After months of negotiations that found congressional Republicans in the unaccustomed position of resisting the extension of a modest tax cut, Congress has passed a package that will prevent a $100 billion tax increase and partly offset some unemployment-benefit and Medicare expenses by wringing concessions from new federal employees, who will be required to contribute more to the cost of their retirement pensions, and by trimming $5 billion from one of the many questionable new programs established under Obamacare.
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While we welcome the newfound Republican hawkishness on the deficit, a salubrious result of the Tea Party’s influence, the GOP’s hesitancy in extending the payroll-tax cut was an odd thing. The arguments that some Republicans made against it — that temporary tax cuts have little or no effect on economic growth and jobs, that there were insufficient offsets to neutralize the revenue effects of the tax cut — might have been made against any number of tax policies that Republicans support with good reason, the extension of the Bush tax cuts prominent among them. This is not the moment, economically or politically, for a tax increase, a fact of which Republicans will want to remind the electorate regularly as President Barack Obama prepares to execute a class-warfare campaign heavy on tax hikes for “the rich,” a group that Democrats keep defining down (from $250,000 a year in Obama’s 2008 election rhetoric to less than $200,000 in his most recent budget proposal).
In addition to raising new federal employees’ pension contributions, the deal contains another worthwhile reform: Funding for federal unemployment benefits will be extended, but the eligibility term for those benefits will be reduced from 99 weeks to 73 weeks — probably still too long, but a real improvement.
Republicans’ reliable advocacy of tax cuts has served the country well economically and the party politically; the row over the payroll tax did neither, threatening to undermine the GOP’s historical advantage on the politically electric issue of taxes. It is true that the payroll-tax cut will contribute to the deficit, albeit modestly, and that is what seems to have captured the attention of those Republicans who resisted it. But the right approach to reducing the deficit is to continue to press for broad, permanent cuts in federal spending, for entitlement reform, and for structural changes to the appropriations process and to the operations of the government itself. If this was an attempt to throw a bone to the Tea Party, it was a pretty skimpy one — Paul Ryan has a great deal more to offer, and he is conveniently situated as chairman of the House budget committee.
It is critical that Republicans remain energetically committed to both sides of the ledger-sheet fight: tax cuts and spending cuts. The main problem contributing to the deficit, as the tea partiers have been especially energetic in pointing out, is spending, not lack of sufficient tax revenue. In the long term, no workable payroll-tax rate is going to make Social Security or Medicare sustainable, and no combined level of federal taxation is going to render Washington’s current spending habits anything less than catastrophic. These are problems that are going to have to be solved, and they are going to have to be solved over the worst sort of Democratic demagoguery that one can imagine. If Republicans cede their historical advantage on taxes, the fight will be that much more difficult. Keep cutting taxes, whenever and wherever possible, and then remind voters in November of what is standing in the way of spending cuts and a return to fiscal sanity.
No, the editorial was good advice. The Democrats' Payroll Tax Rebate (it isn't a cut because it isn't permanent) was always a gimmick and a trap for Republicans, and in opposing it they created a political mess for themselves.
Democrats love gimmicky, temporary tax credits and rebates - anything except permanent reductions in tax rates - designed to fool voters and perhaps goose the economy with a temporary sugar high just long enough to get themselves re-elected, at which point they bring the tax-hammer down - hard. The Payroll Tax rebate won't help the employment situation because it isn't permanent - employers do plan past the next fiscal year, even if Democrats don't. They were merely trying to insincerely pose as tax-cutters for their short-term political benefit.
The only way to tackle the deficit is to cut spending. Republicans know this, and Democrats don't care about the deficit at all. If the Democrats offer insincere "tax cut" proposals, Republicans should go along, as long as they don't have to give the Dems the permanent tax rate hikes they want.
The only way to address the deficit is to cut taxes?
What is up with Republicans? Do they really think if they make statements that defy elementary arithmetic often enough, that the public will believe them?
We aren't going to be able to address the deficit until there are enough Republicans in Congress with an elementary grasp of arithmetic. Spending too much time in political science classes and not enough time in math classes has obviously done something deadly to the Republican mind.
The Tea Party initially aimed criticism at both parties for overspending. Over the years the Republicans infiltrated the Tea Party and are still in the process of taking it over, and they've managed to direct most of the criticism at Democrats. Welker is right on the money hitting it right on the noggin in his comments.
But I personally don't think the Repubs are going to lead us out of this. I'm with the original Tea Party in that BOTH parties are at fault. I don't know what it would take. The voters certainly aren't going to elect anyone who will cut their freebies.
Indeed. Ronald Reagan has been spinning in his grave ever since Grover Norquist took over the GOP. The Gipper raised taxes seven out of his eight years as president, and God bless him for it.
He couldn't run for dog catcher today, unless he switched parties.
I don't know what class you were in but your reading comprehension and your simple math classes but you missed what he said -
The only way to address the deficit is to cut spending -
In my simple math class - third grade if I remember correctly - when you spend more than you take in - you have a deficit or as my teacher said - a minus for the answer.
David, What is it about magical thinking (cut taxes, reduce deficit) that you don't get? Hell, if you wish hard enough, you can even increase defense spending and cut the deficit even further! Cordially, Bill
The article said that cutting the excessive spending was most important. Cutting tax rates can increase revenues. However, these Demagogcratic rebate gimmicks are just tactical maneuvers with the goal being power not fixing the deficit.
