Letting the tax cuts expire for individuals earning over $200,000 and families over $250,000 would generate $700 billion in revenues for the government over the next 10 years. You can't walk away from that kind of money and claim to be serious about deficit reduction.
President Barack Obama has urged Congress to extend the Bush tax cuts for everyone except high-income earning individuals and families. It's the right thing to do if we're going to attack the problem.
Letting the tax cuts expire for individuals earning over $200,000 and families over $250,000 would generate $700 billion in revenues for the government over the next 10 years. You can't walk away from that kind of money and claim to be serious about deficit reduction, a point that seems lost on congressional Republicans.
But the Obama administration indicated it was open to compromise, possibly a one- or two-year extension. From Seoul, the president said, "It would be fiscally irresponsible of us to permanently extend the high-income tax cuts."
But if the administration and Congress don't face up to that now, the delay only kicks the can, to use the current Washington cliche, into the next election cycle with likely the same results. Postponing a decision on tax rates also extends the "uncertainty" Obama's critics say is preventing businesses from hiring.
During the campaign, GOP tea party-backed candidates were adamant about the need to abolish earmarks, or specially mandated spending on individual lawmakers' projects. In the whole scope of the federal budget, it is not a large amount of money –– last fiscal year, it entailed 9,413 projects costing about $16 billion –– but the process has become symbolic of backroom budgets.
Not so fast, tea partiers. GOP bulls of the Senate like James Inhofe and Tom Coburn are explaining to the newcomers that earmarks are actually good things. For reasons ranging from the lofty (protecting constitutional prerogatives) to the crass (keeping the money out of Obama's hands), they say earmarks must be retained. Both senators have written defenses of earmarks that could serve as talking points for the tea partiers to explain their “about face” to the folks back home.
For bipartisan waffling on the need to curb government spending and attack the deficit, it's hard to beat the reaction to the preliminary recommendations from a blue-ribbon panel on deficit reduction: a combination of thunderous silence from the president and vociferous opposition from the two wings of Congress.
Barring a miraculous explosion in economic growth, deficit reduction can only be achieved by some combination of tax increases and spending cuts. The right, and especially the tea party wing, is flatly opposed to any tax increases, and the left is opposed to major cuts in domestic programs.
But the lines aren't clearly drawn that even. Social Security and Medicare are the two 800-pound gorillas in the budget, and they are also the programs most popular with the public. But any serious deficit reduction will require changes in those programs. However, even tea party-favorite Sen. Jim DeMint sees no need to modify Social Security.
"If we can just cut the administrative waste, we can cut hundreds of billions of dollars at the federal level," DeMint told “Meet The Press.”
Faced with a problem of its own making, and one with obvious but unpleasant solutions, Congress is desperately searching for a way to stick with the status quo.