On deficit cutting, Rep. Gibson flirts with edge of GOP philosophy
These days, it’s a widely accepted mantra in the conservative movement that new taxes of any sort are out of the question, hardly worth even debating.
This conviction even trumps concerns over the deficit. Republican leaders have made it clear that they don’t feel a need to pay for tax cuts through program reductions.
During the Bush-Cheney era, it was explicit policy to cut taxes, despite a two-front war overseas and soaring deficits at home.
Speaking last week in Glens Falls, Rep. Chris Gibson — elected last November as part of the big national GOP wave — spoke passionately in support of the Bush-era tax cuts
But he also described as a success story another era of government in the late 90s, when a bipartisan budget plan briefly led to balanced budgets.
“The reason why it’s famous, is because the president at the time [George H.W. Bush] said ‘Read my lips, no new taxes.’ Politically it was the end for him,” Gibson acknowledged.
It was the end for Bush because he flip-flopped and raised taxes, partnering on a spending plan developed with the Democratic congress.
“[I]t is clear to me,” President Bush wrote at the time, “that both the size of the deficit problem and the need for a package that can be enacted require all of the following: entitlement and mandatory program reform, tax revenue increases, growth incentives, discretionary spending reductions, orderly reductions in defense expenditures, and budget process reform.”
In his talk last week, Gibson acknowledged only part of that formula.
“The agreement that came out of that actually curtailed spending to such a degree, and the Clinton Administration stayed on track with that, [that deficits were eliminated],” he argued.
But as we wrestle with a budget deficit estimated for next year at $1.5 trillion, it will be interesting to see whether Republicans — following the lead of the first President Bush — put tax hikes back on the table.
Such a move would be incredibly controversial, especially among tea party activists who helped to usher in Gibson’s new majority.
Indeed, by citing the first President Bush’s approach to deficit cutting, and praising the Bush-Clinton era of budget compromise, the congressman is already flirting with the outer edge of modern conservative orthodoxy.
To be clear, Gibson stopped well short of advocating for tax increases this time as part of the solution.
He argued that boosting employment — through tax cuts and deregulation — was the first task for Republicans, as a step toward balancing the budget.
But he also spoke again and again about the need for compromise with Democratic leaders in the Senate and the White House.
And he offered unambiguous support for entitlement programs such as Social Security and Medicaid. It’s worth noting that Gibson is also a man who has spent his entire career in government, serving as an officer in the US Army.
(He argued last week that the departments of Defense and Homeland Security should be targets for significant budget cuts.)
As we pick ourselves up from the recession, and turn to tackle the deficit, it will be interesting to see what kind of leadership Rep. Gibson brings, to the North Country and his party.
Brian,
I’m not so convinced about the “As we pick ourselves up from the recession,” part but do believe we do need to, “turn to tackle the deficit.”
I still maintain as I did before the recession, that economic realities due largely to the continuing march of automation and computerization will prevent the return to a need for an ever enlarging work force. Simply put, fewer people are needed to do what is needed.
If we just create jobs for the sake of creating jobs, we will be doomed to a growing deficit unless taxes rise to keep pace.
Of course there is another solution. We could follow what was done in China during Mao’s time. We could force all the unemployed to work on farms and displace the illegal aliens. Anyone interested?
Tax cuts boost employment and pay for themselves. G.W. Bush proved that.
Well it’s nice to at least hear a little lip service directed at two extremely wasteful and expensive depts. of our federal gov’t., Defense and Homeland Security. What is really disappointing, however, is that very few other Republicans or Tea party members (the other supposed anti-big gov’t crowd) dare to even acknowledge the elephant in the room. The same goes for many Democrats who depend on both for jobs in their districts. Until all elected officials acknowledge that these two depts. need substantial cutting, and offer suggestions, I take none of them seriously when they say they will tackle the deficit.
Who will be the brave congressperson that proposes to cut agricultural subsidies?
