GOP BLASTS DEMS FOR STICKING TO A REPUBLICAN PLAN…. As bad as the Republicans’ “Tax Fairy” nonsense is, the notion that a “Democrat [sic] tax hike” is on the way is every bit as absurd, and arguably even more dishonest.
Chances are, you haven’t heard about a Democratic plan to raise taxes on “every” American — including those in the middle class — probably because such a proposal doesn’t exist. But Republicans, including Rep. Dave Camp (R-Mich.), the ranking member on the House Ways and Means Committee, is pushing nonsense in the hopes voters won’t look too closely and notice his shameless dishonesty.
The pitch is simple: if the massive, reckless Bush tax cuts expire as planned, taxpayers will go back to the rates they paid in the 1990s (when the economy was strong and the deficit was nonexistent). Since Democrats don’t plan to maintain Bush’s failed tax policies, Republicans are arguing that Dems are necessarily planning to raise everyone’s taxes.
There are, of course, two problems here. The first is that Democrats plan to keep some, and perhaps even all, of the existing tax rates, a detail the GOP is pretending to ignore. The second is that Democrats, if they were to allow the lower rates to expire, would simply be following the policies set out by Republicans. Ezra Klein had a good item on this today.
To understand what’s going on here, you need to go back 10 years to the passage of the Bush tax cuts. In order to maximize the size of the cuts, Republicans had to minimize the influence of minority Democrats on the package. So they chose to run the bill through the reconciliation process.
But that posed some challenges. Budget reconciliation had never been used to increase the deficit. In fact, it specifically existed to decrease the deficit. That’s why one of its rules was that you couldn’t use it to increase the deficit outside the budget window. Republicans realized they could take that very literally: The budget window was 10 years. So if the tax cuts expired after 10 years, they wouldn’t increase the deficit outside the budget window. They’d also have the added benefit of appearing less costly in the Congressional Budget Office’s estimates, as the CBO duly scored them as expiring after 10 years, which kept the long-range budget picture from exploding.
Exactly. Republicans couldn’t address their cuts through honest budgeting, so they played a game — claiming the cuts would expire, obscuring their cost, and making them eligible for an up-or-down vote. The GOP could have done their due diligence, and found a way to pay for their own policies — in other words, they could have acted like Democrats who’ve paid for their major policy initiatives — but they refused.
Legislatively, it worked; the cuts passed. Economically, it failed — the robust growth never materialized; job growth was abysmal; and the deficit soared.
So, faced with a budget mess created by Republicans a decade later, Democrats are inclined to follow the Republican policy — let some of the cuts expire, eventually, just as the GOP’s law mandated. This, in turn, will help lower the deficit, which the GOP pretends to care about. Republicans are screaming bloody murder about a “tax increase,” but in reality, Democrats aren’t raising taxes, so much as they’re executing the Republicans’ plan and allowing the lower rates on the wealthy to revert back to 1990s levels.
In effect, the GOP is whining incessantly about Democrats following the Republican script too closely. The GOP shouldn’t complain — this was their idea.