published Saturday, June 25th, 2011

Taking the nation hostage

The Republican negotiators who on Thursday walked out of budget negotiations over how to limit the federal debt — and the conditions they are demanding for raising the current debt ceiling to protect America’s credit rating and economy — seem to be in denial about how the nation came to be stuck with a $14 trillion-plus federal debt.

In fact, the Republican Party is directly responsible for the lion’s share of the $14.3 trillion budget deficit that they now pretend to be so vexed about. But if the debt problem is going to be solved, there will have to be a bipartisan solution. And such a solution must necessarily recognize, and remedy, the consequence of their deep high-end tax cuts and corporate tax expenditures (the budget term for tax breaks) that are responsible for at least half of the deficit problem.

The negotiations, led by Vice President Joe Biden, had been making progress. Democrats had agreed to negotiated cuts of some $2 trillion in projected spending for social programs and entitlements over the 10-year time frame under discussion — the target point of the discussion over whether to raise the nation’s current debt ceiling before the early August deadline. But to keep some of burden for deficit reduction off working families and ordinary wage-earners, the Democrats rightly had to seek some revenue measures and cutbacks in tax expenditures. That’s when Rep. Eric Cantor, the House majority leader, threw a fit and walked out. His colleague, Sen. John Kyl, the second-ranking Republican in the Senate, obligingly followed him.

Cantor’s tantrum scene was a set piece of political calculation. He knows the hard-right Tea Party types in the House who are wagging the Republicans’ tail have become fixed in their notion that there must be no compromise toward the idea of mixing revenue-raising measures with the spending cuts they are demanding.

This is so unrealistic as to be mind-boggling, however. The $1.3 trillion cost of the Bush II wars in Iraq and Afghanistan were always funded “off-budget” as “emergency” costs to camouflage the deficit spending, but they were put on the taxpayers’ credit card nonetheless, as was the war cost in the pipeline left to President Obama.

Also added to the federal debt by Bush was the $4 trillion, 10-year cost of his tax cuts, which gave the lion’s share to the richest 2 percent of America’s taxpayers — and more narrowly to the top one-tenth of 1 percent, the nation’s multimillionaires and billionaires who reaped an obscene share of the capital gains tax breaks. Bush also added to the federal debt the cost of the prescription drug benefit for Medicare recipients, along with the deficit-building subsidies to private for-profit insurers to lure seniors out of Medicare-proper through Medicare “advantage” policies.

These deficit costs from the Bush administration went on top of the accumulated debt left by the Bush I and Reagan administrations, which formed the bulk of the $5.5 trillion debt that greeted Bush II, who ultimately ran up the federal debt to over $12 trillion before he left office.

This mountain of debt cannot be magically worked off with cuts in Medicare, Medicaid and Social Security — and a raft of other essential federal agencies like the EPA and the National Park Service — as Republicans are now demanding. That would be grossly unfair and enormously burdensome to the 90-plus percent of Americans who could not begin to replace the benefits of the programs for which they have paid tax deductions for decades.

Republicans held benefits to America’s middle class hostage last year to secure an extension of the high-end Bush tax cuts for the super-wealthy. Now they are trying to hold the nation’s credit rating hostage — the stakes in debt ceiling negotiations — to a larger longer-term package of tax benefits for rich citizens and corporations.

Democrats must call their hand. If Republicans are allowed to win the debt ceiling talks on their terms, tax equity and the safety net for middle-class Americans will be irreparably destroyed.

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AndrewLohr said...

The D.C. drunk wants another bottle. The hog wants more swill. Bad as Bush's deficits were, Obama's are far worse (and haven't helped the economy, which is also far worse.) Disney runs parks; we could privatize the Park Service. Cut to a minimal safety net and let people work our way up. Jesus is rather libertarian: who was crucified, he or the taxpayers?

June 25, 2011 at 6:23 a.m.
Momus said...

When the going gets tough... quit!

June 25, 2011 at 7:04 a.m.
SeaMonkey said...

progress...biden wants to add to our debt by spending more, and obama wants tax increases. geitner wants a tax increase on small business....brilliant

this article is total bs...

June 25, 2011 at 7:26 a.m.
Rickaroo said...

Contrary to what the bible-thumper and lib-basher have said in their previous comments this article is on the mark. Immediately after Obama was elected the Repubs let it be known that their #1 agenda was to make him a one-term president. Their agenda hasn't changed in the least. They are doing everything they can to sabotage his presidency and they know that a bad economy is their only hope of sending one of their own once again to occupy the White House.

