The other day Fred Thompson appeared on a panel, with former Capitol Hill colleagues, and heard the repeated call for budget “compromising.” Over at his website, our old cruisin’ pal explains why he explained that compromise is another way of saying tax hikes. And raising the deficit.
It’s a way to kick the hard can down the road. Compromise is one of the reasons we’re in the fix we’re in today. What is the history of the “raise taxes and reduce spending” compromise that is so popular in elite circles today? It is this: We get the tax increases but not the spending cuts.
After having already enacted major tax cuts in 1982, Ronald Reagan agreed to raise business and excise taxes in exchange for spending reductions. Taxes went up, but so did spending by $450 billion.
President George H.W. Bush cut a similar deal with Democrats. Again, we got the taxes but the spending cuts never materialized.
There is simply no proven way to guarantee that the spending-cuts part of the compromise will be implemented. Is it any wonder that Republicans are taking a hard line of this? Since spending is the source of the problem anyway, cuts must be enacted first.
Meanwhile, even though we balanced the budget for a few years in the ’90s, we have steadily walked toward the edge of the fiscal cliff as our entitlement obligations grow. The edge is where we stand today. The elections in France and Greece demonstrate that it’s virtually impossible to cut spending once the bond markets, because of a country’s profligacy, throw a country into crisis. We must avoid this fate at all costs. But spending controls must be done straight up and not as part of another phony compromise.