Is Speaker of the House John Boehner (R-Ohio) really so dumb—or unprincipled—that he will buy into a plan that raises $1.2 trillion in tax revenue starting next year in exchange for $400 billion in entitlement cuts between 2023 and 2033?
That's what Politico is reporting:
Taxes will go up just shy of $1.2 trillion — the middle ground of what President Barack Obama wants and what Republicans say they could stomach. Entitlement programs, mainly Medicare, will be cut by no less than $400 billion — and perhaps a lot more, to get Republicans to swallow those tax hikes. There will be at least $1.2 trillion in spending cuts and "war savings." And any final deal will come not by a group effort but in a private deal between two men: Obama and House Speaker John Boehner (R-Ohio). The two men had a 30-minute phone conversation Wednesday night — but the private lines of communications remain very much open.
Jim VandeHei and Mike Allen write that Obama will show "zero flexibility on his insistence on a higher tax rate for top earners" and that Boehner and Republicans, worried that the GOP will shoulder blame for any economic slowdown associated with going over the fiscal cliff, will acquiesce if they can pretend they fought to keep taxes low and succeeded in getting "specific cuts to entitlement spending." Because Paul Ryan's Medicare reforms didn't start (barely) reducing outlays for a decade, VandeHei and Allen say that both Democratic and Republicans will ultimately push off spending cuts until sometime "between 10 and 20 years from now."
This sort of negotiation is appalling but has the ring of truth to it. Recall that Boehner is in no way a small-government enthusiast—indeed, he's voted for just about every big-ticket item you can name in the past dozen years, from No Child Left Behind to invading Iraq to Medicare Part D to Bush's 2008 stimulus to TARP. And recall, too, that mere weeks before the 2010 elections, when the Tea Party was at its height, he released a "Pledge to America" that promised to cut a measly $100 billion in spending (which, as Peter Suderman noted at the time, was actually more like $50 billion) out of a budget north of $3.5 trillion. On top of that, when asked by NBC News in January 2011 to name a single program "we could do without," Boehner replied, "I don't think I have one off the top of my head."
Whether Boehner can sell such a deal to House Republicans is another matter (the Washington Examiner's Conn Carroll flatly says there is "no way" the GOP members will sign on to such a deal).
This is as good a time as any to remind people that we have such high and growing levels of debt is because Republicans and Democrats alike have jacked up spending like nobody's business. Look upon the chart of federal outlays per capita and despair. Going back to Jimmy Carter, there's a clear pattern: Republican presidents ratchet up spending and Democratic presidents consolidate the increases. This reality is at almost complete odds with political rhetoric, in which Republicans masquerade as spending hawks and Democrats talk about increasing outlays for the wretched of the nation. Perhaps the near-total disconnect between rhetoric and reality is the reason why we can't get anywhere—taxpayers are constantly being misdirected by the powers that be.
Here's another point worth underscoring: High levels of public spending and debt retard the economic growth that increases living standards. The case against endless public spending and the debt it inevitably creates isn't an abstract argument about paying your way or being moral or anything like that. There's a crushingly strong empirical case that public spending crowds out private investment and that "debt overhang" reduces growth.
As I noted earlier today, Barack Obama never misses an opportunity to say that he favors a "balanced approach" to getting the government's finances in order. He's on the record saying that he's willing to cut $2.50 in government spending for every $1 increase in tax revenue. And now John Boehner—the head of the opposition party, fer chrissakes!—is ready to jump on a deal that nets $1 dollar of spending cuts for $3 in revenue (never mind that the tax hikes start now and the spending cuts 10 years down the road).
No wonder we're screwed. No wonder at all.