“Democrats have supported $1.6 trillion in cuts. $1.2 in the Budget Control Act, and another $400 billion in other actions taken in the last Congress, last year. $1.6 trillion dollars. The whole idea was to have it balanced. On the revenue side we have $600 billion. So what is that — two to one, three to one, in favor of cuts. So I hope that you would in your messaging to the American people make it clear that we have made cuts. We have passed bills for those cuts. But we want to see more on the revenue side to make this happen.”
This gives rise to an idea on how Republicans can walk away from this whole fight as the clear winners. With the help of Paul Van de Water, a senior fellow at the liberal leaning Center on Budget and Policy Priorities, I tried a thought experiment.
It’s somewhat broadly agreed that a fair goal for round three of the fiscal drama is a minimum of another $1.5 trillion in deficit reduction. Right now, we’ve already achieved around $2.2 trillion in deficit reduction: Dems have agreed to around $1.5 trillion in spending cuts; Republicans have agreed to around $700 billion in revenues. Where does that leave us? The total: Dems have thus far conceded around twice as much in spending cuts as Republicans have in revenues.
So let’s say Republicans and Dems agree to a roughly one to one split in cuts versus revenues to resolve the remaining $1.5 trillion. That would be roughly $660 billion in new cuts; roughly $660 billion in new revenues; and $200 billion in interest savings. Broadly speaking, Van de Water says, you’d end up with Dems agreeing to around $2.2 trillion in overall spending cuts, and Republicans agreeing to $1.3 trillion in new revenues.
That’s roughly a 1.6-to-one ratio. You see? In this scenario, Republicans could declare victory, and they’d be right.
Heck, let’s give Republicans an even bigger victory. Let’s give them an overall cuts-to-revenues victory of two to one. It’s easy to get there; it all turns on how you divide that remaining $1.5 trillion in deficit reduction. Republicans would simply have to agree to a measly $477 billion in new revenues, while Dems agreed to $842 billion in new spending cuts. (We’re again factoring in the $200 billion in interests savings). This would mean Republicans agreed to an overall total of $1.2 trillion in revenue increases, while Dems agreed to an overall total of $2.4 trillion in spending cuts. (Fixed.)
That would be roughly a two-to-one ratio. You see? In this scenario, Republicans could declare victory, and they’d be right.
Now, it’s unclear if Dems would agree to the latter scenario, but it doesn’t seem out of the realm of possibility, and they’d certainly agree to the former one. Either way, though, the basic point is that even if Republicans agreed to new revenues this time, they could rightly say they emerged the winners in the end. They’d get yet another round of spending cuts; and our fiscal problems would have been resolved mostly — though not entirely — their way.
But they won’t do this. And this gets us to the final point. Republicans have defined victory in this battle as agreeing to no revenue increases whatsoever. This is the problem in a nutshell. It has deluded Republican voters and some lawmakers into believing this is a real possibility, which in turn has precluded them from taking the far easier route to victory that’s plainly available to them.