Correction: An earlier version of this column incorrectly reported that the House Republican budget, authored by Rep. Paul Ryan (R-Wis.), would continue adding to the federal debt until 2063. The correct date is 2040; the column that follows has been corrected.
You’re not still worried about the federal deficit, are you? That is so 2010! Get over it! The presidential candidates certainly have.
Mitt Romney would extend all the Bush tax cuts and cut trillions more besides — eliminating taxes on investment income for most Americans, reducing the corporate tax, getting rid of the inheritance tax and more. How would he afford this? Please don’t ask.
President Obama wants to rebuild our infrastructure, and never mind raising the gasoline tax to do so. He would pay by redirecting money that we would have borrowed for foreign wars, if the wars had continued, and instead borrow it for roads. This is what passes for fiscal prudence these days.
Of course, all the candidates still claim to care about debt, and Rick Santorum seems to mean it. But you can see the diminished intensity of the issue by comparing the past two State of the Union addresses.
In 2011, in the wake of the Tea Party-dominated midterm election, Obama declared, “Now, the final critical step in winning the future is to make sure we aren’t buried under a mountain of debt.”
This year that mountain was more of a molehill. “When it comes to the deficit, we’ve already agreed to more than $2 trillion in cuts and savings. But we need to do more,” the president said toward the end of his speech, launching into his argument for higher taxes on the wealthy.
The differences between Obama and either Romney or Gingrich on the role of government and the virtues of a progressive tax code may produce a clarifying autumn debate.
But that debate will not produce momentum for debt reduction in 2013 as long as every candidate is dishonest about what such reduction will require.
Obama gives the impression that the problem can be solved by putting the squeeze on Warren Buffett and his fellow plutocrats.
“Do we want to keep these tax cuts for the wealthiest Americans?” Obama asked last week. “Or do we want to keep our investments in everything else. . .? Because if we’re serious about paying down our debt, we can’t do both.”
Which is true — but if we’re serious about paying down our debt, we’d have to do a lot more. Ending the Bush tax cuts on the rich would raise about $1 trillion, including saved interest costs, over the next 10 years. That is less than the deficit in Obama’s fiscal 2011 budget alone.
When Obama said he is “prepared to make more reforms that rein in the long-term costs of Medicare and Medicaid and strengthen Social Security, so long as those programs remain a guarantee of security for seniors,” he is signaling to deficit hawks that he is open to entitlement reform.
But will voters hear “strengthen Social Security” as a warning of reduced or delayed benefits? Not likely — which is why the speechwriters phrase it that way.
Romney has been more honest about needed Medicare and Social Security reform. But he and Gingrich are deceiving Americans when they say they can have the government they want, reduce debt and still pay as little tax as the candidates are proposing.
The best evidence of that is the House Republican budget, authored by Rep. Paul Ryan (R-Wis.). It would scale back Medicare benefits and cut non-entitlement spending to one-quarter of its current share of GDP by 2050 — yet it would continue racking up deficits until 2040.
“The proposal does not specify the changes to government programs that might be made in order to produce that path,” the Congressional Budget Office dryly noted. Similarly, Romney’s economic plan promises to cap government spending but doesn’t say how, other than to offload Medicaid to the states. “Every government program and budget must be subjected to an intense top-down review,” he bravely vows. The taxes Republicans are willing to collect cannot cover the defense and public services they know voters expect.
If America doesn’t tackle its debt problem, everything else is at risk: economic growth, the safety net for the poor, investment in research and roads. Over the past two years, Obama and congressional Republicans have squandered one chance after another to get serious about fiscal reform. A better political moment is always just over the horizon.
Now the horizon is the November election, and the moment is supposedly the lame-duck session afterward or the beginning of the next administration.
But if the candidates can’t level with us now, they’ll have no mandate then. And the horizon will continue to recede.