Boehner's Half-Baked Economic Plan
August 24, 2010 - 2:52pm ET
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Rep. John Boehner, the perpetually tanned House Minority leader, unveiled his plan to get the economy going today in a speech before the Cleveland City Club. Hold on to your job; if he becomes speaker, things will get worse.
Understandably, Boehner said not a word about the policies that led to the Great Recession. In fact, he said not a word about the economic collapse. Instead, he argued only that America's economy was in trouble because business was scared to death. It isn't the worst recession since the Great Depression, the lack of demand and customers that is plaguing businesses; it is the fear of tax hikes and regulation.
In response, Boehner detailed a five-point plan to "break the ongoing economic uncertainty." Three of the five points are basically rhetorical. He calls on Obama to pledge to veto any future tax increase. He calls on Obama to fire his economic team. And he promises to eliminate the 1099 tax return mandate that requires small businesses to report any expenditure on goods and services over $600, an aggravation that Democrats are also intent on reversing.
The last two points have greater substance. Boehner would keep tax rates where they are, opposing Obama's plan to let the Bush tax cuts expire for couples making more than $250,000 a year, or the top 2% of Americans. The Center for Budget and Policy Priorities estimates this would add about $1 trillion to the deficit over the next 10 years.
Second, he would impose an immediate cut of about 25% on domestic discretionary spending, returning it back to 2008 levels, repealing any further recovery spending. Later, he suggests that the cut with a "hard cap" (presumably for three years) would save $340 billion, recouping a little more than a third of his proposed top-end tax cut.
That's it. (Later in the speech, Boehner promises to unveil a more complete agenda in the future, and suggests possibilities, including the conservative standards: less spending, more tax cuts, less regulation, and more corporate trade treaties. Details to come later.)
There are some major problems with the Boehner plan.
1. It is a joke. We have over 25 million people unemployed, with an economy that is slowing. The Boehner response is to keep tax rates where they are for the rich, and cut all recovery spending, slashing 25% from domestic discretionary spending. We know two things about this program: It will kill more jobs than it creates; and it will add to, not subtract, from projected deficits.
2. It's half-baked. It is as if Boehner hasn't noticed what is going on in this country over the last decades of conservative domination. Instead he would exacerbate the worst ruinous trends. For example:
- We suffer from the worst inequality ever. The top 1% pockets about 20% of all income, and has captured two-thirds of all income growth in the Bush years before the recession. Boehner's extension of the Bush top-end tax cuts will simply add to that in after-tax income.
- We suffer a costly and growing public investment deficit—in everything from sewers and roads, to education and training, to research and development—areas vital to sustaining a competitive private economy. Slashing non-defense discretionary spending —which includes spending on education, on energy, on the environment, on everything the government does outside of defense and entitlements like Social Security and Medicare -- will only worsen that.
- (And the hints Boehner offers about future plans aren't reassuring: more of the trade treaties that led to the ruinous trade deficits that force us to borrow $2 billion a day, largely from Chinese and Japanese central bankers; less regulation in the face of what deregulation of the big banks did to the economy, to the citizens in the Gulf, in the coal mines, and most recently to egg buyers in grocery stores; turning Medicare into a private insurance voucher, and more.)
Boehner became an instant YouTube celebrity for his "hell-no-you-can't" rant on health care reform. So it is understandable why he would want to offer voters some clue about what Republicans are for, not just what they are against. And no doubt the rhetoric of his speech has been dial-tested and focus-grouped to the last syllable.
But as a plan to get the country going, a plan to put people to work, a plan even to "break the ongoing economic uncertainty," this is just silly. The time would have been better spent working on his tan.
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