Most of the fiscal debate sparked by Rep. Paul Ryan’s unveiling his budget proposal Tuesday--with his grave warning that dealing with the deficit is a “moral imperative”--has omitted a couple of key facts about the budget imbalance. To wit that Congress could solve the crisis by doing nothing at all and that current GOP doctrine aims to make the crisis much worse.
The notion that Congress can bring the budget under control by sitting on its hands may seem incredible. But that’s not my conclusion; it’s the judgment of the Congressional Budget Office, about as reliable a fiscal scorekeeper as you’ll find.
As I noted in my column this week, the CBO:
projects the budget deficit will be $1.5 trillion this year, or 9.8 percent of gross domestic product. In order to achieve budget stability and sustainability, according to economists, that figure should be around 3 percent of GDP. But here's the good news: The CBO projects that the deficit will "drop markedly over the next few years as a share of output and average 3.1 percent of GDP from 2014 to 2021." We're saved! And it gets better: "Those projections . . . are based on the assumption that tax and spending policies unfold as specified in current law."
In other words if the laws already on the books are allowed to run their course, the deficit will become sustainable and manageable of its own accord. But of course there’s a hitch: The laws in question include things like the Alternative Minimum Tax, which is scheduled to hit the middle class, and a scheduled cut in Medicare payments. Each year bipartisan majorities adjust the AMT and pass a “doc-fix” to push back the Medicare cuts.
But the budgetary behemoth that goes farthest in preventing the deficit from naturally shrinking to manageable size is the set of tax cuts passed under President Bush and temporarily extended in December, which the GOP seeks to make permanent. Doing so would add roughly $4 trillion to the deficit. [ Check out editorial cartoons about the GOP.]
One can certainly argue the economic merits of letting some or all of the Bush tax cuts expire versus extending them. But to say that dealing with the budget crisis is a “moral imperative” while pushing policies that worsen it is fatuous--or worse. Republicans bray about the $787 billion in stimulus spending as being an unjustifiable budget buster while they simultaneously advocate for a $4 trillion hole in the deficit. Doing so is not the sign of serious concern over the deficit, simply ideological fixation on spending.
My bloleague Anson Kaye noted earlier, the GOP gives every appearance of using concern about the fiscal situation to grind some ideological axes. But it’s in fact worse than that: They are trying to worsen the budget imbalance in an effort to achieve those ideological ends.