforms” decreases the deficit. The Ryan plan, which has passed the House with almost unanimous Republican support (four Republicans voted against it and no Democrats voted for it) would, according to Representative Paul Ryan himself, add $6 trillion to the national debt over ten years as reported by the Economist, hardly a left wing source, and as far as I can find nowhere else in the media.

This lack of concern with the deficit surfaced again in the deliberations of the “The Deficit Reduction Committee.” Democrats genuinely concerned with the deficit and anxious to reach agreement offered to agree to cuts in entitlement programs, which need to be cut in any case for their sustainability, as I discussed in my post which you can find here. 

They asked that Republicans come to the table with an agreement that would raise revenues, and until a few days before the deadline the Republicans on the panel would not put one dime in increased revenue on the table. With the deadline fast approaching they finally talked about an “increase (in) tax revenue by $300 billion, which was seen by some lawmakers as a breakthrough given the party’s resistance to increased revenues.”  

Since the committee was charged with coming up with at least 1.2 trillion in reduction to the deficit, this would have meant that Democrats would have to agree to $ 900 billion in cuts, a three to one ratio. The Dems swallowed hard and indicated they might be willing to go along. They thought they had a breakthrough, in so far a Republicans finally appeared to have put “added revenue” on the table. Then came the kicker! In order for them to agree to 300 billion in added revenue, Dems would have to agree to extend the Bush tax cuts, or a decrease in revenue of $4 trillion. It doesn’t take a mathematical genius to see that if you deduct 2.1 trillion from 4 trillion, you get 1.9 trillion, the amount by which the deficit would be increased. Or to put it another way, it’s the Ryan budget all over again. You cut entitlement spending and you increase the deficit at the same time, which, according to their logic requires further slashing of entitlements and other programs that they don’t like. Or heads we win, tails you lose. Needless to say, there was no agreement.

But where was the media to explain all this? As usual they were missing in action. All they could come up with was a shake of the head and the usual bromide, “Why can’t they agree.” Well there is a damn good reason why! There was no desire on the part of the Republicans to offer anything that remotely accomplishes anything, other than do away with entitlements.

How could any sane Democrat agree to this?

Why doesn’t the media, who even with their fear of speaking the truth is denounced by the Right, speak the truth for once. Why are they so afraid of being accused of partisanship? Telling the truth wherever it may lead, is what good journalism is supposed to be all about.

One of the few media outlets, The Christian Science Monitor reported what happened accurately:

Republicans insisted during the super committee negotiations that curbing tax breaks to raise revenues be coupled with guarantees that all the Bush tax cuts would continue beyond 2012…Democrats countered that the super committee was created to reduce the budget deficit, not add to it by extending tax cuts.

The Economist all alone tells us the way it is:

The game being played here has little to do with the budget itself. It is an ideological debate about the role and obligation of government. First, cut taxes for the wealthy to create a big hole in the budget, have a Great Recession aid the cause by stripping government at all levels of tax revenue, increasing costs of serving people, and creating short-run deficit problems (and a war here and there doesn't hurt the cause either), and finally use the deficit as a club against social insurance programs such as Medicare and Social Security. 

So we have ended up with $1.2 trillion cuts going into effect beginning in 2013. $600 billion of that will be in defense spending which is in addition to a cut of $450 billion previously agreed to. Not the worst of all possible outcomes, and in 2013 the Bush tax cuts will expire. No Congressional action is needed. Beginning in 2013 the deficit will be reduced over the following ten years by 6.1 trillion. The hammer of using the deficit to justify attacks on needed spending will be gone. Not bad negotiating by our President.

In response to my post “What can we, and should we do about the deficit?” Bruce Weintraub wrote:

Republicans should be forced to make choices too:  Either an increase in marginal tax rates for the superwealthy or steep cuts in ‘defense’. But Democrats NEVER put them on the spot.

Well Bruce, they did, and the “Elephants” were maneuvered into agreeing to steep defense cuts.

            

Would Bruce and the Left please apologize to our President and admit he did a brilliant job of negotiating under the most difficult circumstances.


The threat to our National Security according to Admiral Mike Mullin then Chairman of the Joint Chiefs of Staff is our debt, as shown below:

While Secretary of Defense, Leon Panetta, has talked about all kinds of disasters from cuts in defense of $1 trillion, this does not square with the facts. As an article in US News and World Report points out: 

Despite the doomsday scenarios continually espoused by Secretary Panetta and the military chiefs, a cut of that size would amount to only 15 percent, in real terms return spending to its 2007 level, and still leave the United States above what we spent on average in the Cold War. Finally, such a cut would be far less than cuts made by Eisenhower (27 percent), Nixon (29 percent), and Reagan, H.W. Bush, and Clinton (35 percent), which were done without jeopardizing security.

           

Now the Republican deception takes full form in a column by Charles Krauthammer that appeared in the November 24 issue of the Washington Post, under the heading “The Grover Norquist tax myth." I will analyze this point by point in my next post.

I regret that I was forced by events to abandon my analysis of where we could beneficially cut spending. Hopefully events will make it possible for me to return to beneficial cutting without ignoring developing news.

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