The Spending Cuts that Could Save Progressivism

One of the things I like most about the print edition of the Washington Monthly is its ability to see where a larger debate is headed. The new cover story, for example, explores the importance of Democrats targeting tax subsidies, and the difference between tax “cuts” and tax “expenditures.”

That’s awfully good timing, isn’t it?

The editors’ summary of the cover story helps set the stage for a must-read piece:

As talks resume in Washington this week to raise the debt ceiling, Republicans are signaling that the only additional tax revenues they might be willing to accept would be from cuts in federal tax subsidies, $1 trillion of which are provided each year for everything from ethanol production to mortgage interest. Budget hawks have long understood that cutting such “tax expenditures” would greatly improve the nation’s fiscal health. But what liberals should understand is that doing so would also be a major victory for the cause of progressive government.

So argues Cornell University political scientist Suzanne Mettler in the cover story of the July/August issue of the Washington Monthly. Using original survey data, Mettler shows that tax subsidies, which have exploded in size and number in recent years, remain largely invisible to the American people. Citizens who benefit from direct social programs, like food stamps and unemployment insurance, know the government is helping them, but those who receive tax subsidies for things like higher education and home mortgages — most of them affluent — tend not to recognize that the government is coming to their aid. Hence, cutting these social tax expenditures, which Metter calls “the submerged state,” would not only improve the nation’s balance sheet and restore some fairness to the tax code. It could also address the real if inchoate sense many Americans have that government has been “growing,” as measured by deficits and new programs, but in ways that don’t perceptibly make their lives better. Strange as it may sound, doing away with these “submerged” social programs — which, again, accrue mainly to the wealthy — could help restore faith in government.

Read Mettler’s story “20,000 Leagues Under the State.”