A good rule of thumb for getting us out of this recession would be to do the complete opposite of what the Repubs call for. To bring this economy out of the toilet any time before the next election would only bode well for Obama and they know that. Anyone with even a modicum of common sense knows that just slashing spending on the middle class and the poor will accomplish nothing, will in fact make matters much worse. And their farcical "pledge" to Grover Norquist to never raise taxes is a sick joke that borders on treason. The only pledge that should concern them is the one they made to uphold the Constitution and to do what is in the best interests of the country. Yet they are trying to set policy based on some nonsensical pledge they made to a silver-spooned maniacal twit who is fixated on completely destroying government - the very government to which these Repub jerks have been elected to represent us! But of course, they don't want to do away with government per se, they just want the type of government that they deem fit – one where the haves have more and the have-nots have less or nothing.

June 25, 2011 at 1:18 p.m.
sangaree said...

@__Their agenda hasn't changed in the least. They are doing everything they can to sabotage his presidency and they know that a bad economy is their only hope of sending one of their own once again to occupy the White House.

That's it, rickaroo, in a nutshell. The Repubs don't care of they destroy America and the American people with it. Just as long as they destroy the president in the process, nothing else matters. Yet, they're loyal sheeple continue to follow them over a clift, and that's what they're banking on.

June 25, 2011 at 2:40 p.m.
timbo said...

This is it not about politics . it is about arithmetic . We can not keep deficit spending 4 ever . Yes, Bush was an idiot to spend like a drunken democrat but Obama is Bush on steroids . Would 1 of you liberals tell me when enough is enough. Can do you even count? I did you vote for either 1 . All the political parties do is playing a cynical game good cop bad cop. They change sides every few years . They are arguing over whether or not we will b 18,000,000,000,000 in debt in 10 years or 20,000,000,000,000 in debt . They both remind me of 2 crack addicts arguing over who takes the most crack .

June 25, 2011 at 4:38 p.m.
hambone said...

It's all a matter of what the tax payer wants. The last time the want and the have was balanced was under Clinton. The deficit spending of the "W" years has almost killed the USA.

June 25, 2011 at 4:59 p.m.
BigRidgePatriot said...

When are you leftists going to grow up and start supporting action to get the debt under control? Every leftist comment on this page is trying to blame a political party for a problem we all know needs to be dealt with. We never get around to talking about how to deal with the problem! The Republicans probably walked out because the Democrats were not serious about reducing the debt and were wasting everyone's time. The Democrats certainly were insisting on tax increases to solve the spending problem.

I would support limited, across the board, tax increases but ONLY AFTER Washington has demonstrated that they are capable of cutting spending. Increasing taxes now will only take some of the pressure off dealing with spending.

June 26, 2011 at 12:44 a.m.
Rational1 said...

America’s fiscal problem is a not a deficit problem, it is a revenue problem. Because the uber-rich and the corporations get massive tax breaks, the nation’s revenue pool has been depleted and the middle class end up footing the bill. During the Great Depression, President Roosevelt recognizing the need to put Americans back to work invested in America’s infrastructure by building Dams, etc. When America’s debts were at its highest after WWII, President Eisenhower pumped money into the American economy by building hospitals, schools and the national highway system. He funded the G.I. Bill so that WWII and Korean vets could benefit from a free education. These stimulus packages infused money into the economy and created much needed jobs while modernizing the nation’s infrastructure. All of those initiatives made America a more competitive nation. The tax rates for the rich were above 75% during the Roosevelt and Eisenhower eras and the nation was solvent. It is a historical fact that we only started to experience deficits once tax breaks for the uber-rich and their corporate brethren became the norm. It is time corporations and the uber-rich started to pay their fair share of taxes. The non-partisan Congressional Budget Office recently stated that if the Reagan and Bush Tax Cuts were rescinded, the deficit would be non-existent in less than six years. What we need is tax reform. However, the Republicans and their corporate minders will never allow tax reform to see the light of day. In the meantime, the party of "no" will willing destroy the nation's economy in order to defeat President Obama and gain back the White House.

June 26, 2011 at 1:53 p.m.
timbo said...

Well "irrational1" that dissertation came directly out of the progressive handbook. Just say it . You want to raise taxes . That seems to be your only idea . I my bakery with that if you also cut spending . that is actually what happened in the ninety's . Four dollars cut verses 1 dollar tax increase . But alas, you libs just want to raise taxes. Therewon't be a compromise and the deficit will get worse . the government will beat up all the money available 4 loans for small business and the country will go to the tipping point. Deficits do matter, especially when it is 14,000,000,000,000 dollars . Can you count the zeros?11

June 26, 2011 at 10:56 p.m.
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