On Monday, President Biden met with 10 supposedly moderate Republicans in the Oval Office to discuss their scaled-down $618 billion Covid-relief proposal. Even though the economy is still reeling from the pandemic and tens of millions of Americans are struggling to feed their families and put a roof over their heads, they are very concerned about the $1.9 trillion price tag on Biden’s plan. Lately, it seems, Republicans have taken renewed interest in deficits and our growing national debt. That’s because a Democrat is in the White House.
When a Republican is president, deficits don’t matter. In fact, that means it’s time to cut taxes — on the wealthy. Republicans’ purported thinking is that tax cuts on high-income earners will incentivize economic growth and thus, as calculated through something called “dynamic scoring,” will produce far more revenue, which in turn more than pays for the tax cuts. This actually never happens. Remember the Laffer Curve? If not — look in the dictionary under “discredited.”
You may remember that I wrote a book titled Rush Limbaugh Is a Big Fat Idiot and Other Observations. Undertaking the painstaking — I’m sorry, painful — research, Rush did make an arguably valid point about the Laffer Curve. “If you had to pay a 100 percent tax rate on your income, you wouldn’t work!” Of course, Rush was absolutely right. Almost everyone should pay somewhere between 0 percent and 100 percent in order to optimize productive economic activity and everyone’s well-being.
And, yes, out-of-control debt can be an existential threat to a nation. The question becomes: “When is it out of control?” To Republicans, the answer is simple: “When a Democrat is president.”
The record, of course, is almost exactly the opposite. The national debt nearly tripled under Ronald Reagan, who gave huge tax cuts almost exclusively to the top of the income ladder. (In fact, because of a substantial increase in the payroll tax, taxes actually went up for the bottom 40 percent.)
During George H.W. Bush’s single term, the national debt increased by 54 percent. Without a single Republican vote, Bill Clinton increased marginal tax rates for the affluent at the beginning of his two terms. Instead of leading to a recession, as every Republican House and Senate member had predicted, we experienced eight straight years of marked economic growth and a balanced budget with a surplus that George W. Bush inherited.
During his first debate with Al Gore, W. touted his tax-cut proposal: “By far the vast majority of my tax cut goes to those at the bottom.” Not just “a majority.” Not “a vast majority.” But “by far a vast majority.” Not one of those was true. In fact, the vast majority of the Bush tax cuts went to those at the top. When W. took office, Federal Reserve Chairman Alan Greenspan endorsed Bush’s tax cut not only as fiscally prudent, but necessary. The looming budget surpluses, Greenspan feared, would pay off the entire federal debt before the end of the decade! If the surpluses didn’t end when our debt was paid off, it could cause serious economic disruption. Large tax cuts, Greenspan said, were necessary to avoid that catastrophe.
That particular catastrophe certainly was avoided. By the time George W. Bush handed off the worst economy since the Great Depression to Barack Obama, the national debt had again doubled, and Americans were losing 800,000 jobs a month. I was in a recount at that moment, and Arlen Specter was still a Republican. Which meant that Democrats were two votes short of the 60 needed to stop any Mitch McConnell-led filibuster. Even before Obama had taken his oath of office, McConnell told his caucus that their goal was to make sure that he was a one-term president. To that end, and because of a suddenly revived concern about our national debt, McConnell and his caucus kept rejecting White House stimulus-package proposals.
Finally, with three votes from Specter, Susan Collins, and Olympia Snowe, the Senate passed a pared-down $787 billion package that added tax cuts and reduced the Obama plan’s infrastructure spending. Not one House Republican voted for the bill.
After I was finally was sworn in on July 7th, a senior Democratic colleague told me that the Senate was the worse it had ever been. Everyone agreed except Carl Levin of Michigan, who said, “Well, it’s been worse.”
“When?” I asked.
“1856,” replied Carl.
“Charles Sumner?”
“Yes.”
In 1856, abolitionist Sen. Charles Sumner of Massachusetts was savagely “caned” within an inch of his life by Rep. Preston Brooks of South Carolina.
Things get worse.
Of course, things have gotten much worse in the Senate since Carl told me things were somewhat better there than they had been in the lead-up to the Civil War. These days, Republican senators are perfectly willing to undermine Americans’ faith in our democracy.
