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Budget Cuts and the Pledge

By Matthew Yglesias on September 28, 2010 at 5:29 pm

"Budget Cuts and the Pledge"

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I linked last week to CAP’s report on options for achieving “primary balance” of the federal budget exclusively through taxes, and wondered if conservatives actually thought these kind of cuts were good ideas. It turns out that one error I made in my assessment was failing to account for the fact that the scope of the reports cuts assumes that the White House will get its way on tax cuts, so in order to cut enough in a manner consistent with conservative tax policy you’d actually need bigger cuts.

Josh Barro takes the challenge on in a new column where he “highlight[s] three areas where I don’t believe the report has identified as many cuts as it could have: Medicare, military employee compensation, and tax expenditures.”

The column is worth a read, but I do wish he’d mentioned the Pledge to America in this context, since the pledge calls for “common-sense exceptions for seniors, veterans, and our troops” when talking about House Republicans’ desire for spending cuts. The CAP 100% cut scenario, it’s worth noting, already entails some small Social Security cuts and pretty drastic defense cuts that don’t involve military employee compensation. It’s also conventional among Republican politicians to regard proposed decreases in tax expenditures as tax hikes.

Which is just to say that Barro’s personal views aside, it’s a huge error to characterize the dispute in contemporary politics as a big fight about “spending.” There’s a huge gap between where the Obama administration wants to have taxes (somewhat lower than necessary to pay for the spending it favors) and where the GOP leadership wants to have taxes (much lower than necessary to pay for the spending it favors). There are also disputes about spending levels on specific things—Republicans would spend much less on the poor and on salaries for people who staff regulatory agencies. But to balance the budget, at either the Obama or the GOP level of taxation, would require spending cuts that Republicans don’t favor.

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