Economist Mom
House Budget Chairman Paul Ryan (R-Wis.) speaks during a news conference as he unveils "The FY2013 Budget - The Path to Prosperity." with members of the House Budget Committee at Capitol Hill in Washington March 20, 2012. U.S. House Republicans on Tuesday unveiled an ambitious plan to cut and simplify taxes, slash spending and make a new run at overhauling the Medicare health program in a bid to draw a stark election-year contrast between their vision and that of President Barack Obama. (Jose Luis Magana/Reuters)
Paul Ryan's budget and the sticking point between the left and right
Today House Budget Committee chairman, Paul Ryan (R-WI) unveiled the House Republican budget proposal with a lot of fanfare and his latest snazzy video. The fundamental structure of the proposal itself is not really “news” in that Ryan has remained consistent to his word that the fiscal situation is a spending-side-only problem and that the level of revenues as a share of our economy should be maintained around its 40-year historical average.
Relating that to the story on the Senate Budget Committee chairman, Kent Conrad (D-ND) which appeared over the weekend in the Washington Post (written excellently by Lori Montgomery), I find it striking that both of the budget chairmen (from the two different houses and two different parties) now talk about tax expenditures as government spending that just happens to be done by poking holes into the income tax system. In his own budget, Ryan refers to this “spending through the tax code” (pg. 67) and also points out how the rich benefit the most from these “tax subsidies.” In other words, like Kent Conrad, Paul Ryan recognizes that if we reduced these tax expenditures, we would not be raising taxes as much as reducing spending.
On the other hand, Ryan stresses that his proposal to eliminate these tax subsidies would be “not for the purpose of increasing total tax revenues, but instead to lower rates.”
So, revenues relative to GDP remains the huge sticking point in what would otherwise seemingly be complete bipartisan agreement on the shape of badly-needed tax reform. How best to break that impasse is the key to making huge progress on deficit reduction. I think it will have to wait until after the election, however, because for now the Democrats would rather attack the Republicans for their deficit-reduction approach that implies huge, draconian cuts in direct spending and benefits than convince the Republicans to move away from that approach and more toward revenue-raising-but-by-base-broadening tax reform. And Republicans would rather attack the Democrats for their strategy of “soaking the rich” (and the “job creators”) than convince the Democrats that broadening the tax base by reducing tax expenditures is actually a progressive (as well as efficient) way to raise tax burdens on the rich.
A view of the U.S. Capitol building during sunset from Pennsylvania Avenue in Washington is shown in this file photo. Rogers argues that tax policy is not a fix-all solution for the economy, but certain reforms would be a huge help. (Jose Luis Magana/Reuters/Fie)
Tax policy won't fix the economy on its own
My latest Tax Notes column which came out today (subscription-only access here) is basically a recap of my testimony on March 1st before the Senate Budget Committee. It’s a written version of the script I used for my oral remarks, plus a chance to report (or vent) about the line of questioning that came from one of the Republican senators that day.
About the basic premise of the hearing, which was called “”Tax Reform to Encourage Growth, Reduce the Deficit, and Promote Fairness,” I explain that:
I recently heard the three tax reform goals listed in the hearing’s title referred to as a “fiscal trilemma,” suggesting it might not be possible to achieve them all.2 Equating the three with a dilemma suggests that working toward them will be a negative experience. Indeed, many policymakers are caught speaking of at least one of the goals with partisan disdain: “encouraging growth” (a popular Republican goal) might be labeled by some Democrats as “pandering to the rich”; “reducing the deficit” by including at least some new revenue (a popular centrist goal) might be labeled by some on both sides as “killing jobs”; and “promoting fairness” (a popular Democratic goal) might be called “class warfare” by some Republicans.
Nonpartisan economists would respond that all three goals will benefit the economy. And the good news is that it really is possible to find tax policy changes that would help achieve all three goals — and possibly help achieve simplicity. That good news is doubled by the recognition that different policymakers actually like all the goals more than they’ll admit in public, but they assign different implicit weights to the different goals — suggesting that the only way to ensure bipartisan agreement is to make sure a proposal helps achieve all three goals.
