Just split the difference already.
Republicans and Democrats on Capitol Hill are playing this game of semantics over what constitutes a real “revenue increase,” with President Barack Obama wanting to raise tax rates on the rich and Republicans under Speaker of the House John Boehner insisting that closing loopholes and limiting deductions are the only way to go. What’s the difference? At the end of the day, either means more money in Uncle Sam’s pocket and less in someone else’s.
Obama-led Democrats want to get to $1.6 trillion in revenue increases over the next 10 years, Boehner-led Republicans to $800 billion. The White House would raise tax rates on the top two income brackets - returning them to Clinton-era rates of 36 and 39.6 percent, respectively, from 33 and 35.
There’s room for both sides to give a little here. Agree on $1.2 trillion in revenue increases, raise the top two marginal rates to 34.5 and 37.3 percent, shave deductions, play with capital gains - which were 28 percent under Ronald Reagan, 15 percent now - halve the payroll tax break Americans have enjoyed the last couple of years (at the expense of Social Security and Medicare), get rid of such sops to the wealthy and the financial services industry as the “carried interest” provision that allowed Mitt Romney to pay a smaller percentage of his pay in taxes than tens of millions of other, less-privileged Americans. To a large degree, income is income.
Beyond that, Republicans are correct that the federal government has less of a taxing problem than a spending problem, with expenditures - and borrowing, of course - up dramatically since 2008. Those who keep invoking the term “austerity budget” to raise fears about repeating some of the mistakes Europe has made need to get a clue, as the small percentages of the budget and GDP we’re talking about here do not resemble “austerity” in the least. By and large these are not real “cuts” but merely applying the brakes to the growth of various programs.
Democrats need to put entitlements on the table. That’s what’s driving the debt. If they refuse, the nation’s budget meltdown and related economic woes are not reversible. Means testing and raising the age for eligibility, as Republicans have proposed in this go-round, are the least of what needs to be done with Medicare and Social Security (though one will grant Democrats the point that the latter is not contributing to the deficits at present, but will someday), with Medicaid requiring adjustments, too.
Republicans must put defense on the table. What we spend on the military now is overkill. Why must we have the capability of blowing the world up five times over if once is enough?
At this point taming the deficits is the stimulus the nation’s economy needs. Alas, Obama is now insisting on another stimulus package that includes more money for the forever unemployed, infrastructure investments, etc. Giving employers stability and predictability by putting the nation back on a sustainable financial path is its own reward, in the long run. At some point soon Congress also needs to talk about lowering the corporate tax rate, which is the highest in the developed world and puts U.S. businesses at a disadvantage while discouraging the right - meaning constructive for America - behaviors. In case no one has noticed, it hasn’t done American workers any favors, either.
Page 2 of 2 - In truth the two sides are not that far apart in their deficit reduction goals - $4 trillion over a decade for the Dems, $4.6 trillion for the GOP - certainly not enough to kill a deal.
Meantime, Republicans should tell Grover Norquist and his no-tax pledge to take a hike, even at the risk of a future primary challenge. Norquist runs Americans for Tax Reform, which is a misnomer because he’s not interested in reform but virtually no taxes at all. For someone who’s never been elected to anything, he has been permitted far too much influence, forfeited to him by weak-kneed others. It is refreshing to hear the likes of Sen. Lindsey Graham, Republican of South Carolina, say that “I will violate the pledge, long story short, for the good of the country. ....”
Look, it’s time to get serious about governing. Stop the bickering, get through this month, avert the fiscal cliff, deal with the long-term issues, including entitlements and the tax code, in the coming year. This is not a one-and-done deal.
Ultimately Erskine Bowles - he of the Simpson-Bowles deficit reduction plan and a former White House chief of staff - is correct that “it will be necessary for both sides to move beyond their opening positions.” The inescapable reality is that neither party’s leaders can do this by themselves. Republicans control the House, Democrats the Senate, and no proposal is going anywhere unless it passes both chambers.
Compromise, dammit, or just do America a favor and resign.
Journal Star of Peoria, Ill.