Monday, December 10, 2012

Straight Talk on the Budget....

I generally don't read Jennifer Rubin. I think she's smart enough to write something interesting or informative, but she has no apparent inclination to do so, and she lacks the capacity to spin her talking points into something less overtly partisan in the manner of David Brooks. In fact, she's so ridiculous in her partisanship, much of what she writes could pass for comic relief.

But one of her gazillion headlines (yes, she's prolific) in my news feed caught my eye: "Can anyone offer straight talk about the budget?" That's a fair question. Her opening is actually pretty good,
Republicans are touting a Battleground poll that finds:
Three in four voters want to “cut government spending across the board,” but 59 percent oppose making significant cuts to the defense budget and 46 percent support ending foreign aid. The slightest majority backs reducing Social Security and Medicare benefits for seniors that have higher incomes, but 64 percent oppose raising the retirement age to begin collecting Social Security benefits.
But, wait. The same poll finds “60 percent of respondents support raising taxes on households that earn more than $250,000 a year and 64 percent want to raise taxes on large corporations.” However, “69 percent of respondents oppose raising taxes on small businesses that earn more than $250,000 — a group that the GOP is trying to protect with its push to extend the Bush tax cuts.”

In other words, the American people want cake and ice cream for dinner – and a unicorn. They want contradictory things. They imagine the only taxes that need go up to sustain the entitlement programs as currently constituted are those of mega-millionaires. They don’t perceive the trade-offs between unrestrained entitlement spending and pressure to cut other spending (e.g., education). They apparently don’t understand that many small businesses pay taxes under the personal income tax code, making them “the rich.”
One wonders why Republicans would be touting a poll that, even when they try to spin it in their favor, doesn't do much to advance their agenda. I guess they don't have much else to work with. But where Rubin quite predictably falls on her face is in her failure to understand (or is it to admit) why voters operate under the misconception that we can cut taxes, increase military spending, sustain Medicare and Social Security at present levels, and somehow at the same time balance the budget by "cutting waste" and reducing public assistance directed at the "undeserving poor". Did she somehow miss that the mindset she laments, the one I just described, reflects exactly what Mitt Romney claimed that he could to if elected President?

Or is it that her ideological blinders are up and fully operational?
It is not that politicians are bad communicators, although some are. It is that they do not want, as President Obama keeps instructing, to do the math. If they did, they’d have to concede, for example, that raising taxes on the rich raises a pittance compared to our $16 trillion debt.
This is an echo of a Republican talking point that I have often criticized. The argument is basically, "Taxes on the rich won't raise enough revenue to be worth it, so we shouldn't bother with a tax increase." Letting the Bush-era tax cuts on the wealthy expire would produce roughly $85 billion per year in tax revenue. What sort of "serious" spending cut proposal do we get from the Republican Party? Cutting the @$445 million contributed to the Corporation for Public Broadcasting? John Boehner has proposed changing the manner in which Social Security benefits are indexed to inflation in order to save $20 billion per year - if $85 billion is too little to be worthy of consideration, why is Rubin's party of choice intent on pursuing targets that are comparatively small, even trivial?
In particular — and this is critical in assessing the president’s moral obligation — Obama has not prepared the American people for the fiscal changes that are needed. He’d rather score political points than be honest with voters. He’s got the biggest megaphone and if he doesn’t level with voters, they aren’t going to get it. (So he doesn’t. And they don’t.)
Oh, no doubt, politicians of both parties don't want to "prepare the public" for the consequences of balancing the budget. But again, Rubin's complaint represents the Republican agenda - her party does not actually care about balancing the budget. There is nothing that stops Speaker Boehner from gathering the Republicans in Congress and passing a serious, balanced budget, save for the fact that they don't want to.

Presidents who try to level with voters about the state of the economy and the hard choices that lie ahead... That would be Jimmy Carter and... um... perhaps only Jimmy Carter. It's admirable that Rubin rejects the sunny but false optimism of Reagan and the fiscal incompetence of George W. Bush,2 but the problem is twofold. First, the problems the economy faces from debt are exaggerated, and the politicians staging this "high stakes drama" know that. Second, politicians on both sides of the aisle want to be re-elected, so whenever possible they prefer to whisper sweet nothings in our ears over sharing harsh truths.

The net effect? In a few years a Republican will run for the White House, probably on a budget "plan" that sounds very much like Romney's, and Rubin (if she's still around) will be one of his primary cheerleaders. Lather, rinse, repeat.
1. From NPR, "For High Earners, Expiring Tax Cuts Would Hit Hard".
"Virtually everyone in his income category will see their taxes rise an average of about $14,000," says Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center. "That's about a 5 percent reduction in their after-tax income, and 5 percent is something that's, even at that income level, noticeable."
Yes, I agree. Having your monthly take-home pay drop from @$23,333 to @$22,166 is something that you're likely to notice. But if we are to compare relative hardships in the modern economy, having somebody in that income range complain "I will have to decide what to do for vacation. I may not be able to put as much away for purchasing a replacement car when my car dies" reflects a pretty significant disconnect from the daily experience of most families.

2. I know, I know, but let's pretend she's thought this through.

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