Fiscal Policy: Why 'Stupid' Fits
Hurricane Rita heads inexorably westward, threatening to add to the human and financial costs of Hurricane Katrina. And when it comes to taxes and spending, Washington acts as if nothing is happening.
True, a group of very conservative Republicans issued a list of program cuts on Wednesday under the imposing name "Operation Offset." The cuts that the Republican Study Committee proposed have won their sponsors praise for making "tough choices." Of course the sponsors won't actually have to live with these cuts, because Republican leaders dismissed most of the reductions, especially in congressional pet projects and the Medicare prescription drug benefit.
And it's hard to give the fiscal conservatives too much credit, since they would cut $80 billion from Medicare and $50 billion from Medicaid over five years and suggest reductions in school lunches, rent subsidies for the poor and foreign aid, among other things. The idea seems to be that to help Katrina's poor and suffering victims, other poor and suffering people will have to sacrifice.
Nonetheless, permit me to offer a little cheap grace on these conservatives. At least the Operation Offset crowd has produced this list of cuts and forced its own leaders to disown them. The exchange showed how fundamentally stupid our budget policies have been over the past five years -- and, yes, I'll defend that strong word.
Here's a fact getting far too little attention: The cost this year alone of the Bush tax cuts enacted in 2001 and 2003 comes to $225 billion. In other words, the revenue lost because of tax cuts going through this year without any congressional action would more than pay the costs of Katrina recovery.
Why describe our government's fiscal policies as "stupid," rather than, say, "ill-advised" or "misguided"? The softer words of conventional opinion writing imply disagreement but suggest an honest coherence in the other side's view. Hey, we all disagree on stuff, right?
But our current budget policies are built not on honest coherence but on incoherence or, even worse, a dishonest coherence. The president and members of Congress always insist that they are fiscal conservatives who believe in balanced budgets. Yet their actions bear no relationship to their words, and labels such as "conservative" have no connection to their policies. Our federal purse strings are in the hands of fiscal radicals.
I'd have much more respect for these guys if they just came out and said: "Look, we love deficit spending. That's why we waged wars in Iraq and Afghanistan and cut taxes at the same time. It's why we'll talk about offsets for Katrina and Rita but never enact them, except maybe a few cuts in programs for the poor. All we really care about are passing tax cuts -- and popular spending programs that get us reelected so we can enact more tax cuts."
Not very politic, I'll grant you, but honest. Vice President Cheney came as close as anyone to this form of honesty when he spoke in support of the tax cuts on dividends shortly after the 2002 elections. His words, alas, came at a closed meeting. According to Ron Suskind's book "The Price of Loyalty," Cheney referred to the former president in insisting to his administration colleagues that "Reagan proved deficits don't matter" and that Republicans owed themselves more tax cuts. "We won the midterms," Cheney said. "This is our due."
All hail the former Halliburton CEO for being candid enough to put the accent on power and privilege, not on policy and those oh-so-boring fiscal concerns. I guess balanced budgets aren't for "big-picture guys."
Which brings us back to that word "stupid." My dictionary tells me it means not only "lacking in ordinary intelligence" but also "dazed" and "stupefied." The crowd running our government is dazed and stupefied by a theory that sees throwing ever-larger sums to the wealthy in the form of tax cuts as so good, right and important that all the ordinary rules of finance and economics can be thrown out the window. If it was already stupid to pursue more tax cuts once the country decided to wage a large war on terrorism, it is supremely stupid to stay on the same course now that Katrina has added to our fiscal burdens and Rita, God help us, threatens to add more.
Or maybe it's the rest of us who should be called stupid if we keep taking these guys at their word. Are we all so dazed that we'll keep believing them even after a hurricane has blown away their alibis?