The stories you want. The opinions that matter.
No, thanks
Tag: deficit spending
Republicans Launch Attack On 'Imaginary' Version Of Build Back Better Bill

Republicans Launch Attack On 'Imaginary' Version Of Build Back Better Bill

Congressional Republicans are warning that President Joe Biden's $1.75 trillion Build Back Better plan could cost a lot more — if it contained a lot of provisions that it does not contain.

Rather than explain their opposition to what's in the popular climate and caregiving infrastructure package, they are instead attacking a nonexistent proposal to spend trillions of dollars more.

On Friday, the nonpartisan Congressional Budget Office and Joint Committee on Taxation released an estimate of what it called "a modified version of H.R. 5376, the Build Back Better Act, that would make various policies permanent rather than temporary

."The budget office took provisions of the actual bill, such as the child tax credit and Medicaid expansion, and assessed how much more it would cost if each were to be extended for all time. Doing so would make the ten-year $1.75 trillion plan into a $4.9 trillion bill and would require additional revenue or deficit spending, the budget office found.

GOP lawmakers seized on the CBO's theoretical projections to falsely assert that the numbers reflected the real price of the Build Back Better spending package.

"The true cost of the bill has more than doubled and the effect on the deficit is eightfold," argued Sen. Lindsey Graham (R-SC), who sits on the Senate Budget Committee.

"Today’s CBO score exposes the budget gimmicks Democrats have been using to hide the true cost of their tax & spending plan," wrote Rep. Jason Smith (R-MO), the top Republican on the House Budget Committee. "CBO has confirmed their bill spends $4.9 trillion and adds $3 trillion to the debt – trillions more than Democrats claimed."

"The Congressional Budget Office found that the actual cost of Biden's spending bill is $3 TRILLION in new deficit spending," claimed Sen. Tom Cotton (R-AR).

"On the same day news broke that inflation has hit a nearly 40-year high, the CBO announces the true cost of the #BuildBackBroke agenda," said Rep. Maria Elvira Salazar (R-FL). "$3 TRILLION. Americans can't afford Washington's spending problems."

In a press release, House Speaker Nancy Pelosi (D-CA) mocked Graham and his GOP colleagues for hyping the "CBO score of an imaginary bill."

"Congress and President Biden have made clear: any future extensions of the life-changing provisions of Build Back Better will be fully paid for, as they are today," Pelosi said in a statement.

Graham and Smith requested the analysis last month, demanding that it be completed before the House voted on the package, but Democrats passed the package nonetheless. The resolution now waits for a vote in the Senate.

Published with permission of The American Independent Foundation.

Right Now, Fiscal Restraint Is The Worst Folly

Right Now, Fiscal Restraint Is The Worst Folly

Fiscal discipline was once a durable American practice. But in the 1940s, it went out the window. The federal government embarked on a sudden, unprecedented binge of borrowing that put the nation in hock up to its ears.

From 1940 to 1945, federal spending rose tenfold. The national debt increased sixfold. The public would have to shoulder the burden of paying down that debt for decades to come.

There was, however, a good excuse for this gross budgetary excess: World War II. For a government, as with a person, there is usually no difference between being frugal and being wise. But when the nation’s survival is at stake, the risks of underspending are far greater than the risks of overspending.

A similar imperative exists today, as the new coronavirus endangers lives and causes economic disruption on a scale not seen since — well, since World War II. Last year, the federal budget deficit soared to nearly $1 trillion, at a time of sustained economic growth and prosperity. It was an atrocious figure, representing the latest fiscal failure by our political leaders.

But the spending package forged by Congress and the president to address the fallout of the pandemic will add up to more than double that amount, pushing overall spending to levels never imagined just weeks ago. The rescue plan is probably only the first of a series of huge spending bills meant to reduce the devastation from a locked-down economy.

For more years than I care to remember, under both Democratic and Republican presidents, I have been a consistent voice — OK, an insufferable scold — on the need for a thrifty and responsible governmental budget policy. I have stressed the importance of living within our means, paying the full cost of what we demand of our government and not piling needless obligations on future generations. There are many good moments for fiscal restraint. This is not one of them.

On the contrary, this is a moment when fiscal restraint would be the very definition of a false economy. In 1942, it would have been lunacy to worry about the cost of building up U.S. military capacity as rapidly as possible. The potential cost of not doing it, after all, would have been cataclysmic.

Today, we face enormous dangers. One is that millions of Americans thrown out of work or otherwise deprived of income will be unable to pay their bills, put food on the table or keep their homes. Refusing to help them through this crisis, which came about for reasons beyond their control, would exact a horrific human toll. It would also create general chaos that would stymie economic recovery for months if not years.

Likewise with businesses. In the absence of prompt federal aid, a wave of bankruptcies could wipe out companies that were healthy and profitable before — and have every prospect of being healthy and profitable afterward. The businesses would be gone, and so would the jobs they provided. People and companies desperately need a bridge across this troubled water.

