Cattle Queen of Wyoming 'Splains Why She's Voting No on Debt-Limit Increase
Over at Reuters, James Pethokoukis details how Barack Obama's insistence on significantly expanded government (this time with much-higher taxes) doomed "the Mother of all budget deals." Rather than pushing for the sort of broad-based tax reform that's everywhere in the winds, the president
…apparently offered to keep top individual rates where they are, at 35 percent, in exchange for tax reform. Now that's a big tax hike. But it's also revealing. As a GOP source on the Hill put it:
Their fierce insistence on higher taxes is beyond bizarre. … The bipartisan consensus on tax reform (broader base & lower rates) was championed by President's fiscal commission, and yet now is being rebuked by the President. Lowering top rates that would help make America more competitive was too large a leap for a true class warrior.
Pethokoukis notes that Obama's fiscal commission relied on revenues equaling more than 21 percent of GDP—an unprecedented take by the feds—in balancing the budget by 2035, and concludes:
Obama sees a need for a permanently bigger government and a lot more tax revenue to fund it. Had Obama agreed with his own debt commission and Republicans, a big agreement was possible. Or he could have proposed real reforms to entitlements. But he declined and there wasn't a mega-deal. Don't blame [Speaker of the House John] Boehner for that.
Meanwhile, Rep. Cynthia Lummis (R-Wyo.), who says she was leaning toward voting for an extension, explains why she is voting no on any debt-limit increase that doesn't do anything except give Congress a little more rope by which to hang our financial future. Because she's from Wyoming, she naturally has to talk about wrassling cattle or punching dogeys or spitting buckshot or something. But such cornpone shouldn't get in the way of her basic message:
I am deeply worried that an Aug. 1 agreement will fall short of what is needed to prevent a national fiscal crisis. One not related to debt default, but a crisis of spending, debt, deficits and entitlement reform — denial by the very people who know how to prevent such a crisis in the first place.
I would rather instruct Treasury Secretary Timothy Geithner to: (1) pay principal and interest on our bonds (which then enables issuance of new bonds under the ceiling) (2) pay our combat troops (3) make Social Security payments, than add to the weight of our debt burden and send America plunging into the ravine – with our children and grandchildren on board.
Like backing the load of cattle down that slope last weekend, to save my truck, trailer, cattle and me from a self-imposed calamity, the debt ravine may be the most calamitous alternative that Congress is considering.
Read the whole thing. Lummis is right that reaching the debt limit IS NOT (emphasis MINE!) the same as defaulting. As Reason columnist and Mercatus economist Veronique de Rugy has pointed out time and again (read this interview with her in The Daily Caller), the government can prioritize its spending to make sure there is no default; additionally, it can use cash on hand, sales of TARP assets, and more to cover its bills in the near term. There is simply no reason to create a panic-driven "grand bargain" to deal with a spending-revenue mismatch that requires serious, dare-we-say-it transformational thinking?
Meanwhile, The Daily Beast is running with a "Will Failed Debt Deal Doom Boehner?" headline to a squib suggesting the Speaker may be in trouble with anti-tax colleagues for simply considering a deal that might have jacked taxes by a trillion-plus dollars over the coming years. Maybe, but the only reason Boehner was resisting at all was due to the pressure not so much from fellow Republicans but from Tea Party voters who sent a clear message about spending in the midterm elections. Recall that prior to last fall's elections, Boehner (and possible rival Eric Cantor) couldn't even be bothered to push a serious plan to reduce short- and long-term spending, opting instead to go with a phoney-baloney Pledge to America that had more loopholes than a pound of Swiss Cheese (hats off to mangled metaphors!).
Here's hoping that after all these stupid preliminaries, the same government that can't pass a budget (hell, Senate Democrats can't even be bothered to propose one on the agreed-upon schedule!) will start to talk seriously and realistically about bringing spending and revenue into balance.
When they do, they might want to consult "The 19 Percent Solution" proffered by de Rugy and me in the March issue of Reason. It lays out how to balance the budget over 10 years without raising taxes while leaving spending higher as a percentage of GDP than it was in Bill Clinton's final year. That's not ideal, but it can get the conversation on the proper size and scope of government started.