I then explain the problem with the tax policy “fairy tale” that sounds so happy and easy:
[M]any so-called tax policy experts spin a simple fairy tale when they talk about how to reform the tax system. They say that we just need to cut tax rates, which will expand the economy, which in turn will reduce the deficit. But unfortunately, in the real world, we face real budget constraints and a real scarcity of resources. Real economists know that optimizing means not just maximizing benefits but weighing benefits against costs so that benefits net of costs are maximized. In the context of the real world and our experiences with the economic effects of different tax policies, cutting tax rates to achieve all of our goals is pure fantasy.
I made three main points in my testimony regarding the goals of encouraging growth, reducing the deficit, and promoting fairness:
And the only part of the Q and A where I have to admit I felt a bit “bullied” was this:
One of the more hostile exchanges at the hearing was when Sen. Ron Johnson, R-Wis., questioned what we thought the maximum marginal tax rate should be. Each time [Len] Burman [of Syracuse, the other witness invited by Chairman Conrad] and I tried to respond that it depends on the breadth of and distortions within the existing tax base, Johnson interrupted and insisted on our providing a specific number without any qualifications. It was obviously a setup, as [Dan] Mitchell [the Republican witness from the Cato Institute] described in a blog post. Although I reluctantly gave a specific answer of 70 to 80 percent, I wasn’t advocating a marginal tax rate that high but only responding that a total marginal tax rate — combining taxes at all levels of government — any higher than that would be a bad idea. I tried to point out that the maximum marginal tax rate could mean the rate on the richest person in the country’s last dollar earned. I believe 70 to 80 percent is around Laffer curve levels — the highest rate possible before revenue is lost. [In the Tax Notes column I cited this NBER paper by Christina and David Romer.]
That maximum marginal tax rate is totally different, however, from the survey results Mitchell cites that show people not wanting anyone to be taxed at more than 30 percent. Mitchell understandably likes the interpretation that ordinary Americans are referring to the maximum top marginal tax rate bracket. But I really doubt that most Americans understand the difference between marginal and average tax rates, or if they do, that they are inclined to automatically think top marginal rate (on the last dollar earned) when asked about the maximum tax rate that top earners should pay. When thinking about what’s fair, I think most people have in mind the common-sense statistic of taxes paid relative to income, or the average tax rate.
In fact, if the very richest people in America faced a marginal tax rate on their millionth-plus dollar earned of 70 to 80 percent, their average tax rate would still very likely be close to 30 percent. We might contemplate such high marginal rates at the top if we had failed to achieve the best solution of broadening the tax base and we were trying to make the tax system more progressive (while raising revenue for deficit reduction) by only raising — or creating new — top marginal tax rate brackets.
[But] Let’s be clear that I spent the whole hearing advocating for base broadening that would keep rates low. But I was asked what the maximum top marginal tax rate could be that the economy could handle, regardless of how successful or not we might be with base broadening efforts…
I encourage EconomistMom readers to view the hearing video and judge for yourself whether Senator Johnson was playing nicely or not. Either way, I don’t think his or Dan Mitchell’s view that marginal tax rates on the rich are already high enough to be worrisome has much basis in reality. (Nor did the story that came out the very day of the hearing (March 1) about Dan Mitchell’s organization, the Cato Institute, and how much it is influenced by the Koch brothers, help Mitchell’s credibility as an objective and fact-based economist.)
Even so, I still would prefer we raise revenue by not raising marginal tax rates further and instead broadening the tax base (reducing tax expenditures) in (very easily) progressive ways. The “trilemma” of tax reform is entirely possible to achieve and is actually the best way to succeed, politically and economically, in doing goodtax reform.
President Obama speaks to employees at the Master Lock Company in Milwaukee, Wednesday, Feb. 15, 2012, about the importance of American manufacturing. The president's budget has some bold new tax provisions, according to Rogers. (Spencer Green/AP)
Obama's budget has some bold moves
Here is a sort of data dump (sorry) of various reactions I’ve had to the President’s FY2013 budget proposals in the past week.