PNELba,
Probably the one who doesn’t get boatloads of campaign money from the giant agribusinesses. You raise a good point, however. When will the billions in annual subsidizes be addressed? When will the Ethanol scam be brought to an end?
Centrist republicans should be encouraged
For the decade ending in 2007, the unemployment rate averaged less than 5% and was only at 5.8% in 2008 when the @#%& hit the fan. That was a period of significant improvements in productivity as well. Companies simply redeployed their workforces without cutting back on the number of employees. If high unemployment levels persist, I believe that it is more likely to be a function of reduced demand, particularly for consumer goods, than a result of increased automation and computerization.
The general concept of tax cuts paying for themselves is meaningless in the abstract. There is probably an optimal level where the absolute amount of taxes are maximized, but if the general principle were true, you could reduce today’s tax levels, say, by 50% and generate more tax revenue. If you believe that, I want to talk to you about a bridge in Brooklyn. Unfortunately, the discussion is never about where that optimal level is and how to get there (read, tax reform). Rather, it is reduced to politicians telling the electorate what it wants to hear.
You’d think the Republicans could raise taxes to honor the sacred memory of St. Ronnie. Reagan raised taxes in seven of his eight years in office, including four times in just two years. Former GOP Senator Alan Simpson told NPR, “Ronald Reagan raised taxes 11 times in his administration — I was there.”
Of course, his spending was so over the top, that he managed to triple the deficit anyway– the deficit increased to nearly $3 trillion on his watch, almost three times as much as accrued in the first 80 years of the century combined.
Source: http://thinkprogress.org/2011/02/05/reagan-centennial/
If you reduce taxes to zero the increase in jobs will become infinite, right?
If we increase taxes to 100% will jobs increase? Comon’ you all are smarter than that. Spending is the issue, right up there with a lack of revenue. And lets be honest here- yes, Reagan increased taxes and spending. Why? Because the moron that preceded him gutted the military and tried appeasing our enemies. You guys do remember the USSR, right? He rebuilt the military and used spending as the tool to defeat the Soviet Union, and it worked. Was he perfect? Nope, not by a long shot. But he had a crisis and considered the expense justified. And the economy DID grow. Maybe not like Rush likes to think, but it did grow from the day he took office through the 90’s. Defense spending and investment and the results of that spending worked to drive the tech bubble. I don’t agree it works every time, but it did that time.
So where does that leave us today? Today our crisis is employment, healthcare and the deficit/national debt. What will continued gov’t spending in defense, healthcare, the arts, entitlements provide in return? What will additional taxation provide in return? With significantly higher taxation across the board we can maintain the status quo, that’s about it. Without real cuts in spending we aren’t going to be able to spend our way out of this, sorry Keynesians, it won’t work. So despite my wishes, I recognize that taxes will go up. I think they’re going to go way up myself and I think it’ll be the final straw myself, I think that will be the killing blow- unless they reduce spending a bunch.
Where to cut? Gee, I’m in favor of cutting everything but the pension I worked for. Brians probably in favor of cutting everything but the CPB/NPR, and someone else will be in favor of simply firing our entire military. The cynical pragmatist in me says most likely our fearless and brilliant leaders will cut things according to who is filling their pockets the most. For darn sure The Beloved King Obama isn’t going to do anything to harm GE, Goldman-Sachs, SEIU or Hollywood. Cuomo won’t touch NYC till the last moment. The rest will fight for their little rice bowls too.
Good luck America, you’re toast.
The Reagan tax reduction and successive increases by him, Bush and Clinton are validation of the concept of trying to find the optimal tax rates (the rate at which the most tax revenue is generated). The reduction from 70% was well advised but the depth of the cut was excessive. As a result, all three of them attempted to raise rates in the search of the range that would yield the most tax revenue. Arguably, by the time Clinton left office, we were in that sweet spot. G. W. Bush reversed that with no demonstrable benefit to tax revenues (or employment).
