BY FRANK HILL
Reprinted from Telemachus.com
Think about the things ‘very conservative’, ‘far right-wing’, ‘ultra-conservatives’ have wanted to achieve in Congress over the past 40 years.
We’ll give you two hints:
– Long-term, permanent lower tax rates.
– Spending cuts in many bloated federal programs.
Just try to remember the headlines in the liberal media, both electronic and in print, whenever Presidents Reagan, Bush 41, Bush 43 or Speaker Newt Gingrich tried to cut taxes or spending since 1980:
‘President Reagan Wants to Pluck The Food Out of Every Baby’s Mouth Across the Nation!’
‘President George W. Bush 43 Seeks to Starve Old People who Depend on the Federal Government with Massive Tax Cuts!’
‘Speaker Newt Gingrich Hates Old People, Poor People, Young People, Puppy Dogs, Baby Seals and Just People In General’
The journalists out there will know what we are talking about. The old saw that ‘proved’ the media is liberal and not supportive of any conservative Republican goes like this:
‘If Jesus was a Democrat, the headlines read: ‘Jesus Walks On Water!” If Jesus was a Republican, the headlines would scream: ‘Jesus Can’t Swim!’
The point is that every true conservative since time immemorial has said they want tax cuts AND spending restraint as a path to smaller government and balanced budgets. The national GOP full of ‘big-spending Republicans’ had their chance to curb spending from 2001-2007 when they held the reins of power in the White House, Senate and the House…and they blew it.
They seemed to have learned their lesson. We’ll see how they perform for the next 5 years or so before we declare that they have ‘seen the light!’ and have come back to their senses.
Well, guess what has happened as of March 1, 2013 under ‘ultra-liberal’, ‘uber left-wing’ ‘huge government spender’ President Barack Obama: Both of these key objectives of right-wing Republicans have been realized
Whether intended or not, the net effect of President Obama’s negotiating skills, or lack thereof, has resulted in legislative victories that Republicans for the past 13 years have only dreamed about.
Let’s look at both in more detail:
I. George Bush 43 and the GOP put the 10-year expiration date on their tax cuts in 2002 for 2 reasons:
A) It comported with generally-accepted CBO time horizons for budget estimation purposes, and
B) The loss of revenue if the tax cuts were made permanent would have been so monstrous that no one would have believed how fiscally irresponsible the Bush Tax Cuts were in the first place.*
Yep. The Bush 43 Administration and the House and Senate GOP were so afraid of the estimated future ‘cost’ in terms of ‘lost tax revenue’ for the long-term, they did not want to propose making them ‘permanent’ in 2002 and 2003.
Think about it. If the ‘terrible’ Bush Tax Cuts of 2002/03 were as horrible as even then-Senator and then-presidential candidate Barack Obama said they were up through his election in 2008 because they reduced federal tax revenue by over $4.6 trillion for 10 years, imagine what those ‘tax collection losses’ would be for the next 10 years after that. Or 20. Or 30. Or 50.
Suffice it to say that the Bush tax cuts may have ‘cost’ the federal treasury $4.6 trillion over the 10 years they were in effect on a ‘temporary’ basis.
However, President Barack Obama signing those ‘terrible’ Bush Tax Cuts into ‘permanent’ law in 2012 means we can expect to see maybe $20 trillion in lower tax revenue collection over the next 20-30 years. The US Treasury would have collected up to $20 trillion more in taxes had President Obama simply let them all expire at the end of 2010 or 2012 and let all tax rates revert back to what they were in the venerated days of ‘Saint President Bill Clinton’.
That decision was all within the purview of President Obama and no one else. He could have simply not signed a law extending them in 2010 or 2012 and poof! tax rates would have all reverted back to Clinton-era rates for every tax-paying citizen.
But he did. And now, 98%+ of all Americans will enjoy lower tax rates…forever, not just for the next 10 years. But ‘forever’.
Republican Presidents going back to when the income tax was passed as a constitutional amendment in 1913 would have all given their eye-teeth to be able to brag about such a permanent legacy: Lower. Taxes. Forever.
II. And now, today, President Obama, whether he miscalculated in his negotiating tactics or just simply didn’t believe he couldn’t browbeat the Republicans in the House into submitting to his will simply because he won a second term last year, has caused the dreaded ‘Sequester’ to be triggered into action.
$85 billion will be somewhat arbitrarily reduced from this year’s fiscal year budgets of many federal agencies. But it won’t deal with any of the cost-drivers and factor causing our fiscal dilemma: rising health care costs.
In future years, this sequester will lower the baselines for future growth by approximately $1.2 trillion. While that might seem like a large number, remember that it is a cumulative number over the next 10 years so there is some compounding of savings from past years plus interest savings costs from debt foregone as a result of not spending this $1.2 trillion.
A 1.2 trillion baseline reduction in spending is simply this: a reduction of 3% of expected future spending which has not been spent yet! How can cutting increased future levels of ‘spending’ that hasn’t even occurred yet cause the ‘Economaggedon’ or the ‘Recessapocalypse’ or the ‘Depressunami’ that President Obama and opponents of the sequester seem to think it will cause in 2013?
$1.2 trillion in future savings in spending is more than we have seen since 1997 when Bill Clinton signed the Balanced Budget Act of 1997 with Newt Gingrich, et.al.
We’ll take it. It is better than nuttin’, right?
If the Spectre of President Ronald Reagan would come visit President Obama in the Lincoln Bedroom one night, he might say something along the lines of one of his most famous movies:
‘Barack, you have truly won not only one huge public policy goal but two now for the Gipper! I sure wish I could have passed permanent tax cuts and cut spending by $1.2 trillion! Keep it up, young man!’
God Bless America!
* Point of clarification from our friend and intrepid ‘inside-the-Beltway’ translator, Roger France: The reason why the Bush Tax Cuts were not made permanent in 2002 was) ‘because they were not voted on in the Senate as stand alone bill, subject to a 60 vote filibuster, but as part of the Budget which only required a simple majority in the Senate. Republicans knew they could not get 60 votes to cut taxes, so they attached it to the Budget Reconciliation bill. I now it’s a bit of inside baseball, but… Yes, the same process used to enact ‘Obamacare.’ What comes around goes around….’
(Still the fact remains that the size of the Bush tax cuts being made permanent in 2002 was so enormous that the GOP had to find another way to pass the tax cuts instead of in a stand-alone bill-editor’s note)
Editor’s Note: Frank Hill is the Director of the Institute for the Public Trust in Charlotte, NC. He is former chief of staff to Congressman Alex McMillan of NC and also served on the staffs of former U.S. Senator Elizabeth Dole and the House Budget Committee.