My organization, the Concord Coalition, put out this statement on Monday, accompanied by the video summary above that my colleague Josh Gordon and I made.
(I also did this radio interview on Patt Morrison’s show on southern CA’s NPR station, KPCC, on Monday.)
I was most intrigued by what is new in the President’s proposals in terms of tax policy: there’s actually a bolder move to combine the “Buffett Rule”–raising taxes on the rich so that their effective (average) tax burdens aren’t any lower than those of middle-class households–with a more fundamental tax reform strategy (which economists like) of broadening the tax base. I’ve said before that there are lots of different ways to raise taxes on millionaires, but I’d prefer to see it done by reducing tax expenditures (which disproportionately benefit higher-income households and are also economically inefficient) rather than by (just) raising marginal tax rates on the currently rather narrow definition of taxable income.
Two tax proposals new to the President’s budget this year that score well in this regard are: (i) the expansion of the limit of itemized deductions policy to a broader set of tax preferences–including the exclusion of employer-provided health benefits (wow!); and (ii) letting the expiration of the Bush tax cuts for high-income households extend to the full expiration of preferential dividend tax rates, such that they would return to being taxed at full, ordinary income rates.
I wrote on Concord’s blog about the itemized deduction proposal here.
I write about this “Buffett Rule route to fundamental tax reform” among my other reactions to the tax policies in the President’s budget in my next Tax Notes column, which comes out next Monday. I’ll give a Cliff’s Notes version of that column here then.
This file photo shows a protest rally at the State Capitol building in Madison, Wisconsin. Rogers argues that treating capital gains like ordinary income would be a huge step in fair taxation of the rich. (Ann Hermes/The Christian Science Monitor/File)
How to tax millionaires, the right way
My column in this week’s Tax Notes (subscription-only access here) focuses on just a few of the different ways we could get more tax revenue from millionaires, summarized in the table here (The sources for all these numbers are various distributional estimates from the Tax Policy Center, referenced in the Tax Notes publication.) The progressive nature of the federal income tax system, where tax burdens as a share of income in general rise with income through marginal tax rates that rise with income, and the implied upside-down subsidies created by poking holes in the tax base with exemptions and deductions (a.k.a. “tax expenditures”), makes it easy to raise tax burdens on the rich. We can either make the rate structure steeper, or we can broaden the tax base for any given (already-progressive) rate structure.
Some ways are better than others from an economic efficiency standpoint, in that they level out the very uneven playing field, reducing the tax distortions between fully taxed and more lightly taxed (or untaxed) activities. These would include proposals 3 and 4 –treating capital gains and dividends like ordinary income, and limiting itemized deductions to 28 percent. Others might be viewed as preferable from a fairness perspective if the goal is to reduce income inequality and increase the share of the tax burden borne by millionaires–a statistic I dubbed “millionarity” in the table. These include proposals 2 (letting just the high-end Bush tax cuts expire) and 5 (the millionaire surtax). Still, my favorite tax policy option to point out is the one already in current law (#1 on the list above): letting all the Bush tax cuts expire, which scores low on “millionarity” but high in terms of total revenue raised and even the total dollar amount of higher taxes on millionaires. You want to collect more in taxes from millionaires? Just collect more taxes in general by not passing any more tax policy changes (allowing the Bush tax cuts to expire as scheduled, this second time around, at the end of this year), and you’re assured that you’ll get a disproportionate amount coming from those same millionaires who now disproportionately benefit from those tax cuts we keep extending (and deficit financing).
Another way to raise taxes on millionaires is to use yet another Alternative Minimum Tax (AMT), focused on millionaires only–like the proposal recently introduced by Senator Sheldon Whitehouse (D-RI). I spoke with Forbes’ Janet Novack about why that’s more clever from a political perspective than an economic one. Also in Janet’s column, my friend Len Burman astutely points out the huge incentive to divorce that would be created–if you’re lucky enough to be an unhappy but rich couple, at least.