Yes, the necessary measures will be shockingly expensive. Yes, they will have to be paid for with borrowed funds. Yes, they will enlarge a national debt that was already in the neighborhood of $24 trillion.

But the alternatives would be more costly yet. Replacing the old roof on your house sounds expensive until you compare it to the price of your home being wrecked in a storm because you didn’t replace the roof. New tires cost money, but bald ones can be fatal.

We should think of these federal outlays not as expenditures but investments. They are an essential recourse to protect our long-run interests.

How could we afford all this new debt? Through the robust revenue-generating economic activity that will resume if we successfully navigate the crisis. The larger debt burden will be easier to bear in the long run than a smaller debt would be if we let a brief, severe downturn become a prolonged depression.

Debts have to repaid with dollars, and dollars are something the Federal Reserve can create in any quantity needed. The worst case is that we will have to endure an eventual spell of inflation, which would be far preferable to an immediate and total economic collapse.

In most cases, our politicians deserve condemnation for spending money with wild abandon. In this moment, it’s the best thing they can do.

Steve Chapman blogs at http://www.chicagotribune.com/news/opinion/chapman. Follow him on Twitter @SteveChapman13 or at https://www.facebook.com/stevechapman13. To find out more about Steve Chapman and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

Can America Stand Rand? Cranking Up His ‘Libertarian’ Campaign

Can America Stand Rand? Cranking Up His ‘Libertarian’ Campaign

Platitudes typically litter the announcement speech of every aspiring president, and Rand Paul’s address in Louisville today was no exception. “We have come to take our country back,” he thundered—or tried to thunder—“from the special interests that use Washington at their personal piggy bank.”

Exactly what those special interests might be, he neglected to say — although they probably don’t include the oil or coal lobbies he tends to favor. He went on to rant against “both parties” and “the political system,” not to mention “big government,” deficit spending, and the federal debt. Naturally he prefers “small government” because “the love of liberty pulses in my veins.”

Yet Paul delivered these encrusted clichés with impressive energy, to an enthusiastic crowd featuring enough youthful and minority faces sprinkled among the Tea Party types to lend a touch of credibility to claims that he is a “different kind of Republican.” Speaking about urban poverty and education, the Kentucky Republican even name-checked Dr. Martin Luther King, Jr. — a gesture that too many elected officials in his party, especially from the South, still find difficult. (His father Ron Paul, watching from the audience, may have stifled a chuckle, recalling how his racist newsletters regularly excoriated the late civil rights leader as a “pro-communist philanderer” and worse, while blasting Ronald Reagan for signing the bill that made King’s birthday a national holiday.)

Appealing to younger and minority voters, Paul wisely emphasized his ideas about cutting back the machinery of surveillance and incarceration. Likewise, he kept the required paeans to economic “freedom” sufficiently vague to avoid alienating potential supporters, like students who might not appreciate his hostility to federal loans and grants, and families whose survival depends on food stamps and unemployment benefits that he would slash.

The upside of a Paul campaign may be that his dissenting perspective on issues such as Iran, Cuba, and the surveillance state brings a small degree of sanity to the Republican primary debate. Although he parroted much nonsense about the Obama administration’s foreign policy, he dared to say that the goal of diplomacy “should be and always is peace, not war.”

Equally beneficial would be a frank discussion of the libertarian delusions that underlie his economic platform – and the real effects that such policies would have on American communities, families, and workers.Paul still hates the auto bailout, although killing it would have cost another million jobs. While he rails against deficit spending and Obama’s economic stimulus, the clear consensus is that unemployment would have soared without those measures. No doubt he agreed with his father’s repeated warnings that government spending would lead to “hyperinflation” and depression, but we have seen precisely the opposite: a revived economy, recovering employment, and inflation that remains too low to worry any sane person.

Among Paul’s easiest targets today was the IRS, which he promises to diminish or even abolish with his favorite “new idea,” a flat tax. That was a fresh proposal, perhaps, back when right-wing academics Robert Hall and Alvin Rabushka unveiled it in a 1983 book titled Low Tax, Simple Tax, Flat Tax. There is no reason to believe that Rand Paul’s flat tax would differ significantly from theirs in design or impact; namely, to worsen inequality, raising the burden on the poor and middle class while benefiting the very rich.

Mocking the federal proclivity to spend more than the IRS collects, Paul chortled today, “Isn’t $3 trillion enough?” But while he promises to “balance” the budget, his 17 percent flat tax wouldn’t collect even that amount — which means enormous cuts in every budget sector, from education and infrastructure to defense.

Authors Hall and Rabushka described their flat tax as “a tremendous boon to the economic elite” and noted, candidly, “it is an obvious mathematical law that lower taxes on the successful will have to be made up by higher taxes on average people.” We shall see whether Paul is as honest as the authors of his tax plan.

