As federal budget deficits continue to decline, and austerian debt-and-deficit hawkery continues to lose its death grip on the punditocracy, and “grand bargain” budget negotiations fade from view, it’s as good a time as any to contemplate a very different kind of fiscal debate. At TNR, our own Ryan Cooper goes there aggressively, saying it may be time to replace the failed idea of tax-increases-for-entitlement-reform bipartisan deals with their inverse: tax cuts for spending increases.
[W]hile Republicans are largely immune to evidence, it’s also true they don’t actually care about the deficit in and of itself. They favor reduced taxes on the rich, and cutting social insurance. What’s more, conservative reformists at places like National Affairs have gotten louder and bolder in their advocacy of new thinking, even including infrastructure spending.
So if the center, especially including President Obama, can be persuaded to drop their deficit obsession (and again, it’s hardly possible to overstate how badly this debate has been lost), we could trade tax cuts for some austerity relief, like re-extending unemployment benefits and food stamps. And, it’s important to note, both spending increases and tax cuts count as austerity relief. Tax cuts, especially on the rich, aren’t very good stimulus, but they still put money into people’s pockets.
But the main point is to shift ground for negotiation. This strategy of “tax cuts for more spending” has been suggested many times in the past few years and gone nowhere. But before that, it has been the basis for many successful bipartisan deals, including expanding Medicaid in the 80s and the CHIP program in the 90s.
I dunno. Aside from the habitual attachment of most conservatives to austerity, there’s the fact that the explosion of fears about short-term deficits hasn’t extended to long-term deficits, which an awful lot of progressive economists still worry about. The kinds of tax cuts Republicans would insist on this this kind of deal are likely to be large and permanent and regressive. It hasn’t been that long since many liberals faulted Obama for accepting a continuation of the Bush tax cuts for middle-income taxpayers. And there’s a sizable gap between refusing to treat short-term deficits as an urgent problem and agreeing across party lines to increase them.
But as a political tactic aimed at at dividing conservatives, the idea of replacing a politics of mutually assured destruction with one you might call Mutually Assured Dessert has its merits. But it’s almost certainly premature to say the GOP sugar tooth for tax cuts plus earmarks and highway-building has fully returned.