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Thu Feb 21, 2013, 09:36 AM

The federal budget is going to increase, whether Republicans like it or not.


The GOP's Budget Denialism
The federal budget is going to increase, whether Republicans like it or not.



But the real debate is what it has always been—less about the cuts themselves, more about how to replace them. Democrats say they want a deficit reduction package that brings in new revenue, ideally by closing tax loopholes that benefit the wealthy. Republicans will hear nothing of it. The last fiscal agreement, the one the parties reached in January, raised taxes on higher incomes and will generate about $600 billion in new revenue over the next decade. Republicans were not happy about that and, having agreed to that increase, they’re not about to embrace another one. “The president got his tax increases last year,” House Budget Chairman Paul Ryan said while appearing on ABC News Sunday.

Actually, the January deal produced less than half of the revenue Obama was seeking when negotiations began. And he had good reason to seek more. Take a closer look at the annual projections that the Congressional Budget Office released earlier this month. According to those projections, tax revenue this year was equal to about 15.8 percent of Gross Domestic Product, or GDP. Thanks to the January agreement, taxes will quickly rise, relative to economic output: By 2023, according to the CBO, revenue will be at 19.1 percent, the highest it’s been since the 1990s. But, even then, receipts will still be lower than they were during their Clinton-era peak. In 2000, tax receipts were actually 20.6 percent of revenue. (See graph.)

Source: Congressional Budget Office

Revenue as a percentage of Gross Domestic Product, through 2023

Raising taxes yet again would obviously push revenues even higher, maybe even high enough to match or exceed that Clinton-era peak. That shouldn’t bother anybody. In fact, attempting to maintain revenue at current levels, as the Republicans are basically insisting, makes no sense whatsoever. Today we ask government to do a lot more than we asked it to do thirty or forty years ago, mostly because we’ve asked it assume responsibility for health care—a necessary, but expensive job, particularly when it comes to health care for the elderly. That spending is growing faster than we’d like and we’re in the middle of a multi-year debate over how to reduce that spending. But, under almost any realistic scenario that preserves a reasonable commitment to seniors’ health care, we’re going to need more money to finance government services.1

The alternative would be to gut everything else. But the sequestration cuts show how counter-productive that approach is. Cuts to education programs reduce future productivity. Cuts to regulatory agencies put our society at risk of health and safety hazards. Cuts to defense—well, I could live with some of those, just as many conservatives could live with cuts to the spending programs. Every part of the budget has some waste, which means there’s room to cut a little more. But a lot more? Enough to bring expenditures in line with current revenue projections? “Discretionary spending,” the money that government spends on everything besides entitlements, is already at historic lows. Further reductions would push it lower. It’s hard to see how government could function in a way most Americans would find acceptable. Conservatives insist that higher taxes will strangle the economy, a claim that the evidence (from Europe, among other places) doesn’t support. But if we don’t find the money to pay for infrastructure and training tomorrow’s workforce, then we really might be undermining the future.

No, Americans aren’t enthusiastic about new taxes. The reason we have deficits—well, one reason—is that voters like government services but don’t want to pay for them. The fiscal debate we’re having today is over how to reconcile these conflicting imperatives. But one side, Obama and the Democrats, would seek a middle ground, with modest revenue increases and spending cuts.2 The other side, the Republicans, insists revenues cannot go up at all. If we asked no more of government than we did in the 1960s, that would be fine. But we ask the government to do a lot more. That means we need to pay more, too.

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Reply The federal budget is going to increase, whether Republicans like it or not. (Original post)
babylonsister Feb 2013 OP
AndyA Feb 2013 #1

Response to babylonsister (Original post)

Thu Feb 21, 2013, 09:48 AM

1. Closing tax loopholes is a no brainer.

Subsidies for oil companies that make billions in profits every quarter is insanity, especially when the other option is to cut earned benefits that millions of Americans depend on to live.

As always, the Republicans want to focus on protecting America's wealthiest families, and by doing so, expect everyone else to suffer so the top income earners can keep more of their money. Why would wealthy people pay less in taxes than the middle class? It makes no sense at all, yet that's sacred ground that must not be disturbed.

The Republicans are responsible for most of the debt, and they weren't concerned about the deficit when they were starting wars, cutting taxes that disproportionately favored the wealthy, passing a pharma bill that kept prescription drug costs high, and not passing legislation that would create jobs and increase the tax base.

It's time the Democrats called out the GOP for the hypocrites they are. Run ads with Cheney stating that "deficits don't matter." Feature Republicans who voted for all these things, and ask them to explain why NOW--SUDDENLY--they are so concerned about the deficit, yet couldn't care less when they were voting to run it up. Ask them to explain to the American people where they expected the money to come from to pay for all their bills charged to the country's credit card.

The facts prove that the responsibility for most of this mess lies at the feet of the GOP.

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