Speaker of the House John Boehner (R-OH) threw a new twist into the debate over the so-called “fiscal cliff” today, announcing that he’ll move forward with a vote to allow the Bush tax cuts on income in excess of $1 million to expire. That’s a step back from President Obama’s latest proposal to raise taxes on income above $400,000, which was a step back from his previous threshold of $250,000.
Boehner already said that the president’s latest offer “cannot possibly be considered balanced.” The “balance” complaint is one Republican lawmakers have lambasted the White House with throughout the negotiations: Boehner raised it with the President’s mix of spending cuts and tax increases multiple times last week, as did Senate Minority Leader Mitch McConnell (R-KY).
But that complaint treats the current fiscal cliff debate as if it’s occurring in a vacuum. Since the Republicans took over the House at the end of 2010, multiple rounds of spending cuts have already occurred. Between the budget deal in the spring of 2011 to avert a government shutdown, and the Budget Control Act to avert the debt ceiling crisis later that year, spending for the next decade has already been cut by $1.5 trillion, according to a round-up of the numbers by the Center On Budget and Policy Priorities.
Obama’s offer yesterday evening would raise $1.3 trillion in new revenue over the next ten years. It would also cut spending by $930 billion over the same time period through spending reductions and a recalculation of Social Security benefits. Add it all up and it comes to $2.4 trillion in spending cuts versus $1.3 trillion in new tax revenue. So yes, decidedly unbalanced, but not in the way Boehner implies.
And it doesn’t end there. Deficit reductions mean less debt, which means less interest payments on the debt. The above numbers exclude those savings. Including them adds roughly another $500 billion in savings, bringing the “spending cuts” side of the ledger to nearly triple the “tax revenue” side.
Even if Obama’s offer from last night were passed immediately in all its particulars, the final result for the country’s deficit reduction efforts over the last two years would still be grossly skewed in the GOP’s favor. Boehner’s latest gambit merely adds insult to injury.