This Concord Coalition chart shows the extent to which current government fiscal policy trends will lead to sustained federal deficits. (Diane Lim Rogers/Concord Coalition)
New economic outlook report is overly optimistic
The Congressional Budget Office’s new budget and economic outlook is out, and as usual, it really doesn’t seem all that bad when you look at their “baseline” numbers. (Deficits as a share of GDP over the next ten years are still at economically sustainable–less than the growth rate of the economy–levels.) Oh, except that the CBO baseline is (by law) a projection of current-law policies, which assume a lot of very optimistic (some might say “delusional”) things about Congress’s proclivity toward fiscally responsible behavior.
You see, in current law there are lots of costly policies that expire after a year or two…or nine, or two–as in the 2001 Bush tax cuts which were first scheduled to expire at the end of 2010 and now again are scheduled to expire at the end of 2012. Expiring tax cuts have been the most fashionable way to deficit spend in this town ever since.
In their budget outlook, CBO assumes any tax cuts scheduled to expire actually expire. That could mean CBO’s assuming they will actually expire, or it could mean (more realistically but still very optimistically) that if Congress and the president extend the tax cuts in the future, that they will fully offset their cost, by cutting spending or raising other taxes–a novel concept known as “pay as you go.” Once upon a time, Congress followed strict pay as you go rules–on both tax cuts and mandatory spending–and they complied with discretionary spending caps, too. By the way, that was the last time we were actually running budget surpluses, at the end of the Clinton Administration.
Now Congress prefers to make policies look less costly by making them “temporary,” with official expiration dates that CBO has to officially score as being less costly because they (are supposed to) expire. But a more realistic “business as usual” projection would assume that these previously-always-extended-and-deficit-financed tax cuts will continue to be extended and deficit financed.
Enter the Concord Coalition’s “plausible baseline” (illustrated above), which we’ve been calculating for many years now, and which has told (really) the same old story for many years now, just the numbers keep getting worse because the fraction of the tax cuts that are on unofficial time (past expiration dates) vs. official time keeps growing. Every year it seems that the multiple of the deficits under Concord’s plausible baseline relative to those under the CBO official baseline keeps swelling. Last year I remember saying that the plausible baseline’s deficits were triple the CBO deficits. This year it’s closer to quadruple.
Most of the $8.7 trillion ten-year difference, $6.5 trillion, is due to tax policy. The (expiring) Bush tax cuts and associated Alternative Minimum Tax relief alone account for over $4.5 trillion of the difference, even without associated interest costs. (With interest, the deficit-financed extension of the Bush tax cuts and AMT relief would add almost $5.4 trillion to the ten-year deficit numbers.)
Some of you might remember what the so-called “super committee” was trying to do: they were trying to “go big” and find, hmmm, maybe $4 trillion worth of deficit reduction relative to the “business as usual” or “policy-extended” baseline. The “go big” solution is that which most economists feel is necessary to get deficits back down to economically-sustainable levels… like those very ones that are shown in this new CBO report. So that would have been a piece of cake for the super committee–or anyone else in Congress who might want to be a fiscal superhero–if they just looked at the CBO baseline and figured out how to stick to it. (Hint: PAYGO.)
So there’s not much new here. The CBO report still provides us with a fiscal roadmap with one very clear route highlighted as the fastest one to the land of sustainability. All the road signs point clearly to that one route, but all the policymakers keep missing that turnoff ramp, over and over again. And none of them really want to talk about it.
In this file photo, federal income tax forms are on display at a post office in Palo Alto, Calif. Rogers argues that limiting itemized tax deductions would raise revenue and reduce the deficit. (Paul Sakuma/AP/File)
Limting itemized deductions is a no-brainer
It’s a proposal that has come up over and over again in President Obama’s budget, and one that I hope will come up yet again. In my column in today’s Tax Notes, I remind readers that this is a great idea whose time has (been overdue to) come: the proposal to limit itemized deductions–to either 28 percent (the President’s version) or 15 percent (the more aggressive version suggested by CBO’s budget options volume). I like it because it’s a proposal to raise a lot of revenue (and reduce the deficit), yet by reducing a large tax expenditure in a progressive way.
