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The Republicans once again insist, as per Grover Norquist, that tax increases of any kind, type, or character are off the table. Republicans contend that the budget deficit must be closed solely on the basis of cuts to non-military discretionary spending and adjustments to the large "Entitlement" programs of Social Security, Medicare, and Medicaid. The Republicans have so far refused to consider cutting the military budget. Mitt Romney, you will recall, actually wanted to increase the military budget substantially beyond what even the Pentagon has requested to the tune of some 3 trillion dollars. I read the ill-fated Simpson-Bowles recommendations the other day, known more formally as the recommendations of the National Commission on Fiscal Responsibility and Reform. The Simpson-Bowles Committee of course was a bi-partisan effort to address the deficit issue. The President has been widely criticized for failing to embrace the Simpson-Bowles proposals. However, the Republican members of the Committee also turned out to be less than supportive of the recommendations. Paul Ryan was a member of the Committee and he voted against even formally adopting the ultimate proposals.
The following is taken from Wikipedia. On November 10, 2010, co-chairs Simpson and Bowles of the National Commission on Fiscal Responsibility and Reform released a draft proposal for consideration by other Commission members. The proposal presented five "steps."
- $200 billion reduction per year in discretionary spending[13] with proposed cuts including reducing defense procurement by 15% and closing one third of overseas bases, eliminating earmarks, and cutting the federal work force by 10%.
- $100 billion in increased tax revenues through various tax reform proposals,[13] such as introducing a 15 cent per gallon gasoline tax and eliminating or restricting a variety of tax deductions such as the home mortgage interest deduction and the deduction for employer-provided healthcare benefits.
- Controlling health care costs by maintaining the Medicare cost controls associated with the recent health care reform legislation,[13] in addition to considering a public option and a further increase in the authority of Independent Payment Advisory Board.
- A reduction in entitlements, including farm subsidies, civilian and military federal pensions and student loan subsidies.[13][14]
- Modifications to the Social Security program to raise the payroll tax and the retirement age.[13]
It has been reported that President Obama has suggested a combination of $1.00 in tax increases for every $10.00 in budget cuts but Congressional Republicans have refused to consider even these modest increases in taxes. Democrats have long accused the Republican Party of being primarily interested in protecting the interests of big business and the wealthy. It's hard to believe that the single goal of preventing a rise in the marginal tax rate on high income earners from 35% to 39%, where it was during the Clinton Administration, would trump every other fiscal issue for the Republican Party. However, it is starting to appear that this is in fact the case. The Democrats may be right about the Republicans after all.
It's hard to see why we can't solve these problems. As far as I'm concerned, the Congress could let all the Bush tax cuts expire on everybody. That would certainly improve the deficit situation and I cannot believe that all that much devastation would be created. The argument I heard from Speaker Boehner on television last night to the effect that a 4% increase in the tax rate on people making $250,000 or more would chill job creation is clearly overstated, hyperbolic hokum. I would really like to see the projections for some compromise on letting the Bush tax cuts expire. Say, a 2% rise in the marginal tax rates on the upper two tax brackets and a 1% rise in the tax rates on everybody else. Where would that put us? We could raise the limit on payroll taxes from $110,000 to, say, $125,000. We could raise the age for full Security Security benefits on people under 55 from where it is now (it varies) by two years and allow hardship applications for the truly needy at age 65. We could raise payroll taxes by a small amount. We could reduce Social Security payments by a small amount. We could limit the home mortgage deduction to the price of an average home being fully financed. In other words, we encourage home ownership by maintaining the home mortgage deduction up to a point, but if you have to buy a 1 million dollar home, you only get to deduct what the average person gets to deduct. If you can buy a 1 million dollar home, we don't need to be subsidizing your purchase by letting you deduct some ginormous monthly interest payment. We also don't need to be subsidizing the purchase of second homes. I believe that some common sense and creative thinking could readily resolve our deficit problem. The cynics believe that the only thing that Americans think about is their own personal pocketbook. I refuse to believe that the majority of Americans are so short-sighted as this. We are a nation of grownups. I believe that most of us would accept some of the financial pain of bringing order to our national financial house if there is a sense that all are making a fair contribution.
Here's a breakdown of our current national spending:
The big ticket item of course is "defense" spending. We currently spend more money on military expenditures that most of the rest of the world COMBINED. Now that the Bush wars are over and winding down, why in the world do we need such a massive military? We currently have over 900 military facilities around the world outside the United States. I heard a remark on a TV show the other night that a salute was going out to our military men and women in 125 countries. 125 countries. Why do we possibly need our forces in 125 countries? The military outlays that we are making are absolutely insane. The Simpson-Bowles Committee clearly acknowledged this by recommending that we cut our overseas bases by 1/3. I'm not sure why we need more than a handful of bases in strategic locations. We certainly don't need more aircraft carriers and heavy bombers to fight the modern limited wars that we have been involved in during recent years. As President (and Five Star General) Dwight D. Eisenhower noted, the biggest threat to our national security is deficit spending, not a threat from other countries. We need to have our civilian leaders stand up to the military brass and call a halt to the ridiculous, perpetual escalation of military spending. As I heard Jesse Jackson say a number of years ago, "the Russians are out of business." Let's take advantage of that and divert some of the military money to other uses.
It's time that our representatives in Washington start acting like big boys and girls and sit down with each other and get these problems solved. We need to keep the pressure on them to do so.
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