Fresh in the inbox, a Congressional newsletter from Montana's junior Congressman Dennis Rehberg:Congressman Denny Rehberg
HAS A SOLUTION TO OUR DEBT PROBLEM:
STOP SPENDING AND BALANCE THE BUDGET! Already, Cappy McShout, let's see your solution:Congress can decrease the deficit and decrease the debt by:
* Freezing non-defense discretionary spending
* Reforming "entitlement" spending
* Increasing tax incentives for small businesses
* Lowering taxes for hard-working Americans Low-hanging fruit first: Items 3 and 4 will increase the deficit, not reduce it. Cutting taxes means slashing revenue. Budget deficits by definition amount to expenditures minus revenues. If revenues get smaller, deficits go up.
Obviously, some practitioners of voodoo economics will argue that resulting improvements in economic growth will make up for any loss of revenue, but the math here is quite fuzzy and, at the tax rates currently levied in the United States, almost certainly inaccurate. There are policy arguments for cutting taxes and accepting the deficits, but we're almost certainly on the wrong stretch of the Laffer curve to have tax cuts actually increase revenue.
But let's look at the other two proposals, starting with the discretionary non-defense spending freeze. First, this is an Obama proposal. Second, in terms of the budget, it's virtually meaningless. Check out this interactive budget graphic from The New York Times. Look at the overall budget, then click on the "Hide Mandatory Spending" button. Now, pretend that the National Security and Veterans Benefits (I'm presuming Rehberg isn't advocating freezing spending on Veterans). Look at what a small share of the budget is left. Now remember that we're not slashing this, we're freezing its growth.
So, not really a big deal.
What's the last proposal? Entitlement reform.
Where to begin with this one? Entitlement reform is GOPese for "cutting Medicare and Social Security," often through privatization. Depending on the particular privatization scheme with Social Security, there's a good chance that Rehberg's proposal would actually increase costs.
But let's just keep in mind that any savings on the Social Security front are likely to be minimal. The real driver of costs within the long-term budget is Medicare (which is one of the big reasons I favor health care reform). Rep. Paul Ryan, the House Republicans' point person on the budget, solves this problem by voucherizing Medicare and freezing its spending, a proposal that has the virtue of balancing the budget solely through spending cuts. Of course, Rehberg has also played politics by pretending to oppose any reduction in Medicare services. Instead, he'll just destroy the program in wholesale fashion.
One last point, despite Paul Ryan's ability to balance the budget solely with spending cuts, it is worth knowing that he had to instruct the CBO to assume no revenue reductions, which means no tax cuts.
In short, Montana's Congressman is pushing fiscal snakeoil. No surprise there. As Tyler Gernant put it a few weeks ago: While Rehberg claims that fiscal responsibility is at the core of his being, Gernant said he voted for "a massive tax cut for the wealthy that completely eliminates our budget surplus and returns us to deficits."
Gernant said Rehberg voted to put two wars on the country's credit cards and voted for a pharmaceutical drug plan that lets the big drug companies charge the U.S. government whatever they want. Rehberg doesn't give a shit about the deficit. He's either an idiot or a liar on this stuff. What he really wants is to destroy government, except when he can have a press conference to take credit for it.
Sadly, politicians rarely explain the federal budget to constituents. Neither, really, does anyone else. That means we're left with misleading crap like this being peddled instead.
Happy Valentine's Day! |