In early 2010, Alan Simpson and Erskine Bowles released a detailed plan to reduce the national debt as a percentage of GDP. Simpson-Bowles had some very good things in it — it would tax capital gains and dividends as ordinary income. It assumed the Bush tax cuts would expire at the end of 2012, and use that as a baseline.* It had some very bad things in it. It would reduce student loans. It would decrease Social Security benefits by tying cost of living adjustments to the Consumer Price Index.
*“Baseline” takes a bit of explanation. Simpson-Bowles assumed that the Bush tax cuts would expire as scheduled in 2012, and made its computations using the pre-Bush tax rates as a “baseline.” But the Bush tax cuts were extended during the 2010 lame duck session, and the baseline shifted. As Mitt Romney’s running mate, Paul Ryan would use “baseline” to get out of any tight spot whenever pressed about his bogus budget numbers. “It depends on which baseline you use,” was Ryan’s escape hatch. Interviewers knew that any follow-up would elicit a deliberately tedious, time-killing explanation of baselines guaranteed to send their audience elsewhere.
Simpson-Bowles was also a way for members of Congress to virtue-signal about getting the debt under control. Thing was, we were still in the middle of the worst economic crisis since the worst economic crisis in our history. It didn’t seem to me to be the right time to trim our sails.
Nevertheless, Republicans, who hated many of its provisions, professed to be Simpson-Bowles supporters. Some Democrats did as well to demonstrate their seriousness about fiscal responsibility. There seemed to be some opportunity here for bipartisanship, and some months later, Mark Warner of Virginia and Lamar Alexander of Tennessee formed a bipartisan group to discuss stuff that we could maybe agree on.
Mark was nice enough to invite me, and I was very happy to go. I genuinely liked a number of my Republican colleagues. My wife, Franni, and I and Tom and Jill Udall would regularly join Republicans Mike and Stephanie Johanns of Nebraska and Mike and Diana Enzi of Wyoming for dinner at one another’s homes. The Enzis and the Frankens threw pizza dinners for each class of Senate pages. Once Diana proudly told the pages that, when she and Mike were back home in Wyoming, they never asked folks whether they were Republicans or Democrats. “You don’t have to,” I interjected, “they’re all Republicans.”
I’m afraid I kind of blew it at the meeting. I noticed right away that my late colleague, Tom Coburn of Oklahoma, was there. Tom, an ob-gyn before he got into politics, was known as “Dr. No” because he was the most committed deficit hawk in the Senate and would routinely place a “hold” on any bill that would add a dime of new spending.
As I listened to the discussion, it began to dawn on me that the Republicans were simply committed to making it impossible for Obama to succeed. Unemployment was still above nine percent. These Republicans had all been cheerleaders for the Bush tax cuts. And none that I could remember had said a peep in 2004 when former Treasury Secretary Paul O’Neill revealed that Dick Cheney had informed him that “deficits don’t matter.”
As with many such things in the Senate, the meeting wasn’t really on the level. Or so it seemed to me. It did occur to me later that I hadn’t needed to share that with all of them. I wasn’t invited back.
After Republicans flipped the House in 2010, everything became increasingly difficult. In 2011, House Republicans put a gun to the collective noggin of the Democratic Senate and President Obama by threatening to default on our debt by refusing to raise the debt ceiling. At the 11th hour, Democrats agreed to what became known as “sequestration,” which mandated about $100 billion in cuts annually, almost all in discretionary spending.
My Republican colleagues were shocked when Obama won re-election. The economy continued to recover, and when Donald Trump took the oath of office for his first and only term as chief executive, he inherited 76 straight months of economic growth.
And worse.
Like W., Trump campaigned promising a tax cut geared to low- and middle-income Americans. And like Bush, he was bullshitting.
During the floor debate on the Republicans’ 2017 tax cut, I approached Tim Scott of South Carolina, their floor manager for the bill. “You know, this is going to explode the deficit.”
Tim told me it wouldn’t because of — wait for it — dynamic scoring.
“No,” I insisted. “Your own Congressional Budget Office says it will create another $1.9 trillion in debt.” The CBO is the nonpartisan agency that provides Congress with budget and economic research. I used “your own” CBO because, holding majorities in both the House and Senate, Republicans had chosen the CBO director. And when the CBO “scored” the Republican tax cut, it estimated that it would add $1.9 trillion to our national debt.
