It’s budget day, and no doubt a lot of self-described deficit hawks are going to be taking Barack Obama to task for favoring only long-term deficit cuts. So perhaps this is a good time to reiterate that on deficit reduction, the Democrats really are the only game in town.
This is confirned yet again by the big news out this afternoon: That Republicans in the House are now supporting a payroll tax cut extension that isn’t paid for.
This comes after months of unsuccessful talks about finding budget “offsets” for Barack Obama’s proposed extension (along with an extension of unemployment insurance benefits and the Medicare Doc Fix). Republicans support paying for the extension with a federal pay freeze, among other things. Dems want the wealthy to sacrifice a bit to fund continuing this tax cut for 160 working Americans, and they appear to be refusing to budge.
So Republicans have decided to back an unfunded extension. In other words, when push comes to shove, they’d much rather increase the federal budget deficit than to raise even a dime of taxes on wealthy Americans.
Sure, Republicans talk tough about balanced budgets. But when it comes to real budget deficits — you know, federal spending vs. federal revenues — Republicans lose interest real fast. Under closer scrutiny, their plans dissolve into gimmicks and magic asterisks. When Obama and Speaker John Boehner started serious negotiations into larger deficit reductions last year, the House GOP conference revolted. Their big structural reforms, from “CutGo” to the line item veto to their “balanced” budget amendment, virtually always turn out to be perhaps effective tools for keeping taxes low for rich folks, but do nothing at all for getting spending and revenues to match. And now, the same thing has happened on the payroll tax cut. Republicans simply don’t rank fiscal balance very high in their list of priorities. They’re always willing to cut spending on those things they don’t want to spend money on anyway, but if it comes to compromising, what gives way is their supposed commitment to budget discipline.
Obama’s election year budget, at a time of divided government, is no doubt in large part a campaign document. And it has several items the president is going to press hard on that play well politically, including the “Buffett rule” and returning to taxing dividends at the same rate as ordinary income. The key for any real deficit hawk to understand is that right now, Republicans won’t support anything that raises taxes on the rich — which is to say they’re not supporting a meaningful path to lower long term deficits. They didn’t last year, and they won’t this year. No matter what their initial rhetoric claims.