How much revenue would the proposal likely raise? A lot. I refer to CBO estimates:
The CBO estimates the president’s proposal would raise $293 billion over 10 years. A more ambitious version limiting itemized deductions to a 15 percent rate, as presented in the CBO’s compendium of budget options, would raise $1.2 trillion over 10 years — in other words, equivalent to trimming overall tax expenditures [which are over $1 trillion per year] by about 10 percent through that one policy change alone.
A lot of people get confused about this proposal, thinking that it eliminates the tax subsidy for households above the limiting bracket, but it does far from that. It only limits the size of the subsidy so that the richest households don’t get the biggest subsidies per level of the subsidized activities (in both percentage terms and dollar terms), which makes the proposal a very “progressive” way to reduce a (huge) tax expenditure. Right now the subsidy is a regressive one, because for any given level of subsidized activity, higher-bracket households get the biggest subsidies. I constructed the table above to make clearer how that upside-down subsidy works, and how the limit would level at least part of it–the upper end–out. These proposals would not get rid of the regressivity below the limiting bracket, however, which could only be achieved if we went all the way to converting the deduction to a (refundable) credit. Ideally, I would like to see all deductions converted to credits, but limiting deductions to 28 or 15 percent is a good step along that policy path.
And to counter arguments that this would kill the economic activities currently subsidized by the (full) itemized deduction, well, the evidence is actually very inconclusive about how much this tax subsidy actually makes a difference in the level of the subsidized activities (charitable giving, borrowing for homeownership), because it is always difficult to distinguish between real behavioral responses versus tax-strategic ones. Often these tax subsidies just reward behavior rather than influence it, or they encourage something that is not quite the lofty social goal that policymakers had in mind. As I point out in my column:
Assuming that the goal is in fact to encourage and steer resources to the activities that are subsidized, the case for the effectiveness of this particular form of subsidy depends on how much more responsive higher-income households are to the [price incentive] effect than are lower-income households. This is an empirical question that’s difficult to answer from the data because high-income households with the biggest price subsidies are also those with the greatest income capacity (who might donate the most to charity or buy the largest houses regardless of the itemized deduction). And while the evidence that’s out there shows some price responsiveness, it’s not always clear that it’s the type of responsiveness we would want. A larger charitable deduction might encourage more reported giving without increasing real giving, and a larger mortgage interest deduction might encourage people to buy larger houses rather than helping them to buy any house. And all of the deductions may merely reward behavior that would have taken place anyway.
So I put out my column as my strong endorsement of this proposal. The bottom line is that this is a way to raise substantial revenue from only higher-income households and would actually improve economic efficiency (reduce the distortions caused by the tax subsidies). It’s a base-broadening, revenue-raising, deficit-reducing, yet government-shrinking proposal. It’s consistent with the fiscal policy goals of both Democrats and Republicans. It would also be a piece of cake to implement, unlike other base-broadening proposals that have similar economic advantages. Why don’t we just do it, finally?!!
U.S. Republican presidential candidate and former Massachusetts Governor Mitt Romney speaks at a campaign rally at Wofford College in Spartanburg, South Carolina, January 18, 2012. In speeches, Romney claims to be concerned about the poor, but his policies suggest otherwise, Rogers argues. (Jim Young/Reuters)
Despite his words, Romney's policies are terrible for the poor
The Washington Post’s Ruth Marcus points out that if Mitt Romney really cares about the poor, he has a funny way of showing it–in this case, regarding his ideas for fiscal policy reforms:
“I’m concerned about the poor in this country,” Mitt Romney said the other day. “We have to make sure the safety net is strong and able to help those who can’t help themselves.”
