The Left's Deficit Fantasy
How many ways can Barack Obama say, "Suck on it, liberals?" Most of us would prefer not to count, but the latest one is called " Bowles-Simpson" and its sole value appears to be to, once again, piss off the base.
On the one hand, it's admittedly childish to get too upset about a draft of a commission report that does not even agree with itself—there are multiple scenarios laid out in the draft—and is unlikely to be approved by the necessary 14 of the 18 members. Its likelihood of being approved by the House and Senate and signed into law by the president is only slightly less likely than the state of Oklahoma adopting Sharia law
What's the beef? Well, in the first place, a commission like this one is needed only if you assume that the Democrats are going to cave on the Bush tax cuts for the wealthiest Americans and much of it disappears into the ether. Second, the package offered in the draft includes more than $600 billion in spending cuts with additional changes to fees, services, and the tax code designed to yield just under $175 billion. Get it? The authors' idea of a fair balance between cuts in services and increased revenue is a bit more than three times as much of one as the other.
And the manner in which these reductions are to be achieved is fishy right from the start. For instance, we are supposed to reduce, substantially, the number of federal employees. OK, great, who is going to do the work? Outside contractors—like in Iraq? Well, actually, no, Stan Collender notes. They also call for major cuts in the use of contractors. And how about this three-year freeze on the salaries of all federal employees? Is the problem facing government now that people on Wall Street and in the top law firms are so eager to leave their jobs and do this work that it looks like a good time to make government work less attractive? (And these workers with the frozen salaries will be doing the work of more people, owing to the above. Yeah, that's the ticket….) What else? Well, Messrs. Simpson and Bowles call for a $3 billion reduction in annual farm subsidies. Great plan. Are the agricultural lobbies on board? Because they seem to have done a pretty good job of avoiding this kind of thing since time immemorial.
The authors' idea of a fair balance between cuts in services and increased revenue is a bit more than three times as much of one as the other.
Another great idea—and one that is no less transparent in its cold-day-in-hell-never-going to-happen-ness—is the commission's notion that the salaries for our soldiers and benefits to veterans need to go under the knife. Interesting that while the authors think that our servicemen are living too high on the hog, they are unable to indentify any military hardware at all that might be a bit excessive, even though much of it was designed to fight an enemy that hasn't existed in a decade and a half. (It's not that they don't want any cuts in the procurement budget. They call for a 15 percent reduction. They just won't say where they should come from. As if these weapons programs do not exist in the first place because their manufacturers and their representatives chew up and spit out commissions like this one.) The silliest of the gimmicks on display is the one that says we can save $11 blllion a year just by appointing a congressional committee to cut another $11 billion a year. (This reminds me of Steve Martin's line about how to make a billion dollars by curing cancer. "First, find a cure for cancer…" ) Oh, I almost forgot: They want school kids to pay for admission to the Smithsonian. That ought to raise a few bucks.
There's some funny math, too. The commission calls for capping health-care expenditures at the GDP growth plus 1 percent, but offers no mechanism by which to do this, save perhaps fairy dust. They want to cap all expenditures at 21 percent of GDP, but in doing so assume that health care will be capped at the rate described above. Get the game now?
What's more, they want to wring a ton of savings out of Social Security owing to problems they predict arising sometime after 2037. As the Roosevelt Institute's Rob Johnson points out, "This collection of wise men are ones that could not see the financial crisis right before their eyes in 2007, but somehow they are clairvoyant about the train wreck of 2037."
Oddest of all, perhaps, is why Messrs. Bowles and Simpson thought it necessary to include a cap on taxes. To be fair, they raised them a bit from what we've been used to paying in the past: from 19 percent of GDP to 21 percent. But why are they capping revenue? Their job was to raise revenue. In fact, according to OECD figures, the U.S. tax burden on individuals remains remarkably low when compared with other industrial countries. And if they are so hot on raising taxes, might they have a few ideas on how to do it? Where, for instance, is the popular notion of a carbon tax, one that would help address the problem of global warming as it simultaneously raises revenue for investment in cleaner, more earth-friendly forms of energy? Alas, most Republicans got elected pretending that God is going to solve this problem. And how about a flip tax on financial securities, which has been recommended not only by commie economists like James Tobin, but also by the IMF. Instead, in one scenario we hear about the elimination of the Earned Income Tax Credit, which is just about the most cost-effective anti-poverty program ever created. Nowhere, moreover, do we get the sense that all these proposed spending cuts might not be such a hot idea for an economy fighting its way out of the deepest recession and worst jobs crisis the country has experienced in 80 years.
Clearly, the commission was afraid to take on the um, elephant, in the room, which is the Republican argument that we must cut benefits for poor and middle-class people in order to finance continued tax giveaways for the extremely wealthy. The likely reason for this is that they believe it. But if so, why in the world did Obama and company agree to give them the power and visibility to make this argument at the moment when some backbone is so crucial in avoiding its implementation? Why did they appoint co-chairmen who are both well to the right of the economic philosophy for which the president is fighting in his battles with European governments? Talk about liberals who won't take their own side in a fight. This administration won't even admit it has a side at all.
Eric Alterman is a Distinguished Professor of English and journalism at Brooklyn College, a senior fellow of the Center for American Progress and media columnist for The Nation. His newest book, Kabuki Democracy: The System vs. Barack Obama , is available for preorder.