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June 3, 2004
This Sounds Depressingly Familiar

When I lived in California, the Democrat-controlled Legislature could never produce a budget on time. The situation got so bad that Californians debated referenda cutting off salaries and per-diem payments to the state Assembly and Senate from the start of the new fiscal year (July 1) until a bugget was passed and signed into law. Their continuing failure to pass budgets brought the state Democratic party much-deserved scorn, inasmuch as they controlled both houses of the Legislature.

Now, however, the shoe resides firmly on the other foot at the federal level, and Republicans not only don't think they can pass a budget on time, they're debating on whether to pass one at all:

They have tried sweet-talk and dire warnings, insults and bluffing tactics. None of it has worked, which is why a growing number of Republicans are beginning to despair about agreeing on a budget plan for next year.

Embarrassing as that would be for the party that controls both houses of Congress, many Republicans are concluding they would be better off with no budget plan than with one that would require them to pay the cost of permanently extending last year's tax cuts. Senate Republican leaders, back from their Memorial Day recess, showed little sign on Wednesday of persuading a small band of rebels within their own party to drop their insistence on "pay as you go" rules.

In this case, Republicans not only have majorities in both houses but also control the executive branch. The problem isn't compromise between the parties, but compromising two very Republican instincts that have become opposing forces: cutting taxes and curbing deficit spending. These motives shouldn't be mutually exclusive, but the natural solution -- cutting spending -- won't fly in an election year.

John McCain leads a small group of Senate Republicans who oppose extending the tax cuts due to the increasing deficit that war spending has created at the federal level, as well as pork-barrel projects unrelated to anything except getting elected. This small group relies on a study done by two liberal think tanks that warn the price of the deficit will be borne by lower-income families. How do I know they're liberal? Listen to how they describe tax cuts:

On Wednesday, two liberal policy research groups released a study estimating that the ultimate cost of the tax cuts would fall overwhelmingly on middle- and lower-income families. According to the study, by the Tax Policy Center and the Center on Budget and Policy Priorities, more than three-quarters of all households would end up net losers if the government actually paid for the tax cuts by either spending cuts or other tax increases.

But the wealthiest one-fifth of families, who are by far the biggest beneficiaries of the tax cuts, would end up big winners. "We should think of tax cuts as loans, not as grants [emph mine -- Ed.], and in particular as loans that are not paid back by the same people who get them," said William G. Gale, a senior economist at the Tax Policy Center.

I don't see tax cuts as either loans or grants -- I see them as not confiscating money that belongs to me in the first place. I'm no tax protestor; I understand that the government needs funds to operate in the manner our elected representatives have chosen. However, I resent the notion that when government allows me to keep some of what I've earned, it somehow equates to a loan, or a grant. Too many people in Washington (and at the state level as well) think this way, which is why we get lectured on being too greedy to pay "our fair share" of taxes on a regular basis by the likes of Howell Raines.

On the other hand, I don't think that the government should be allowed to continually spend more than it takes in, either. I agree with the dissidents on this point, at least narrowly. This argument is the same we Reaganites made in the 1980s, to sime degree futilely, and which finally got picked up by the Clintons after the disastrous 1994 elections. I disagree with the McCain contingent, though, on how to achieve solvency. Total revenues to the federal government are close to post-WWII lows in terms of percentage of GDP, at least according to this survey. In order to balance the budget, then, Congress must decrease the size of government or increase revenues. I favor the former, obviously, but just as clearly some Republicans lack the political will to fight for what used to be a cornerstone of Republican philosophy.

Since it appears we can't get either side to agree totally on which approach to take, I suggest that Republicans put their heads together and agree to do something to get a budget passed. This election will be difficult enough without adding GOP instransigence as another excuse to go Democrat. We can hardly fault Tom Daschle and his gang for obstructionist maneuvering on judicial nominations when the Republicans practice the same techniques on themselves in failing to produce on the most elementary of all Congressional tasks. Skipping it and making excuses won't cut it in November.

Updated for clarification -- I favor decreasing the size of government, and I inadvertently wrote the opposite.

Sphere It Digg! View blog reactions
Posted by Ed Morrissey at June 3, 2004 7:33 AM

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Tracked on June 3, 2004 12:51 PM

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