I perked up at those words, because they were something of a departure from his usual stump speech and because they happened to come on a day when I had written about the dire implications of Romney’s proposals for the social safety net.
I don’t question his sincerity. The problem: This fine sentiment doesn’t square with his actual policies…
The impact of Romney’s approach on the safety net would go far beyond Medicaid. The brutal arithmetic of his stated plan to cap spending at 20 percent of gross domestic product — while, unlike Ryan, increasing defense funding — is that safety-net programs would have to be chopped significantly beyond where even Ryan would take them.
Romney’s tax plan would exacerbate the unfairness. He would continue the Bush tax cuts for the wealthiest Americans and provide extra breaks that would primarily help the rich…
At the same time, Romney would do away with recent increases in the child tax credit and the earned-income tax credit — provisions that help low-income families…
This is one way to make the necessary tough choices regarding the federal budget: if we choose to keep taxes low and defense spending high, the rest of the budget has to give. There’s a lot to be said for a politician being clear about his priorities and spelling out the policies consistent with those priorities. But as Ruth points out, the consequences must be spelled out, too: you can’t cut spending on the poor that dramatically and expect that the poor will be better off. To do so is either the result of delusional beliefs about extreme “trickle down” economics, or a grossly exaggerated view of how much truly “wasteful” government spending now exists–unless one’s definition of “waste” is simply “that which does not benefit me personally.”
Republican presidential candidate Mitt Romney campaigns at the Florence Civic Center in Florence, S.C., Tuesday, Jan. 17, 2012. Romney revealed that he pays a 15 percent tax rate. (Charles Dharapak/AP)
Romney's tax rate: Good gossip, great lesson
Well, this is going to raise some voters’ eyebrows:
“What’s the effective rate I’ve been paying? It’s probably closer to the 15 percent rate than anything,” Romney, a GOP presidential candidate, said. “My last 10 years, I’ve — my income comes overwhelmingly from some investments made in the past, whether ordinary income or earned annually. I got a little bit of income from my book, but I gave that all away. And then I get speaker’s fees from time to time, but not very much.”
(The “not very much” in speaker’s fees is apparently more than $360,000, by the way.)
Besides being good negative gossip on Romney, though, perhaps it will be a teaching moment for all of us about tax policy more generally. It underscores the fact that even the preferential rate on capital gains and dividend income, even though it seems more an issue about tax rates than tax base, is a big tax expenditure–a big way we “spend” money via the tax code. Relative to a comprehensive income tax base where all forms of income are taxed at the same rate, the lower rates on capital gains and dividends result in well over $100 billion a year in lost revenue. (See Table 17-3 in the revenue section of the analytical perspectives of last year’s budget and note that just the first three capital gains provisions add up to $135 billion for just fiscal year 2012.) So besides the distributional implications that are already unsavory, there are the budgetary implications that should make us question whether these tax preferences are worth their cost.
So let the gossip and thoughtful conversations begin!
This chart shows what would happen to the federal deficit if certain policies were continued. (Congressional Budget Office)
New Year's tax policy resolutions: work together, stick to goals
In my column in this week’s Tax Notes–in which Grover Norquist has been named 2011 “tax person of the year,” by the way (more on that later)–I list a few new year’s resolutions for tax policy (emphasis and brief descriptions added):
[Here are] some New Year’s resolutions for those who make, study, and care about U.S. tax policy: (1) don’t view tax policy in a vacuum [recognize the interaction of tax policy with the rest of the federal budget and government's role in general]; (2) plan ahead for expiring provisions [look ahead to what's coming due in the next year, and start the policy debates and analysis now rather than in the 11th hour]; (3) accurately analyze short-term versus longer-term economic effects [how are the considered policies helpful or harmful to the economic goals of highest priority?]; (4) set revenue targets and stick to them [use the budget process and budget committees to bring tax policy into the deficit reduction effort]; (5) treat tax expenditures more like expenditures [recognize they're more like spending-side subsidies than simple tax cuts, and scrutinize them to evaluate whether their benefits are worth their costs]; (6) don’t be hypocritical about fiscal responsibility [don't fuss over the small-change items while giving a huge pass to the big-ticket ones]; (7) don’t be so afraid to agree with the other side [there's huge bipartisan common ground on goals for tax and fiscal reform if policymakers would only stop picking fights]; and (8) get specific about good tax policy [study, analyze, and better promote the specific tax policies that experts recognize as economically smart so that policymakers are forced to notice and respond].