Photo: Gage Skidmore via Flickr

Deficit Reduction Drops As A Public Priority, New Poll Shows

Deficit Reduction Drops As A Public Priority, New Poll Shows

David Lauter, Tribune Washington Bureau

WASHINGTON — For the first time since President Obama took office, reducing the federal deficit has slipped as a priority for most Americans, particularly his fellow Democrats, according to a new in-depth study of public attitudes.

That shift corresponds with the president’s view. In his State of the Union speech Tuesday night, aides say Obama is likely to point to the rapid shrinking of the deficit, particularly over the last year, and suggest that other agenda items, such as improving education and investing in scientific research and the nation’s roads and bridges, should take a higher priority.

In the first quarter of the government’s current budget year, the deficit was 40 percent lower than in the same period a year earlier, and many economists think that for at least the current year, a slightly higher deficit would be better for the economy.

Any call to put deficit reduction on a back burner likely will bring a favorable reaction from Democrats, judging by new data from the Pew Research Center. Fewer than half of Democrats now see further deficit cutting as a top priority, a sharp drop from last year, Pew’s annual survey of public priorities showed. Deficit reduction now ranks behind improving education, strengthening Social Security and protecting the environment as a priority for Democrats.

But as with so many other issues, a widening partisan gap divides self-identified Democrats and Republicans on the deficit issue. Fully 80 percent of Republicans rate further deficit reduction as a top priority, essentially tying it for first place, along with combating terrorism, on their priority list.

The differing views of the deficit have had a clear impact on Congress. Republican lawmakers, for example, have insisted that any move to extend unemployment benefits for people who have been jobless for more than 26 weeks must be paid with cuts elsewhere in the government, rather than added to the deficit. Democrats have proposed offsetting the higher spending this year with cuts that would not take effect for several years down the road.

On both sides of the partisan divide, strengthening the economy remains high on the priority list and has been the top subject for the public overall since 2008. Improving the outlook for jobs and combating terrorism are two other priorities that garner broad public agreement.

By contrast, the gap between Democrats and Republicans over the importance of reducing the deficit is the largest in 20 years of Pew polling on the issue. Similarly large gaps exist on several other major subjects, including protecting the environment, “dealing with the problems of the poor and needy” and improving education, all of which Democrats rank much higher than Republicans, and “strengthening the U.S. military,” which is a top priority for the GOP, but not Democrats.

The percentage of Republicans who see helping the poor as a top issue has declined sharply, with just under one-third rating it as a chief priority. Almost half of Republicans rated it a top priority a year ago. Among Democrats, two-thirds rate the problems of the poor as a top priority.

On most subjects, the views of self-identified independents fall roughly in between those of Republicans and Democrats. But overall, the independents’ list of top priorities more closely resembles that of Democrats.

Two other issues that Obama is likely to mention in his State of the Union speech — global warming and international trade — remain more niche concerns, cited by fewer than one-third of the public as a top priority. Global warming is listed as a top issue by 42 percent of Democrats, but only 14 percent of Republicans.

As Obama prepares to lay out his own priorities, he continues to labor with a tepid level of public approval: 43 percent approve of his performance in office and 49 percent disapprove. Those figures are largely unchanged from last month but slightly better than in November.

The president continues to enjoy stronger marks on his personal favorability. Just over half the public, 51 percent, say they have a favorable impression of him, compared with 45 percent who view him unfavorably — ratings that are largely where they’ve been for most of the last two years.

But there, too, the polarization is striking. Only 8 percent of people who identified themselves as conservative Republicans said they had a favorable view of Obama, compared to 88 percent who see him unfavorably.

First lady Michelle Obama enjoys much broader popularity, with 68 percent seeing her positively and 24 percent negatively. Conservative Republicans hold a negative view of her, 29 percent to 56
percent, although Republicans overall are closely split, with 42 percent favorable and 47 percent unfavorable.

The public’s view of the two parties gives Democrats several advantages, but not across the board.

Just over half the public, 52 percent, say the Democrats are the party more willing to work with the other side, compared with just over one-quarter, 27 percent, who give that nod to the Republicans. By similar margins, the public gives the edge to Democrats as the party more concerned “with the needs of people like me” — 52 percent to 32 percent — and less “extreme in its positions” — 54 percent-35 percent. By 47 percent-30 percent, the public sees Republicans as “more influenced by lobbyists.”

On issues facing the country, Democrats get a nod from the public as best for handling health care — 45 percent-37 percent, an improvement since September — and dealing with the problems of poverty, 46 percent-33 percent.

Republicans have an edge on dealing with the deficit, 45 percent-35 percent.

The public rates the two parties roughly even on dealing with the economy, taxes and immigration.

One other piece of public wisdom: By a large margin, Americans don’t expect relations between the parties to improve any time soon. In the survey, six in 10 say they expect partisan relations to stay about the same this year, one in five expect them get worse, and only about one in six expect an improvement.

The Pew survey was conducted January 15 through January 19 among a national sample of 1,504 adults. The margin of error is plus or minus 2.9 percentage points.

Photo: 401(K) 2012 via Flickr