"FLASHBACK: Past ‘Grand Bargains’ Relied On Taxes To Reduce The Deficit"
The congressional super committee tasked with cutting $1.5 trillion from the federal deficit over the next 10 years is likely to announce its failure today, and the main reason is that the committee’s six Republicans refused to budge on their support for massive tax cuts for the rich. Democrats would have even accepted the GOP’s paltry concession on revenues — $350 billion from ending deductions — had Republicans not included a permanent extension of the Bush tax cuts for the wealthy, Sen. John Kerry (D-MA) said this morning.
Twenty-four cents out of every dollar saved in Sen. Pat Toomey’s (R-PA) plan that became the primary Republican offer came from tax increases, an even smaller number than proposed in bipartisan plans from other commissions. But while taxes have become the major sticking point between the two parties in their attempts to reach multiple bargains this year, that hasn’t always been the case. Tax increases, in fact, made up large parts of the five “fiscal grand bargains” made during the Reagan, H.W. Bush, and Clinton administrations, the New York Times reports:
In the five fiscal grand bargains of the 1980s and early 1990s, tax increases accounted for an average of 61 cents of every dollar saved. In fact, in President Reagan’s 1982 and 1984 budget-trimming deals, more than 80 percent of deficit reductions came from tax increases. What’s more, the deals passed with majority support from both parties. Mr. Reagan may be remembered as an antitax hero, but he actually raised taxes 11 times over the course of his presidency, all in the name of fiscal responsibility.
Republicans used to rank deficit reduction ahead of curbing taxes, but now the reverse is true.
While Republicans claim to be focused on deficit reduction, their attachment to tax cuts continues to tell a different story. The Bush tax cuts for the wealthy, originally passed in 2003, blew a hole in the federal budget when the GOP offered no plan to pay for them, even though the party predicted at the time that it would pay off the nation’s debt in 10 years. And instead of asking the wealthiest Americans to sacrifice, the GOP has sought to take the knife to an array of programs that help the elderly, the poor, and women, infants, and children in the name of deficit reduction.
The super committee’s lack of a deal isn’t necessarily a “failure,” as economists have warned that forced austerity would only imperil the American economy. But the GOP’s intransigence, tied together by anti-tax activist Grover Norquist, has already led to the first credit downgrade in American history. Now, even as Republicans attempt to lay blame at the feet of Democrats, that anti-tax dogma has prevented the super committee from reaching a deal that Democrats were apparently itching to sign onto.