A former adviser to President Ronald Reagan told a news radio program recently that Republicans “can’t get the job done” with their redux of the 1994 “Contract with America.”
“[If] you’re exempting two-thirds of the budget and you’re focusing only on non-defense discretionary, which actually is only about 500 billion or 15 percent of the budget, it’s pretty obvious you can’t get the job done,” said David Stockman, a former adviser to President Reagan, in a recent interview with National Public Radio.
“Some economic analysts have said that if you do that, that by the year 2020, the government wouldn’t have enough money to spend on anything except for Medicare, Social Security and defense if it’s lucky,” summarized interviewer Guy Raz. “Do you think that sounds about right?”
“Yes, I do,” Stockman replied. “We couldn’t afford the Bush tax cuts when they were put in in 2001, 2003. Now, we’re – eight years later, we’re trillions in additional debt later, we’re two unfinanced wars later, we’re a trillion dollars of stimulus spending later, 800 billion of TARP, so it’s pretty obvious if we couldn’t afford them back then, in no way, shape or form can we even dream about affording them now.”
Republicans and a group of conservative Democrats have, in recent weeks, championed the Bush tax cuts for the wealthy as a driver of economic growth, even as most economists show the program widening America’s deficit by at least $70 billion per year over the next decade.
Stockman told NPR that all Republican-proposed exemptions considered, the party’s “pledge” to America would leave so little room for cuts that national parks like Mount Rushmore would have to be closed, even though the GOP’s actual document [PDF link] carries pictures of public parks.
According to a recent CNN poll, a whopping 69 percent of Americans believe tax breaks for individuals making over $200,000 and families making over $250,000 annually should expire at the end of this year, as the Bush administration had planned.
Eighty-one percent favor extending them for Americans making less than that, which both parties largely agree with.
There is strong agreement between Democrats and Republicans on continuing the tax cuts for individuals earning less than $200,000 per year and families earning less than $250,000 – those making more are set to have their taxes return to Bill Clinton-era levels unless Republicans and dissenting Democrats get their way.
Under Obama’s proposal, individual income above $200,000 would be taxed at 39.6 percent rather than 36 percent come January – even the wealthy would continue to pay the same lower rate for their earnings below that figure.
President Obama has described Republicans’ efforts to block the expiration of tax cuts for the wealthy as standing in the way of continuing tax cuts for the middle class.
According to the nonpartisan Congressional Budget Office, extending all the Bush tax cuts would yield economic growth worth only 10 to 40 percent of each dollar lost in government revenues. But the projections note that continuing the breaks for low income earners would be more stimulative as they would spend more of it than the wealthy.
The CBO added Thursday that extending the tax cuts for all but the rich would likely boost economic growth in the short-run but could hamper it over the next decade as the deficit would rise to 8 percent of GDP by 2020.
Stockman also told NPR that he believes taxes will have to be raised on the vast majority of Americans, whether they like it or not, adding that Obama is being dishonest when he pledges a tax cut for middle-class USA.
The economy is weak because of our irresponsible fiscal and monetary policies over the last 10, 20 or even 30 years, ” he said. “And it’s going to keep getting weaker unless we face up to the problem. So, yes, it’s the chicken and egg. If we cut spending and raise taxes, it may slow down the economy even more, but that’s unfortunately the choice that we face.”
During an interview with Fox News Sunday, House minority leader John Boehner implied that American voters are not yet ready for real budget solutions, which is why the GOP plan leaves so much discretionary spending on the table.
“It seems that Boehner is content to leave the American people uncertain as to what the Republican’s would do to help the economy besides extending the Bush tax cuts,” CBS summarized.
Republicans, long supporters of doing away with Social Security as a national safety net, could effectively end the program and mandate private retirement savings accounts based on the stock market, according to a Baltimore Sun analysis of the party’s pledge.
“Buried in the twenty-one-page document is the real pledge: a discussion of ‘reviewing’ Social Security and other entitlement programs and a commitment to a program ‘requiring a full accounting of Social Security,'” The Nation noted.
“DC bureaucrat-speak, to be sure,” John Nichols continued. “But it is not hard to translate.”
He concludes: “Either the pledge is an outline for massive new debts and deficits or it is a roadmap to the privatization of Social Secuity, Medicare and Medicaid.
“To suggest otherwise would be to engage in what another George Bush once described as ‘voodoo economics.'”