Sunday, June 5, 2011

The deficit debate isn't really about the deficit

Once upon a time, we all believed that the Republican solution to every problem was to cut taxes. Then, Paul Ryan emerged from wilderness of Wisconsin, the Republican decided Obama was bankrupting the country, and everyone else decided the deficit was the issue du jour.

Or so you thought.

Check out the CBPP's analysis of the Ryan plan: $4.5 trillion in spending cuts, $4.2 trillion in tax cuts. $400 billion in deficit reduction. However, even the plan's asterisk-ridden original numbers appear to have spent more money cutting taxes than reducing the deficit. So what do these sums reveal?
  • That Republicans aren't actually very worried about the deficit. After all, if they were, they could cut dramatically more of it, for dramatically less of a political cost.
  • That the Ryan budget is chiefly about spending priorities.
  • Following from that, the Republicans prioritize tax cuts above all else, including deficit reduction.
  • That the Ryan Plan -- cutting 4 trillion from social welfare (money given disproportionately to lower-income Americans), and cutting taxes by an almost-equivalent 4 trillion (money disproportionately taken from higher-income Americans) -- is in actuality a stealth income redistribution program. Except it's taking from the poor and giving to the rich.
All together, these numbers paint a picture of a party willing to puts its political health on the line in order to roll back protections for the poor and elderly to make space for tax cuts. Not deficit reduction, tax cuts.

I will admit there's a certain genius to the way this approach smuggles the same old Republican agenda into the current political debate.

Most Americans are, by now, intensely wary of Republicans bearing tax cuts. After all, they got that with Bush, and look how he turned out. Republicans today are constantly fighting the well-deserved stereotype of being The Party of the Rich and Well-To-Do. Centering their entire policy agenda around tax cuts would only play into the worst fears of most voters.

But most Americans are scared senseless of the deficit, even if they don't understand what that means or how it works. So Paul Ryan wrote up a plan which cuts trillions of social spending and funnels most of it into tax cuts, and then used the leftovers to reduce the deficit. And he called it a deficit reduction plan. It's best not to think of that last bit as true deficit reduction, though. It's a political bribe, paid so that Ryan can skim off a little bit of the deficit reduction mojo, buying credibility with deficit-obsessed Beltway pundits and low-information middle-class voters. It mostly worked, too.

"That's nice, but the Ryan plan was months ago!" you might say. "You already blogged about it many, many times! Why are you bringing this up now?"

Because it's still happening, in the form of the debt ceiling negotiations. In fact, it happens every time anybody proposes a plan for dealing with the deficit that doesn't start with letting all the Bush tax cuts expire.

The Bush tax cuts basically functioned like the second part of the Ryan plan, taken alone: massive tax cuts. Now, largely because of those tax cuts, tax revenues are in the toilet, and there's a medium-term deficit crisis. And so it seems that we're going to have a national deficit debate.

But the current debate shouldn't really about how to solve the deficit any more than Ryan's plan is about how to solve the deficit. Just like the Ryan plan, the current debate should be about spending priorities. Specifically, whether to preserve George W. Bush's tax cut priorities by cutting social spending, or whether to return to Clinton-era spending priorities by letting the Bush tax cuts expire.

That's a debate I'm willing to have; it's a debate I'm confident that Democrats and liberals would win, handily. I suspect a lot of the policymakers in Washington understand that this is the debate that we are having, with code words and hidden motives. But most Americans, and worse still, most of the supposedly-informed political press, seem to view the deficit not as a limitation of our own making but an inevitability: an inexorable catastrophe looming in the near-term future, something we must confront with "hard choices" no matter which path we take. It's simply not. And that's a misconception that progressives need to correct as soon as possible. We need to recenter the debate, focusing on what's really at stake. Because as long as the conventional wisdom is that the country is running out of money, and that the argument in DC is about different ways to stop that from happening, Americans are going to continue to be hoodwinked into voting for politicians bent on raiding the pockets of the poor and middle class.

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