Here’s one bottom line on all the foolishness about perpetuating the worst-conceived tax cuts in U.S. history: the transfer of $500 billion more in American wealth to the Chinese.
Not to pick on the Chinese, much. Their response to the awarding of the Nobel Peace Prize to imprisoned dissident Liu Xiaobo – creation of an alternative Confucius Peace Prize – was a sad farce.
But perhaps no more farcical then watching Friday’s “Today Show” interview of Rep. Michele Bachmann, R-Minn., a tea party superstar.
In response to repeated questions from Meredith Vieira regarding the impact extending the tax cuts will have on the deficit, Bachmann responded, “When people keep their own money, that is considered a deficit to government, but it’s not a deficit to your pocket or mine.”
Perfectly true, and utterly magical.
There may be a consensus that allowing taxes to rise next year would undermine what is already an anemic recovery. Elements to the compromise worked out by President Barack Obama and Senate Minority Leader Mitch McConnell, R-Ky., should foster more hiring, although the 2 million-job projection the president has been talking about sounds awfully optimistic.
But the dynamics that got the federal government to this place are all too familiar, and destructive: The Republicans refuse to raise taxes, the Democrats refuse to cut spending, so they compromise. Both get their way, and the deficit increases still more – but not to your pocket or mine.
The near success of the president’s National Commission on Fiscal Responsibility and Reform underscores how near the nation might be to a better path while our leaders stumble down the same old road.
The panel’s recommendations would cut the federal deficit by $4 trillion through 2020, flatten tax rates, cap or cut almost all spending, and reduce the national debt as a percentage of gross domestic product to 60 percent by 2023 and 40 percent by 2035.
The proposals won 11 of the 14 votes needed to bring the package to a congressional vote. Liberal Sen. Dick Durbin, D-Ill., supported it, as did conservative Sen. Mike Crapo, R-Idaho. Even ultra-conservative Sen. James Inhofe, R-Okla., accepted taxes as a necessary element of more responsible budgeting.
Partially as a response to a preliminary version of the report, Obama is attempting to freeze executive branch salaries. The Senate has not yet voted on the proposal.
He is also reportedly considering income tax revisions along the lines recommended by the commission.
Meanwhile, however, the horse-trading and hypocrisy continues in the Capitol. House Republicans swore off earmarking but elected an egregious practitioner chairman of the Appropriations Committee. And Democratic senators from the “conservative” heartland announced their support for the tax compromise only after they got an extension of the ethanol production credit included.
With control of Congress about to split, the parties are playing for time, and the next opportunity to impose their will. Nothing on the agenda today addresses the nation’s fundamental budget and deficit challenges. Businesses are not getting the certainty leaders say they need to begin investing their record hoards of cash.
A sad farce all around.