I’d previously had just enough conversations with Tim to know a few things. Despite all historical evidence to the contrary, he really did believe that this new tax cut would pay itself. But even if it didn’t, that would be OK with him. Not that he liked federal debt. But it did serve as a great excuse to impose severe limits on spending. You see, Tim is of the Grover Norquist “I want to reduce the size of government to where I can drag it into the bathroom and drown it in the bathtub” variety.
During one of our discussions on the floor, Tim even told me that he didn’t believe that government created any jobs. Forgetting for the moment that both of us had government jobs, I mentioned the Erie Canal. Also, rural electrification. And the transcontinental railroad. Oh, and how ‘bout the interstate highway system? The space program. (I knew Tim enjoyed watching live sports carried by satellite.) And the internet (formerly known as the Internet).
Cleverly, right there on his feet, Tim revised his economic thesis to an equally ridiculous claim — that the government doesn’t create any net jobs. You see, government investment in each of the things I‘d mentioned could have been replaced by far more efficient private investment. Who knows? Maybe we’d have landed a man on the moon during the Roaring Twenties! How great would it have been to see astronauts dance the Charleston at zero gravity?!
As it would turn out, the enormous tax cut had, at first, some stimulative effect. The private sector invested some of its newfound tax savings on capital equipment, hiring, and even some modest increases in wages — mostly one-time bonuses. But mainly, corporate America was using its windfall, as predicted, on stock buybacks. The market continued to shoot up, which was particularly good news for the 10 percent of Americans who own north of 80 percent of all stock-market wealth.
As for national debt? By October 2019, before the coronavirus pandemic was something Trump could not even dream of bungling, the CBO projected the U.S. deficit for the year to hit $984 billion, almost $300 billion more than the CBO had predicted prior to the 2017 Tax Cut and Jobs Act. Meanwhile, job growth in the first three years of the Trump administration was proceeding at a slower pace than it had during the previous three years of the Obama administration.
And then came 2020.
The United States entered the decade last among developed nations in income and wealth inequality. Or, I guess, first. By far!
For the moment, let’s put aside Trump’s criminally negligent handling of the coronavirus. Oh, let’s not.
In the past, the United States would have led a global effort to fight a global pandemic. During the 2014 Ebola crisis, the CDC was the first to identify what was happening in Liberia. The CDC moved in. Our military put up hospitals, and our public-health and medical professionals led a truly global effort to treat the sick and dying and successfully contained the outbreak to West Africa. In the end, two Americans died of Ebola.
In contrast, when Covid hit the United States, Trump punted responsibility to the states. It’s as if FDR had said after Pearl Harbor, “This is pretty much Hawaii’s problem.”
By March, Congress and the White House had agreed to a $2 trillion package to help Americans through the pandemic. Individuals earning less than $75,000 a year would receive a check for $1,200. There was $250 billion to add an additional $600 weekly to unemployment checks. $150 billion for state and local governments, and $130 billion for hospitals. In April, there was an additional $484 billion for the Paycheck Protection Program, and $75 billion more for hospitals and a woefully underfunded, terribly administered testing program.
Inexplicably, $70.3 billion would go to real estate investors in the form of restored tax breaks. Nearly 82 percent of those benefitting would receive $1 million or more, according to the House and Senate’s nonpartisan Joint Committee on Taxation.
So much for Congress’ laser focus on making sure low- and middle-income Americans could make it through the pandemic.
Fortunately, Trump told us, Covid would be all over by Easter, and urged Americans to celebrate the Resurrection by crowding into church pews around the nation.
By July 22nd, after the numbers of American dead from Covid had reached nearly 150,000, a Texas senator named Ted Cruz let everyone know that the whole thing was a big hoax:
“I guarantee you the week after the election, suddenly all those Democratic governors, all those Democratic mayors, will say, ‘Everything’s magically better. Go back to work. Go back to school. Suddenly all the problems are solved.’ You won’t have to wait for Biden to be sworn in. All they’ll need is Election Day and suddenly their willingness to just destroy people’s lives and livelihoods, they will have accomplished their task.”
To Cruz’s credit, three days after the election, he apologized and humbly asked for forgiveness.
No. Wait. I’m wrong.
Thank God for my fact-checker.
And still worse.
Unlike Trump and Cruz, Democrats in Congress had been paying attention to science and scientists and understood that the coronavirus pandemic would continue to infect and kill a staggering number of Americans and continue to economically devastate tens of millions of families through no fault of their own. On May 15th, the Democratic House passed a second $2 trillion Covid-relief package to help them through the months ahead.
