When the Republicans come to the House of Representatives this January, they have pledged to do many things. They will repeal health care reform. They will balance the budget. Most importantly, they want to cut taxes on the rich, raise taxes on everybody who isn’t, and cut support for the needy.
No, Republicans have not said, “We want to tax the poor and the middle class.” Saying that with your out-loud voice doesn’t sound good, after all. They instead used their tried-and-true slogan: "Tax cuts are the answer to all of our problems!"
However, when you take a look at their policies in the context of a bigger picture you get a better idea of just what they are doing and how they are doing it.
In terms of budget, they have said that they will do the following things simultaneously: they will leave military spending alone, which will raise our deficit; they will not cut Social Security benefits, which is deficit-neutral; they will cut everybody’s taxes, which will raise our deficit; they will reduce government spending, which will reduce our deficit; they will completely erase the deficit, which is fiscally impossible; and they will reduce our nation’s debt, which is doubly fiscally impossible. It’s an appealing platform. A lot of people think they can do all of that, which is why they voted for them. Hell, if they could actually do all of those things I’d vote for them too. One bowl of Sugar Bombs with a packet of Six Impossible Legislative Ideas Before Breakfast, please!
When you look at the numbers closely you'll see there’s no way they can deliver.
Think about this: when Republicans say they want to reduce taxes, that means reducing how much money the government can spend without borrowing. Borrowing means deficit and debt. Right now the government has a budget with under $700 billion in non-military discretionary spending. This ranges from infrastructure work to social safety net to farm policy to, well, you name it and if it isn’t the military but it’s discretionary then it comes from here. Every other dollar goes to servicing debt and paying for non-discretionary items, like Social Security and Medicare.
Since Republicans refuse to consider cuts to military spending, which current stands at over $900 billion, this means that all they can cut would be that not-quite-$700 billion. Our deficit this year stands at well over a trillion dollars. Even if they took away food stamps, slashed unemployment insurance, stopped all social welfare and cut all infrastructure projects immediately they could not close the gap.
That estimate is without any tax cuts whatsoever. If government does cut taxes then our deficit will grow even faster. If the tax cuts were targeted at the poorest then I would accept them as useful, as poor people don’t have dollars to save and our economy is based on people spending money to buy things. Tax cuts for the wealthiest, though...
Nearly ten years ago, President Bush said that tax cuts for the wealthy could be done because the economy was good and it would stimulate job growth. After sluggish job growth the first several years of his administration, well, you probably know what happened. We had a financial collapse and lost millions of jobs. That policy, in short, didn’t work.
Right now, Republican Eric Cantor, part of the Republican leadership in the House, says tax cuts for the wealthy are the best way to encourage people to prime our economy to invest in new jobs. He didn’t actually say how this would work, only that it would. We already tried that during the Bush years when the economy was putatively decent and people were able to buy things. If there’s nobody able to buy things now, why would the richest invest their money creating jobs to make and sell things that the rest of us just can’t afford to buy?
Now, about the GOP wanting to tax everybody else more while cutting taxes on the rich: they have already said that a tax cut for everybody but the rich is patently unfair. However, in a nod to supposed fiscal prudence, they are grudgingly discussing how to shore up Social Security. One proposal on the table would be to slowly raise the retirement age to 70 from its current target age of 67. This would mean that people would pay Social Security taxes for three years longer before getting benefits. They are proposing this at the exact same time that they say they want to permanently cut taxes for the richest 2%, but they do their best to avoid talking about both proposals at the same press conference. Where will the money get made up? In the long term, our poor and middle class seniors will be paying for this tax cut for the rich. I don’t think anybody could call that tax fairness.
The GOP doesn’t want to even talk about making Social Security a flat tax instead of an actively regressive tax, where the poor pay a larger percentage of their income than the rich. After all, wanting the rich to pay taxes is so unfair. Poor and middle-class people should be happy to pay high prices for the privilege of living here.
I would love it if my taxes could go down while maintaining services and vital infrastructure. Unfortunately, there’s no way that will ever happen with the current budget without borrowing huge sums of cash. We’ve done plenty of that before, usually under Republicans. Are we facing another round of borrowing? I don’t know. What I do know, however, is that no matter what goes wrong the Republicans will do their other tried-and-true strategy: blame the Democrats.
I wish the Republicans good luck with lawmaking. I want them to do a good job.
I’m just not holding my breath.