In a Yahoo News op-ed published today, Senate Minority Leader Mitch McConnell (R-KY) claims that the deal to avert the so-called “fiscal cliff” means that any congressional debate over taxes is “over.” “Predictably, the President is already claiming that his tax hike on the ‘rich’ isn’t enough. I have news for him: the moment that he and virtually every elected Democrat in Washington signed off on the terms of the current arrangement, it was the last word on taxes,” he wrote.
However, the roughly $620 billion in revenue raised from the fiscal cliff deal means that revenue will be roughly 18.5 percent of GDP over the next ten years, nowhere near enough to deal with the extent of the country’s obligations, as Michael Linden and Michael Ettlinger note. In fact, revenue is still going to be far below what would have been raised under two much-ballyhooed bipartisan plans, including one constantly lauded by Republicans:
Both bipartisan plans [Simpson-Bowles and Rivlin-Domenici] agree that we’ll need more revenue than 18.5 percent or 18.8 percent of GDP to substantially close the budget deficit, let alone balance the budget. In fact, the last time we actually balanced the budget—from 1998 to 2001—revenue surpassed 19.5 percent every year, averaged 20 percent of GDP those four years, and topped out at 20.6 percent of GDP in 2001. And that was before the Baby Boom generation began to retire.
President Clinton’s 1993 tax increase — which Republicans said would destroy the economy, but did the opposite — was three times larger than the tax increase in the fiscal cliff deal. President Reagan, meanwhile, “signed no less than four separate tax increases into law that were equal to or larger than yesterday’s fiscal cliff deal.”