Note that this list is more broadly applicable to fiscal policy–tax and spending–more generally, but I was writing for Tax Notes, of course.
The biggest item on this year’s expiring tax provisions list is of course (and yet again) the Bush tax cuts–or as I sometimes refer to them, the Bush/Obama tax cuts. Who knows, if policymakers keep doing the same old thing with them, by next year they could become the “Bush/Obama/Romney [or Santorum or Gingrich or Paul]” tax cuts!
My Tax Notes column reprinted the CBO table above, just to highlight the point that these expiring tax cuts–just the ones set to expire by the end of this year–are worth $4 to $5 trillion over the next ten years, without interest costs. (Remember the “go big” goal?)
Happy New Year to my EconomistMom readers! More from me later this week.
In this Sunday, Dec. 18, 2011, photo provided by NBC News, Speaker of the House, Rep. John Boehner, R-Ohio, appears on NBC's "Meet the Press" in Washington. House Republicans said Sunday they oppose a bipartisan, Senate-approved bill that extends a payroll tax cut and jobless benefits for just two months and said congressional bargainers need to write a new version lasting a longer time. Lim Rogers argues that Congress' inablility to solve such matters are a major cause of its deep unpopularity. (William B. Plowman/AP/NBC News/File)
Congress has its most disappointing year ever
The Washington Post’s Chris Cillizza stated the obvious in Sunday’s Washington Post: “Congress is unpopular.” And deservedly so, because as Chris explains (in print but also in a nice video on that web page):
Saying that Congress is unpopular is kind of like saying that water is wet or that big-time college football is corrupt. It’s so obvious as to be assumed. And yet, in 2011 Congress managed to underperform even the low regard in which the American people hold it.
It wasn’t just that lawmakers didn’t do much in 2011. It was that they didn’t do much in a year in which the economy continued to struggle, the nation’s collective anxiety soared and, for the first time in modern memory, our fiscal foundations seemed genuinely shaky.
The mismatch between the bigness of the country’s problems and the smallness of Congress drove the institution’s approval ratings down to used-car-dealer (or even journalist) levels.
Chris goes on to boil down the major failures of Congress this year to three areas: (1) the budget “deal” in the spring; (2) the debt-ceiling “debate” in the summer; and (3) the (not so) “supercommittee” in the fall. From my perspective, in all three cases: (1) the Obama Administration led by talking about the need for a “balanced” approach to deficit reduction that would involve both revenue increases and spending cuts (their “opening bid” effectively representing the compromise position they hoped to ultimately reach); (2) Republican leaders took a hard line position (pretty much “bullying”) on their Grover-mandated “no new taxes” stance; and (3) the Democrats in Congress and the Administration then cried “no fair, you mean bullies!”–but ultimately caved in and agreed to spending cuts only.
And now it’s gotten so bad that the two sides can’t even agree on passing a deficit-financed tax cut, the only kind of policy that we’ve seen them have no trouble agreeing on over the past, um, decade or so. House Speaker John Boehner explains that the Senate-passed two-month (only) extension of the payroll tax cut does not provide Americans with the kind of “certainty” they need. He’s right that the temporary extension is just another installment of kicking the can down the road, but Americans are very used to that kicking of the can. I think Americans are more freaked out about the potential that Congress won’t even manage to kick the can–that they’ll miss it all together while they bicker for bickering sake–and we’ll all end up flat on our assets (and the body part that sounds like that).
(Hence, the Charlie Brown cartoon; just substitute “football” for “can.”)
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