Thursday, April 7, 2011

When ideology must bend to common sense

I give Paul Ryan credit; at least he has a plan.

On the other hand, it appears that his plan is, shall we say, a tad ideologically skewed.

You can't turn on the news without hearing it over and over again: we have a massive debt/fiscal crisis, and the "third rails" of politics -- defense spending and entitlements like Social Security and Medicare -- are going to have to be part of any fiscal-responsibility/deficit-reduction plan.

Congressman Ryan's budgetary proposals are a serious attempt to address the problem. The difficulty is that his cuts don't do anything to trim military spending or Social Security and are so draconian in terms of Medicare and Medicaid that the blowback is going to be extreme. They also don't do much about revenue, instead proposing further tax cuts that won't likely help fix the deficit in the long run.

So who else has a proposal to fix the crisis?

Remember the ill-fated Deficit Commission? That panel, led by former senators Erskine Bowles and Alan Simpson came out with a plan a few months back that looks, on the whole, to be more ideologically centrist (and realistic) than Ryan's plainly right-tilted approach.

The Simpson/Bowles proposals involve cuts to all of the aforementioned "third rails" but, in addition to going after all of those areas, where the Simpson/Bowles cuts target Medicare and Medicaid they do so in ways that appear more flexible than the Ryan slashing and burning. Moreover, Simpson/Bowles considers some small/temporary tax increases and a broader reformation/simplification of the tax code that is long overdue.

Ezra Klein did a great piece in his Washington Post/Bloomberg blog urging a (positive) re-look at Simpson/Bowles as a kinder/gentler/fairer/less-ideological alternative to Ryan's plan. I am on board with that, and I think Simpson/Bowles underscores that, while big cuts are absolutely necessary, we can't just cut our way out of this mess.

Indeed, it's in the "small tax increase" area where, I suspect, George Voinovich likely got it right a few months ago, or at least his idea looks pretty damn good in the rearview mirror. You may recall that on his way out the door, generally moderate Republican U.S. Senator George Voinovich bucked both his party and the other one, and, when it came time to debate whether we should be extending the Bush tax cuts for everyone (the Repub proposal) or for everyone except those individuals making more than $200k annually (the Dem plan), Voinovich told us all to grow up and let the income-tax cuts expire for everyone.

I am not a fan of tax increases. In fact, my generally libertarian-ish thoughts make me a fan of tax cuts as a growth-stimulator, but, as I have said before, the Bush income-tax cuts in the middle of a war were unprecedented and reckless from a deficit-explosion standpoint. Just a few months ago when Congress was debating about the two tax-cut-extension plans (continue 'em for everyone vs. soak the "rich" and continue everyone else's), I said that, despite my position against the cuts when they happened, I couldn't see reining them in in the middle of an economic downturn. Now I am beginning to think that Senator Voinovich was right, or at least that, a few months down the line, with the economy doing a little better, it's time to think about a small increase in everyone's taxes as a revenue-generator that is part of a larger deficit-reduction plan like Simpson/Bowles. (However, let's digress just for a moment to be really clear: I still think the estate tax is stupid and I still don't understand the "soak the rich" proposal of just increasing income taxes on a small percentage of people to be anything more than stupid class warfare and yawningly predictable/ineffective "don't raise my taxes, but it's OK to raise his taxes" nonsense).

We need to have the grown-ups in charge right now. Ryan's plan is undoubtedly grown-up, but it is tilted all in one direction, fixing the deficit nearly entirely on the backs of Medicare and Medicaid recipients. Those folks are undoubtedly going to have to share the pain -- see Simpson/Bowles for that -- but a plan needs to look at all the "third rails" of politics, and that necessarily will include military and Social Security cuts as well as likely short-term minor tax increases.

Or at least all of those ideas have to be on the table.

So, congrats to you, Congressman Ryan. I don't love your plan, but maybe it'll steer us into a serious conversation that should have started with Simpson/Bowles. And maybe we can get back to something more like that sensible, centrist proposal.

UPDATE: Check out this link from the New York Times if you want to play deficit-reducer at home. It's very cool, and proof-poitive that this goal can be achieved by spreading the pain around in a way that doesn't engage in class warfare up or down.

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