It would be fascinating to pick a 1000 Republicans and 1000 Democrats to empirically prove which is better at math. And might explain how the president's supporters would be impressed by budget cutting of a big $100 billion rather than a mere net $1.5 trillion increase.
There's a chart (linked below*) that the Democratic Party continues to fraudulently disseminate about how supposedly Reagan and Bush were bigger deficit spenders than Obama. And this is even after even the Washington Post said the "chart ...created by the office of House Minority Leader Nancy Pelosi, is as phony as a three-dollar bill". Weak math skills math may help to explain why the chart seems plausible to some Democrats, paired with their soul-destroying hatred for Reagan and Bush.
Finally I want to give a shout-out to all the Obamabots for posting here on NRO because it helps us conservatives get a window into your thinking and debunk it. All your efforts posting might just help us to win a close election. Thanks!
David Welker, what is it about magical thinking that you don't grasp? Of course we can lower taxes and increase defense spending and put soc sec/medicare on a sound financial footing while we lower the deficit. You just have to believe. Cordially Bill
If you took Econ 201 you would have read "The Worldly Philosophers." It covers Adam Smith to Karl Marx and Keynes. If it was just about adding and subtracting, there would be no subject called Economics. It's not bookkeeping.
The Laffer Curve makes the case that a tax rate of 0% or 100% generates no revenue - which is obvious when it's pointed out. It follows that somewhere along that curve is the tax rate that will provide maximum tax revenue. That means that a tax rate beyond that point would have to be counter productive.
I think you really need to take an economics class - raising tax rates - permanent and gimmick short term - both adversely affect output and labor - if you confiscating more the harder I work, I'll work less.
Remember, its MY money, not yours and not the governments. We'd be infinitely better off in cutting off all spending (save for military). I'm 100% for cutting federal welfare and if you don't like it, I suggest you start donating a lot more time and money to charity.
The only thing the Republicans support energetically is their own re-election. My definition of a tax cut would be something like this:
1. a flat income tax of 10 percent
2. No corporate tax at all
3. No death tax
4. No cap gains tax
I know: we couldn't afford that kind of tax plan with our current federal spending levels. So let's reduce government spending to 10 percent of GDP. 60 percent of that could go to security.
That's energetic support for less spending and taxation, not the milk-toast Republican half-measures where you increase spending today in return for a phantom cut in spending ten years from now.
I agree with David Welker that encouraging lawmakers to support tax cuts no matter what is misguided and probably wasn't subject to much thought or discussion.
But I have to applaud this column, and I would like to encourage National Review and conservative columnists to write more about spending cuts. We are (and have been since long before Obama was inaugurated) spending ourselves into insolvency. The projected spending over the rest of our lifespans doesn't show any improvement. We need leaders with backbones who are not just aware of our problems but have the courage and integrity to tell voters the predicament we're in and make reasonable proposals to address this problem.
This is going to mean criticizing ourselves. This is going to mean criticizing Newt for his ridiculous moon colony idea before Saturday Night Live does. This means holding John Boehner in contempt until the day we die for his voting for and support of the outrageous Medicare prescription drug bill. This is going to require that we learn to discuss issues reasonably and refrain from immature name-calling just because someone disagrees with us.
This is not the 80s. It's not the 90s. If we had addressed these problems back then we wouldn't have this problem. But before it's too late, let's roll.
I agree with David Welker that encouraging lawmakers to support tax cuts no matter what is misguided and probably wasn't subject to much thought or discussion.
But I have to applaud this column, and I would like to encourage National Review and conservative columnists to write more about spending cuts. We are (and have been since long before Obama was inaugurated) spending ourselves into insolvency. The projected spending over the rest of our lifespans doesn't show any improvement. We need leaders with backbones who are not just aware of our problems but have the courage and integrity to tell voters the predicament we're in and make reasonable proposals to address this problem.
This is going to mean criticizing ourselves. This is going to mean criticizing Newt for his ridiculous moon colony idea before Saturday Night Live does. This means holding John Boehner in contempt until the day we die for his voting for and support of the outrageous Medicare prescription drug bill. This is going to require that we learn to discuss issues reasonably and refrain from immature name-calling just because someone disagrees with us.
This is not the 80s. It's not the 90s. If we had addressed these problems back then we wouldn't have this problem. But before it's too late, let's roll.
Every federal department except the military should have its budgets cut by 20 percent, with entire departments eliminated.
Double the allowances. If regulatory burden starts at ten employees, or a hundred employees, double those numbers up to companies employing a thousand people.
GOP--taxes are not an issue. Hello. 80% of tax payers pay 0 federal tax. they don't care. If Santorum get's elected their refunds will triple provided they have some more babies or as the case may be, grand babies that are so frequently fraudulently claimed.
So, GOP go right on making tax cuts ur main issue. Good with about 10% of the voting population.
Let me start off by saying that I am a Goldwater Republican. The TAX-CUTTING mono-mantra of the Republicans is based on the Laffer curve which supports the idea that DEPENDING WHERE WE ARE ON THE CURVE government revenues may be increased by cutting taxes. While I subscribe this theory to some extent I subscribe to the following unequivocably:
GOVERNMENT SHOULD TAX WHAT IT SPENDS!
If we force today's taxpayers to fund what the government spends rathers that taking the money from our grandkids, spending will come down. Cutting Social Security taxes when Social Security is already in a deficit is COMPLETELY INSANE.
