The "BS" Austerity Plan Nobody Wants ... And We May Get Anyway
October 31, 2012 - 12:08pm ET
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Poll after poll has shown that the public rejects the millionaire-oriented, tax-cutting, government-slashing austerity plan known as "Simpson Bowles." And yet politicians in both parties keep trying to force it through the legislative process under the banner of a "Grand Bargain." Word is they're going to try again, either during the lame-duck session or when the new Congress convenes in January.
That plan was originally called "Bowles Simpson," but its well-financed architects soon ran afoul of the "BS" acronym. But "BS" can stand for something else, too: "bait and switch." That's exactly what they'll be doing if politicians force a "BS" austerity plan on the public after the votes have been counted.
For years voters didn't even consider the deficit a very important issue. They correctly considered job creation a much higher priority. Now, after years of media hype, some (though by no means all) of the polls say that this issue is a top concern for voters. But voters don't want any cuts in specific programs - except defense.
That's always an invitation for politicians and pundits to sneer at the ignorance and illogic of the electorate. But economic analysis supports the voters, not the insiders, on this one. It makes a lot more sense to raise taxes on the wealthy now, invest in jobs and growth, and pivot to deficit concerns once the economy's growing at a healthy clip.
Polling in 2010 showed that a large majority of voters, including 75 percent of Republicans and 76 percent of self-described Tea Party members, opposed cutting Social Security to reduce the deficit. That's a key Simpson Bowles provision (although they've tinkered with the wording after being battered in the polls.) And seventy percent of voters polled were either "somewhat" or "highly uncomfortable" with the Simpson Bowles plan when it was released.
They may get it anyway.
The politicians who are pushing a "Grand Bargain" object, of course, when their "Simpson Bowles" recipe is described as "pro-millionaire" or "anti-tax." Bill Clinton, one of this austerity program's most aggressive salespeople, even brought the Democratic Convention crowd to its feet when he mocked Mitt Romney for saying he'd make up for his millionaire and billionaire tax cuts with unspecified "revenue enhancements" at some future date.
But that's the same thing the Simpson Bowles plan would do. One of the key features of this so-called "deficit reduction" plan is a cut in top tax rates for the wealthy and ultra-wealthy, accompanied by what they describe as "tax reform and simplification." Ask yourself: Why would anyone offer tax cuts - or tax"simplification," for that matter - in a deficit reduction plan? It makes no sense, unless ...
... unless it really isn't a "deficit reduction" plan at all.
Sure, they say they'll make up the lost revenue by eliminating unspecified tax breaks. But, as with Romney's plans, there aren't any tax breaks big enough to make the difference. In order to offset the increased deficits caused by these cuts they'd have to gut tax exemptions that are vital for the middle class, like the cuts that fund employer-based health care. Child deductions and home mortgage interest would also be on the chopping block.
But why would a deficit plan make its own job harder? The answer is, it wouldn't - unless its real agenda was anti-government and pro-millionaire, not anti-deficit and pro-majority.
Far-right politicians like Mitt Romney and Michele Bachmann are merely reading from a prepared script when they claim that deficit reduction is a moral issue. " It is simply immoral in my view," Romney said last year, "for us to continue to rack up larger and larger debts and pass them on to our kids, knowing full well that we’ll all be dead and gone before it’s paid off."
"This is a moral issue," Bachmann said about deficit reduction in a recent debate. "We can't go down the path that we're in." (I think she meant "path we're on," but never mind.)
Bachmann's staked a position to the right of the Simpson Bowles austerity plan - essentially advocating for no government at all - while her Democratic opponent unfortunately embraced the right-wing proposal. It's a sign of the times, and of our broken political system, that there are so many races in which neither candidate is expressing the view of the most voters - and often of the majority in both parties.
And it's a sign of American journalism's weakness that nobody's asking candidates like Romney and Bachmann questions such as: If it's immoral to saddle our young people with these debts, why won't you raise taxes on people like yourselves Or, If it's immoral to saddle young people with debt, how can it be moral to cut education funding and deny them the chance to better themselves?
Thankfully, some Democratic candidates are pushing back on the austerity groupthink. New York Sen. Chuck Schumer pushed back on the growing and misguided consensus by stating what should have been obvious. "“These promises of lower rates amount to little more than happy talk when the math behind them doesn’t add up,” said Schumer, adding "... you can’t have your cake and eat it too.”
But the cake-eaters have been crowding the dessert table. They've been especially vocal on Social Security - another issue that has no business in a deficit plan, since it's forbidden by law from adding to the deficit. Virginia Senatorial candidate Tim Kaine had the common sense to point that out, and said specifically that he would reject the Simpson Bowles plans for cutting its benefits. Kaine also observed that the replacement of Medicare with vouchers in the GOP's Congressional budget is "not a cost-saving, but a cost-shifting plan."
The problem with the Simpson-Bowles deficit hustle is that it's always a "cost-shifting plan." Cuts in Federal spending inevitably lead to increased spending at the state level (as has happened with education), to increased out-of-pocket costs (which will happen with Simpson Bowles-style Medicare cuts), or to the greatest and most tragic expense of all: the loss of a productive human life, sacrified to cuts in education or jobs.
No less a personage than Vice President Joe Biden offered a "flat guarantee" that there would be no changes to Social Security, while talking with a group of Virginia voters. He might want to have a conversation with his boss, since the President has needlessly offered to include Social Security cuts in deficit deals.
But the President's recent comments on deficit reduction were almost holographic in their ambiguity. "If I’ve won," the President said, "then I believe that’s a mandate for doing it in a balanced way." Does that mean he'd consider his victory a "mandate" to cut deficits, or to ensure it's done in a balanced way? It sounds like the latter, but it's not clear.
It's unfortunate that the President isn't clearer and more forceful on this issue, but one thing's for certain: While he mentions "Simpson Bowles" often, he's not running on an unequivocal program of cuts to Medicare and Social Security, drastic reduction in other forms of government spending, and lower taxes for the wealthy.
And that is Simpson Bowles.
Nobody - nobody - is running on a straight Simpson Bowles ticket. That's because it's as toxic politically as it would be economically, were it to become law. It would make a mockery of the democratic process to impose this austerity plan on voters who were never given the chance to vote for - or against - it.
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