But Senate Republicans and the Trump White House refused to act.
The growing economic disparities of the past four decades exploded in 2020 — the fault of nobody. Except Donald Trump and everyone who blindly followed his lead.
This includes every Republican in Congress.
Even as he gave his rambling farewell speech to a small gathering at Andrews Air Force Base, Trump felt the need to brag about the stock market’s record highs, omitting the fact that by far the vast majority of the benefit was going to those at the top.
Americans at the bottom end have not fared so well. Especially black and brown ones. If one suspected that the death rates from Covid-19 might reflect this country’s profound economic and health disparities by race and ethnicity, one would be correct.
Black Americans continue to die of Covid at about twice the rate of white Americans. Native Americans and Latinos are also dying at highly disproportionate rates compared to whites. That said, as of this writing, just more than 200,000 white Americans have died of Covid. The United States has four percent of the world’s population and, approximately, 20 percent of its coronavirus fatalities.
France, Germany, Denmark, Britain, and other developed countries decided to take over the payrolls of struggling companies, paying workers to stay home in order to slow the spread of the virus while averting the kind of economic uncertainty and hardship so many Americans have experienced. While other developed nations made sure to carry their citizens throughout this once-in-a-century calamity, food insecurity has tripled in the United States.
But then again, there’s the S&P 500.
Only after it had become clear that control of the U.S. Senate would depend on the outcome of the Georgia runoffs, Republicans finally saw the wisdom of a relief package to help Americans struggling to feed their families and keep a roof over their heads. Not too generous, though. While many professed to believe that the election had been stolen, the non-crazy ones knew that Biden would be the next president. Let’s not get carried away with helping people. Just enough to win the two Georgia seats. Yeah! That’s a good plan!
The repair that is long overdue:
Tax fairness, investment in human capital and infrastructure, reforms in labor law and in our electoral process, childcare, racial justice, and a return of some sense of respect and fair play. (See Merrick Garland and Amy Coney Barrett.)
And, oh, yes, tackling Covid with the urgency, resources, and professionalism we should have been applying all along.
And … help. Help for folks, who through no fault of their own, have been devastated financially.
Better?
This will take — dare I say — money. $1.9 trillion is what President Biden is asking for. And it is what Treasury Secretary Janet Yellen, former chair of the Council of Economic Advisors and the Federal Reserve, believes is necessary to fight Covid, provide relief for the American people, and make the long-term investments that will help grow our economy. It’s kind of the thing Democrats have tended to do in the past 60 years or so.
That’s why, since 1962, GDP growth has been 75 percent higher under Democratic presidents than under Republican presidents — and business-investment growth 126 percent higher, and unemployment 17.5 percent lower. And average weekly earnings have been positive under Democratic presidents and negative under Republicans.
Nine-hundred thousand Americans applied for unemployment benefits last month. What Biden and Yellen are proposing seems to be a much saner use of $1.9 trillion than tax cuts for those at the top that came during a three-year-plus run of job growth inherited from Obama.
Elections have consequences. Biden was elected president. And Democrats control both houses of Congress. Barely. And Mitch McConnell will almost certainly still have the filibuster. And during the Obama administration, he used the filibuster more than it had been used previously in the entire history of the country.
I don’t want to say Mitch is cynical, but the final sticking point of the latest Covid-relief bill was the size of Elaine Chao’s tax cut. That’s how bad it is!
Admittedly, Mitch’s actions on behalf of his caucus and all fiscally responsible Americans will be based on principle. The principle that lower marginal tax rates on the wealthy more than pay for themselves and create prosperity for working folks and the poor. It’s worked for 60 years! Why stop now?
Al Franken represented Minnesota in the U.S. Senate from 2009-18. He hosts ‘The Al Franken Podcast’ available wherever you get your podcasts.
"again" - Google News
February 05, 2021 at 08:02PM
https://ift.tt/2MSuUMV
Surprise! Surprise! Republicans Care About Deficits Again! - Rolling Stone
"again" - Google News
https://ift.tt/2YsuQr6
https://ift.tt/2KUD1V2
Bagikan Berita Ini
0 Response to "Surprise! Surprise! Republicans Care About Deficits Again! - Rolling Stone"
Post a Comment