Spending Cuts First

by Jonah Goldberg

Before the holiday, Steve Moore and Richard Vedder had a good op-ed on why they think higher taxes won’t reduce the deficit. They write:


This is exactly the opposite of what the tax-increase lobby in Washington is preaching today. For example, Erskine Bowles, co-chairman of the president’s deficit reduction commission, suggested at a briefing several months ago that there will be $3 of spending cuts for every $1 of tax increases. Sound familiar? Reagan used to complain that he waited his entire presidency for the $3 of spending cuts that Congress promised for every dollar of new taxes he agreed to in 1982. The cuts never came.

We’re constantly told by politicos that tax increases must be put “on the table” to get congressional Democrats—who’ve already approved close to $1 trillion of new spending in violation of their own budget rules over the last two years—to agree to make cuts in the unsustainable entitlement programs like Medicare and Social Security.

Our research indicates this is a sucker play. After the 1990 and 1993 tax increases, federal spending continued to rise. The 1990 tax increase deal was enacted specifically to avoid automatic spending sequestrations that would have been required under the then-prevailing Gramm-Rudman budget rules.

As an economic matter I’m basically in their camp, though I think you can make the case that many Americans are charged too little for the amount of government they get. My solution would be less government.

But as a political matter, what would be wrong with offering the following deal: All tax hikes must be triggered by spending cuts. As I understand it, most of the tax hikes in the White House commission’s plan come from elimination of tax breaks, the actual rates would be lower. Regardless, however you define tax increase, why not say they can’t kick-in until the spending cuts have been enacted? There’s a similar argument in the immigration debate. Some folks, including me, are sympathetic to the idea of some kind of tough amnesty if it’s the last amnesty, ever. But amnesty without securing the border is a sucker’s game, as we learned in the 1980s.

Why not have liberals play the role of Reagan this time? Let’s have the spending cuts first and then, once Congress has proved its seriousness, discuss tax policy. We know we need the spending cuts no matter what. Even many liberals agree with that. Then they can complain about how they’re waiting for their promised tax hikes.