Why the 10-1 tax “deal” is no deal

With fiscal calamity looming, Democrats keep emphasizing the failure of Republicans to allow “give and take.” On ABC’s This Week, Jake Tapper pointed out that in the super-comittee that was appointed to work out a budget solution, Democrats offered a deal: $10 of spending cuts for every $1 of increased revenue. This sounds like a reasonable offer and makes Republicans look like uncompromising ideologues for rejecting it.

But this is no “deal” at all. It’s a smoke and mirrors plan that significantly favors the Democrats’ long-term goals, but Republicans themselves have failed to explain why.

What we are supposed to believe is that “revenue” is the opposite of “cuts,” so Democrats have offered 1 unit of what they want for 10 units of what Republicans want—apples to apples. But the devil is in the details. While the cuts would occur for one budget year, and would be easily changed thereafter, a revenue increase is a long-term adjustment that is very difficult to roll back. It’s apples and oranges.

Furthermore, unless they plan to empty the pockets of every millionaire in America, the proposed cuts would hardly put a dent in the deficit. To eliminate the deficit (not even touching the debt), the Federal Government would have to cut $3 trillion dollars. 10 percent of that is $300 billion—a price tag that cannot be paid simply by taxing the rich.

In other words, the Democrats offered Republicans the opportunity to permanently raise taxes in exchange for temporary cuts that amount to a drop in the bucket of our mounting debt problem.

That’s like telling a college student that you will give her a 10% discount on textbooks this semester for a 1% increase in her tuition for the next four years. It’s not a fair deal, and Republicans need to make this point clear when challenged.

2 Comments

  1. This is a very good point that you make here. Yes, cuts are more short term than long term and can be changed easily. But what if there was a provision in the Constitution for the cuts to be permanent? And to have a balanced budget? I just blogged about this, please see what you think of my post.

    1. Yes, a constitutionally mandated cut would be an altogether different deal. Of course, Democrats wouldn’t go for that. And I’m not so certain that an Amendment is necessary. If so, it would need to allow sufficient headroom for flexibility during a crisis situation.

      Thanks for the comment.

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