I’ve been skeptical of the Tea Partyers’ commitment to entitlement reform and meaningful debt reduction. Sarah Palin, after all, pioneered death panel demagoguery in response to the mere possibility of rationalized Medicare spending. The notion that eliminating earmarks—a Tea Party whipping boy–will have any effect on the budget deficit is fantastical, since earmarks constitute a mere $16 billion in federal spending.
So it will be revealing to see how Tea Party representatives react to the preliminary deficit reduction plan from the presidential commission. It would be refreshing if, instead of exclusively blasting the proposal’s relatively modest tax increases, such as raising the federal gas tax fifteen cents to pay for transportation projects (a legitimate user fee), they supported the proposal’s more audacious cuts, such as reducing the mortgage deduction. (The commission would eliminate the deduction only for mortgages over $500,000, alas.) The willingness to take on this middle class subsidy would be stronger proof of iconoclastic independence than pushing for repeal of 17th Amendment, a favorite piece of Tea Party arcana. Both would be an uphill battle; I’d rather see political capital expended on getting rid of a constitutionally-suspect government hand-out, especially given the contribution of the federal government’s obsession with increasing home ownership to the 2008 fiscal crisis.
Here are some other commission proposals that the Tea Partyers should meet and raise:
–$100 billion in defense spending cuts, including closing a third of overseas bases. I haven’t heard many Tea Partyers opine on whether the Founders, notoriously skittish about foreign involvement, would have supported our Iraq and Afghanistan wars, or whether they would have embraced the idea that the U.S. military has the mandate and ability to introduce constitutionally-restrained democracy into alien cultures. I would love to hear a Tea Party sympathizer challenge the conservative received wisdom that we aren’t spending enough on “homeland security.” Instead, many of the party’s icons, such as Scott Brown and of course la Palin, parrot the neocon bromides about the looming threat from “Islamofascism.” A conservative contender for the U.S. Senate seat from New York claimed unimaginatively that the federal government was stiffing New York City in homeland security funds—a standard chest-thumper of all New York politicians, Republican and Democrat alike. Why not call instead for eliminating the inefficiencies in the Department of Homeland Security and the redundancies among intelligence agencies and the Pentagon? Why not redirect the boondoggle of homeland security spending, with its gaggle of lobbyists and contractors, into domestic policing and prison maintenance? New York sends one thousand police officers on a cavalcade through the streets every day to show the terrorists who’s in control. A city that can afford such a squandering of police resources can’t be hurting that badly on anti-terror resources.
–Eliminating the employer deduction for employee health insurance and capping non-economic damages in medical tort liability. Tea Partyers have decried the terrible inefficiencies of employer health insurance deduction and called for tort reform. They should reiterate their support now.
–Simplifying the tax code; lowering the corporate income tax.
–Raising the social security retirement age. The commission’s proposal of raising it to 69 by 2075 has got to be a joke.
Creating support for cuts is more important at this moment than fending off any tax increases. Republicans historically have been able to cut taxes, they have been far less successful in cutting spending. The Tea Party will justify its claims to significance if it can create the political will to reduce entitlements and to challenge Republican sacred cows.
i think one issue is that it’s Tea Parties. the young libertarians associated with Freedom Works are OK with broad modifications to entitlements and cuts to military spending. but the older tea partiers, not so much.
Thanks for a good analysis.
What’s crippling America is perceived untouchable spending. Among individuals and households, the “Three H’s” housing, health care and higher education are what’s bankrupting Americans. All are sold on free markets, but their supply is restricted by non-market actions of the suppliers.
Federal budgets are similarly committed by political ideologies about defense and entitlements. That’s what happens when two generations of Congressman have spent their careers “compromising” by taxing those too young to vote.
Interesting post. I must admit that I was pleasantly surprised by the deficit reduction plan. I thought that a bunch of Obamaroids would just want to jack marginal tax rates up, but the plan is pretty rational.
My take:
There is no way I would cut defense spending. I personally was in favor of both the Afghanistan and Iraq wars, but even if you aren’t, I would hope we would agree that we should at least be capable of fighting wars like that. We should also be modernizing weapons in order to fight the next war, and paying our soldiers more. Never let your guard down.
Eliminating the tax deduction for medical care would be nice, but Obamacare has removed most of the reason why it was a good idea. If it had been done previously, we would all of the sudden have had a bunch of choices of different medical plans and policies. Now that they all have to cover everything anyway, it won’t matter much.
