The Bipartisan Cromnibus Saga: A Final Assessment

Robert Borosage

The government didn’t shut down. Congress passed the massive – 1,603 page – spending bill, chock full of special interest giveaways, to keep the doors open. The Washington Post editorial page, the voice of the conservative establishment, acknowledges all the horrors – but celebrates the results:

 “And given the alternatives — which were either this bill and the stable government funding through September that it would bring, or a possible government shutdown followed by repeated budgetary cliffhangers — it’s obvious that the Cromnibus did, indeed, represent a step in the right direction. (emphasis added) Many of those who supported the bill did so in the hope that the spirit of compromise, which it so haltingly and messily embodied, might flourish and grow.”

The Post scorns the “show horses” on the right (Ted Cruz) and left (Elizabeth Warren, Nancy Pelosi) for not knowing the difference between “posturing and policy-making,” while hailing the “work horses” (Sen. Barbara Mikulski and Rep. Steny Hoyer, both Maryland Democrats).

This is the epitome of bipartisan blather: “the hope that the spirit of compromise…might flourish and grow.” The argument assumes that we are on the right course, and disruption would be destructive, that “messily embodied” compromises are worth the game.

But for the vast majority of Americans, we aren’t on the right course. We are in an economy that rewards the few, while more and more struggle simply to stay afloat.

The reason is that the rules are rigged to serve the powerful – the subsidies, the tax dodges, the weakened regulations, the perverted priorities. And it won’t get better until business as usual is changed.

The Cromnibus guarantees another year of growing inequality and declining security for most Americans. Once more, vital investments are shortchanged. Once more, austerity is favored over jobs. Once more, the bill is larded with what the Post calls “regrettable, not cataclysmic” special interest giveaways: repeal of a key part of financial reform for Wall Street, allowing banksters to gamble not only with other people’s money but with taxpayer guarantees for their losses; an expansion of big money in politics; continuing cutting of EPA’s capacity; the stunning authority to cut the vested pensions of already retired workers and much more

Take one seldom noted, “regrettable” act, nicely summarized today by the valuable Catherine Rampell in the same Washington Post: the cutting of the IRS budget.

After the cuts contained in the Cromnibus, IRS appropriations are 17 percent below their level in 2010, adjusted for inflation, and its enforcement staff is down 15 percent. Meanwhile, the spending bill adds several more “regrettable, not cataclysmic” loopholes, dodges and complications to the IRS code.

The IRS, as Rampell reports, brings in $255 for every $1 it is appropriated. The wealthy and large corporations who can afford tax lawyers milk every dodge they can find. As Mitt Romney showed us, their money winters in the Cayman Islands and summers in the Swiss Alps. When the IRS cop on the tax beat is disarmed, the tax dodgers grow more brazen.

Rampell suggests this insures that voluntary tax compliance will diminish as more and more grow cynical about what the 1 percent gets away with. She concludes that, eventually, tax rates will have to go up to cover the losses, but that’s not really the game.

The tax dodges and crippling of IRS enforcement starve the government of revenue. That enables conservatives in both parties to demand cuts in spending since clearly government must “tighten its belt.” The Washington Post and other bastions of established opinion weigh in somberly to call for “regrettable but not cataclysmic” grand bargains – featuring cuts in Social Security and Medicare – to get deficits under control. Cutting, not raising, revenue is a feature, not a bug.

And of course, as we will witness next year, it also sets the stage for regressive tax reform. The tax code, we are told, has “grown too complicated” – as if this were an act of nature. We should simplify it in “revenue neutral” tax reform that lowers rates while closing loopholes. (Only “show horses” think corporations might contribute an extra dime to vital investments and deficit reduction). “Work horses” like Steny Hoyer, festooned with special interest money, will labor to forge the “messily embodied” compromise.

If successful, as tax reform was under Reagan, the rates come down; some loopholes are closed. Lobbyists then pop the bubbly, for the work of carving new loopholes into the tax code is a new goldmine. And “work horses” like Hoyer can be counted on to support the new tax dodges, “messily embodied” in future deals.

This is the “spirit of compromise” that the Post hopes will “flourish and grow.” Next up: after “revenue neutral” corporate tax reform, corporate trade accords enabling multinationals to expand low wage outsourcing; “repatriation” that gives global corporations a massive tax break to “bring home” the trillion dollars they’ve stashed abroad; perhaps even a “grand bargain” that goes after Medicare and Social Security. Get ready for it.

Yes, the doors will stay open, which is surely a good thing. But the Cromnibus compromise is another step in the wrong direction, a “regrettable, but not cataclysmic” contribution to a country scarred by extreme inequality, growing despair, and deepening cynicism, as its leaders continue to worsen rather than address its pressing needs. That is why we desperately need more “show horses” like Elizabeth Warren who are ready to stand up and say, “Enough is enough.”

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