Reagan clearly did some very good things but he also left the country with a huge deficit (his self-proclaimed biggest regret and its interesting to note that he presided over an economy that had a 10.3% unemployment rate). And although he increased defense spending by 1/3, the baseline he was working from (Carter’s defense budget) wasn’t terribly different from the later Nixon and the Ford administration numbers (Nixon’s earlier defense budgets were impacted by the end of the Vietnam War). There is a school of thought that would argue that the 100’s of billions of dollars that Reagan spent on defense was wasted since the Soviets were in a lot worse shape than anyone realized and would have imploded in any event. As self-centered as we are, we would like to point to Reagan and the U.S. but a more sober view would place a lot more credit at the feet of the Afghanis, Solidarity, and the Pope.
Bret4207 says:
“Gee, I’m in favor of cutting everything but the pension I worked for.”
Even your wife’s teaching job?
Scratchy, nope, nor anyones elses. Just trying to show how we all guard our rice bowls. I’m torn on parts of this discussion. It seems fundamentally wrong to me to pull the rug out from under a retiree, be they State, Federal, private or someone on Social Security. But at the same time we have to be realistic about things. I have no expectation that I will get any Social Security at all. That money that was forced from me could have been invested or even stuck in a savings account and I would have had something. Instead, FDR’s gigantic Ponzi scheme will simply count me as one of it’s victims. The same thing will happen for a lot of other people too of course.
So where do we cut and who gets skunked? Defense, transportation, arts, entitlements… who do we trash first? MAybe we should just renege on all our debt and see what happens?
I’m still waiting with bated breath to learn exactly what the current Republican leadership will propose for spending cuts that will actually close the 1.5 trillion deficit. I’m slightly heartened by Brian’s report that Representative Gibson, a retired military officer, favors cuts to both the Defense Department and to the Dept. of Homeland Security. Nevertheless, it will take far more cuts than the mythical 100 billion Republicans say they will take out of “discretionary spending”. That 100 billion is only one-fifteenth of the total estimated deficit. First, I say we have no choice but to go back to the tax rates before the Bush tax cuts. Remember, those rates were good enough for Ronald Reagan. This would bring in 400 billion more each year. Second, I am sure there is at least 100 billion in defense spending cuts – both as the war in Iraq winds down and by killing new weapon systems that have no use in the current threat environment. Third, between discretionary spending and Homeland Security there is surely another 100 billion in cuts. Finally, I may be putting a target on my back by saying so, but the IRS needs to be reinvigorated. I have heard a credible estimate that there is 300 billion in taxes not collected because of an inability to do sufficient audits. I believe I pay every dollar that I legitimately owe in taxes, and I have not participated in any elaborate tax sheltering schemes. I am therefore particularly upset that many individuals earning much more that I earn, do not pay their fair share. So 400 billion plus 100 billion plus 100 billion plus 300 billion is 900 billion or 3/5 ths toward balancing the budget. Anyone out there have a better plan?
The Bowles Simpson deficit commission recommended an outline of where the cuts should be made and taxes rationalized. They seemed to me to be reasonable. They would also preserve SS, the program that is by far the easiest to fix, for many decades to come. There are also a number of competing plans that tackle the hard choices (SS, Med, and defense, as well as a relatively modest tax on gasoline). The problem is that our elected officials treat them as if they are radioactive. It’s not difficult to understand the depth of cynicism, especially since the way forward is pretty obvious.
potentially we could get every congressperson and senator to toss in one thing from their district/state that they are really fond of. As it is, they talk about reducing something from somebody else’s district or something that their base doesnt like (but the other guy’s base does like).
‘Twas written: ” And lets be honest here- yes, Reagan increased taxes and spending. Why? Because the moron that preceded him gutted the military…”
Um, no.
“Over the entire course of Carter’s presidency, spending for national defense increased from 4.7 percent GDP to 5.2 percent GDP.”
Couple of caveats here (increase came in last three years of presidency, after post-Vietnam cutbacks), but here’s link: http://colorado.mediamatters.org/items/200701240002
Jimmy Carter is still the focus of evil in the modern world, though, and deserves to burn in hell. On that we can all agree.