Simplifing the tax code: hell yeah
I’m against raising the retirement age too fast, simply because there are still a lot of physically demanding jobs that wear out the body. A college professor can work until he is 74. A construction worker can’t.
Eliminating the employer deduction for employee health insurance…
Huh? Why does this matter? Practically all employer expenses are deductible. It’s the reason net margin is radically lower than gross margin. Eliminating this is as nonsensical as eliminating the deduction for office supplies.
Heather, there’s much to agree with in your post, but, if I may focus on one possible area of disagreement: while phasing out the mortgage interest tax deduction may make some sense over time (to do it now would probably destroy what’s left of the housing market) it should be accompanied by a removal of *any* capital gains tax liability on the sale of a primary residence. The US is one of the few countries to subject homeowners to this penalty, a penalty made more egregious by the failure to index-link capital gains, and, I’d add, illogical by the failure to allow capital losses on the disposal of a home.
Then again, this failure is typical of the saver-hostile nature of the US tax regime, a trait that would be sharpened still further should a number of the commission’s other propsals (such as means-testing social security) come into force.
Heather. Dear woman, you are not a rightwinger, you are sane!
Derek,
Compensation is deductible to an employer, but hence not deductible to the employee. Healthcare is a special case, where not only can the employer deduct but the employee does not pay tax on compensation received.
I’m a founder member of liberals for Heather for sane fiscal policies
There is no way I would cut defense spending.
We have two serious defense priorities. The Atlantic and the Pacific. What happens between them is not our problem.
I personally was in favor of both the Afghanistan and Iraq wars, but even if you aren’t, I would hope we would agree that we should at least be capable of fighting wars like that.
Yeah, we always need to be able to use the military to foist democracy on cultures that are simply not ready or willing to acknowledge the most basic of civil liberties.
Heather’s drawn up a good list here, even if it is a bit over-snarky (yeah, I know, pot meet kettle).
One thing worth crediting the Tea Party for at this point is that cuts in entitlements are now being talked about. Whether we’ll actually do something before we hit the TINA point Derbyshire constantly flogs is another matter.
TINA: There is no alternative.
$100 billion in defense spending cuts, including closing a third of overseas bases.
Who is a “Tea Partier” is difficult to define as they’re not monolithic. Having said that, Glenn Beck (if there ever were a “Tea Party Leader” he is one) has called for at least a 5% cut in military spending.
Yeah, we always need to be able to use the military to foist democracy on cultures that are simply not ready or willing to acknowledge the most basic of civil liberties.
It’s not mostly about establishing democracy, it was about getting rid of Saddam and the Taliban. One can make a case that we have stayed in Iraq and Afghanistan for too long, but it is harder to make the case that we should have stood by as the sanctions regime against Iraq was falling and allowed Saddam to start rebuilding his chemical and nuclear programs. It is even harder to make the case that we should have twiddled our thumbs while Osama was laughing at us after 9/11. If terrorists had struck the Notre Dame instead of the World Trade Center, France wouldn’t have been able to do a thing about it. I don’t ever want the US to be in that position again.
We have two serious defense priorities. The Atlantic and the Pacific. What happens between them is not our problem.
That type of thinking was wrong in the 1930s, wrong during the Cold War, and wrong now.
Using 9/11 to justify defense spending is a non sequitur. Just because 9/11 happened doesn’t mean military might is the best way to prevent another one.
We spend far out of proportion to other countries on defense. When you build history’s largest hammer, everything starts to look like a nail. And even with that hammer terrorists still managed to hurt us. Maybe there are other ways of cracking that nut?
john, i think the main issue between someone like me and someone like you is that 1) you overestimate the military might of the terrorists, 2) you overestimate the threat of non-western arab regimes. i, for example, happen to believe that the IDF seems so awesome because they fight arabs. i do believe that france could take down terrorists, any powerful modern nation could do so. but that’s a difference of evaluating facts. if i assessed the world as you do, i too could support increased military spending. i do not though so evaluate.
It’s not mostly about establishing democracy, it was about getting rid of Saddam and the Taliban. One can make a case that we have stayed in Iraq and Afghanistan for too long, but it is harder to make the case that we should have stood by as the sanctions regime against Iraq was falling and allowed Saddam to start rebuilding his chemical and nuclear programs.
