All We Get is Radio Ga Ga, Radio Goo Goo, Radio Blah Blah

Blah Blah Blah .... the Deficit Reduction Commission is going to come out with its revised report which will claim to be tough on spending (but won't) and will raise taxes, retirement age and reduce benefits, claiming to reduce the deficit someday that we will likely never see.

Spending Cuts First

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.

Deficit Panel Will Vote Friday on ‘Stronger’ Plan

November 30, 2010 5:08 P.M.

By Andrew Stiles

Deficit commission co-chair Erskine Bowles echoed his former boss in a press conference Tuesday afternoon, declaring: “The era of deficit denial in Washington is over.”

Bowles and his fellow co-chair, former senator Alan Simpson, praised the commission’s hard work and announced that the final report will meet its Dec. 1 deadline. Commission members will receive copies of the plan later this evening before it is released to the public tomorrow morning. In order to give members time to review the plan, the co-chairs said they will wait until Friday to vote on it. “We’ll meet tomorrow, we’ll discuss the plan, and we’ll ask for their decisions by Friday,” Bowles said. “Some will indicate tomorrow where they stand.”

The plan needs the backing of at least 14 of the commission’s 18 members in order to be considered for congressional approval. Bowles said that while he couldn’t predict how many members would support the final plan, he was confident the commission’s work had been a success. “Al and I couldn’t be happier with where we are in the process,” he said. “Regardless of how the vote turns out, I think we’ve won and we’ve won big.”

Bowles said the final plan was better than their initial recommendations, or chairman’s mark, released Nov. 10. “The plan we submit tomorrow…it’s not going be some watered down version of the chairman’s mark, that I can guarantee you,” Bowles said. “We have met with and listened to every single member of this commission and we think they have made this plan stronger.”