The actual routing of Saddam wasn’t that manpower or equipment intensive. It’s the occupation that draws on the need for large scale presence. By your own mission criteria you acknowledge that there is room for cutting.
It’s not mostly about establishing democracy, it was about getting rid of Saddam and the Taliban.
Really, so why are we still there? That is not how the war was either sold or practiced. The Taliban did deserve to be the receiving end of punitive expedition because of a direct attack on our soil from theirs, but there was no serious security rationale for invading Iraq. If you want to argue on humanitarian grounds, fine, but don’t try to sell me the idea that Iraq was a threat to the U.S.–or will be in the next few centuries or so.
[quote]That type of thinking was wrong in the 1930s, wrong during the Cold War, and wrong now.[/quote]
First, we have no enemies of the caliber of Japan, Germany or the Soviet Union, so it’s your thinking that’s out of date. Second, Japan, Germany and Russia were a threat to either the Atlantic or Pacific basin. Third, during the Cold War (1945-89), we never engaged in any serious combat outside the fringes of the Pacific or the Atlantic.
1) you overestimate the military might of the terrorists…
For example, the now-defunct INS could have and should have prevented 9/11. We don’t need an array of carriers, bomber wings and ICBMs for that.
When my economic situation has been in distress, I made severe cuts. Our Government must understand this and take action. I suspect that it will not.
The acid test for the Tea Party movement is to 1) repeal ObamaCare entirely and 2) take on the corrupt elements of the GOP to prevent the “business as usual” corruption that began around 1996 and to push for meaningful reductions in government spending. If the GOP is allowed to degenerate the way it did starting in 1996, its all over.
Look, don’t expect some miracle come January 2011. The GOP scored a huge win in the elections, but they were so far behind going in that it was pretty hard to lose. Right now they have a healthy majority in the House, but they are still the minority party in the Senate. They can block really bad ideas, but there isn’t much they can do to implement new ones. The only way they could even try would be to threaten another shut down, but that didn’t turn out so well last time. What we’ll see for the next two years is stasis, with a bit of nibbling on the edges. For now, they seem to be getting something done on earmarks. Yes, it’s a small, small part of the budget, but you have to start somewhere.
I agree with the author that the tea party is unlikely to achieve meaningful reductions in government spending. I think the growth of government and government spending will increase until the debt reaches around 120% of GDP, which will be around 2020. At that time, the government will start to sell assets (the feds own like 85% of Arizona and Nevada, for example) at around $500 billion or so per year in controlled auctions. This is also the time that the military and interventionist foreign policy will start to be curtailed. The Navy will be maintained, to keep the oceans free for shipping and trade, but land interventions will decrease.
Russia will likely break apart around 2030 and China will begin a Japan-like stagnation around this time as well. The Muslim Middle-east will be into its Iran-like demographic transition by this time, meaning that Islamic terrorism will have run its course by then.
The upshot to all of this is that the U.S. will have no external enemies or perceived external enemies by the time the final default of the federal government occurs. I expect this to occur between 2030-2040 and will result in the end of the federal government as we know it today.
The reason why I do not expect the tea party to do anything is because I do not believe there is a political solution to this problem.
The fact that earmarks are relatively immaterial from the perspective of balancing the budget does not mean that they aren’t important for another perspective, namely government corruption. When I read Boehner’s Op-Ed a week or so ago about banning earmarks as a budgetary protest measure, I thought that all the points he made were good ones, but they all related to corruption, not to balancing the budget. From that perspective, eliminating or reducing earmarks is important, and not merely as a symbolic gesture: federal politicians should not be buying off each other’s support with taxpayer cash. Maybe that’s naive or idealistic, but I do believe there would be strong support for fighting earmarks insofar as that would involve focusing on eliminating political corruption. It is true that in order to balance the budget and reduce the deficit (ha), military and entitlement cuts would be necessary. Nevertheless, Boehner’s campaign to end earmarks is a worthwhile one. But it relates to government corruption, not balancing the budget.
Good point, Dregs. Thx.
Heather takes a slam against Palin in the beginning and then reiterates all the policy positions that Palin has already championed. Talk about irony! For a blog which proclaims “reason” on its masthead, you do seem to be moved by more often by sub-rational impulses.