Sunday, October 10, 2010

A Tea Partier (conditionally) calls for higher taxes

By Rick Morris

Before I delve into the meat of this column, I’m going to bottom-line what that headline is about: I would put my convictions as a spending hawk up against anyone’s, but if the coming GOP resurgence means more of their cowardly borrow-and-spend policies when the country is in crisis, then yes, tax hikes are the lesser evil.

I’d like to start by mentioning a recent column by my good friend Scott Pullins, a tax and spending hawk by anyone’s measure. I was his sidekick as he rose through the ranks to become Ohio College Republican Chairman (before I moved on to my “ideologue, not a partisan” phase of life) back in the day and he’s always been pretty hard-core. As such, there might be many people shocked by his recent endorsement of Ohio Democratic Governor Ted Strickland in his reelection campaign against John Kasich. It’s worth noting that Scott, in his public policy career, has had ample opportunity to observe Kasich’s true colors up close and if he finds him lacking, that’s good enough for me. Having said that, I can’t join him in voting for Strickland; I’ll probably just cast the same protest vote as in every gubernatorial election since 1994 and write in Scott himself! Nothing exemplifies the notion that “a lesser evil is still an evil” like Ohio Republicans.

But Scott’s decision is a perfect example of why you have to scratch the surface a bit when you see something that might be a bit surprising at first glance. Given all that I have written about my opposition to tax hikes over the years, my (qualified) advocacy of one in this column may seem shocking. But with the Republicans poised to take over the House next year and make a huge dent in their Senate deficit, they will have to actually stand for something. I sounded the alarm early on about Dubya’s “compassionate conservatism” because I saw that the Karl Rove pabulum about building a durable majority meant waving the white flag on exploding government once and for all.

What Scott and I have in common above all else is intellectual honesty. Neither of us has ever knowingly defended the indefensible. That’s not to say that we haven’t changed our minds about a few things along the way – I wasn’t born a paleocon – but we don’t subscribe to the bumper-sticker mentality of today’s partisans. As such, I acknowledge, and I would guess that Scott might as well, that Republicans have been a borrow-and-spend party for a few decades now. Certainly, Ronald Reagan’s priorities at the time have been proven correct by the successful end to the Cold War that his defense buildup helped hasten, but even he would have agreed that in a perfect world that we would actually pay for the government we utilized. How do I know that? Because he (reluctantly) closed some tax loopholes and raised some taxes in his first term when the deficit first began to really explode. And as much as I loathed it when George H.W. Bush raised taxes (the move that led me to split away from him once and for all), his policies at least were coherent compared to his runaway-spending son.

This column is predicated on the notion that our nation looms on the precipice like Greece. Our short-term government debt is bad enough; with our long-term obligations set to explode as the Baby Boomers collect Social Security, Medicare and Medicaid in full force, we are absolutely flat-out doomed if we continue on the present course of talking a good game about cutting spending but never actually implementing it.

Of course, to be an elected Republican is to pretend that George W. Bush was a real skinflint who left matters behind in great shape on January 20, 2009. [This sad reality is compounded by Rove’s lingering status as a power broker and the sublimation in his mind of all other priorities to the rehabilitation of his former boss.] Granted, President Obama has taken a bad situation and made it far worse by compounding all of Bush’s spending mistakes ten-fold, but we can’t get anywhere as a country if entities aren’t owning up to their own piece of the blame. The American people are finally focused and engaged on this issue as never before and there’s finally no excuse left for the GOP to play the know-nothing game on fiscal policy. The voters finally can see through such games.

Before I address the choice that seems ahead of us, I would like to address the ideal hierarchy of answers to the debt crisis engulfing our government. I would hope that all sane people could agree that the best solution to getting the government back on its feet would be to cut unnecessary spending, live within its means and have no need of higher taxes – or at the very least, generate needed tax revenue by way of dynamic tax cuts like those on capital gains that actually lead to more tax money coming into the government.

Short of that, though, I would hope that all sane people could then agree that higher taxes – imposed in the least intrusive manner possible, whether by closing existing loopholes or, more likely, instituting a national Value Added Tax (VAT) – would be preferable to falling off the debt cliff. We cannot default on our debt or see it rise to a rate that is unsustainable for future financing. To do so is to put every existing obligation by the federal government at extreme risk. The entire system could fall apart with nothing to replace it.

So, believe me, in my heart of hearts, I want elected Republicans to have the testicular fortitude (TM Mick Foley) to take a hard stand on spending and fix the problem completely “the right way.” This column is geared towards testing whether that is possible, or whether horrible yet necessary measures will be needed to disarm this fiscal time bomb.

I have identified half a trillion dollars of spending – most of it annual spending – that I would like to see eliminated. These are all spending cuts that I personally endorse. The links that accompany each one spell out the proposals as they were created by budget experts.

While my Lounge colleague Nate Noy takes issue – perhaps rightfully so – with my description of these cuts as the “low-hanging fruit,” they do undeniably constitute a first tier of what is possible in terms of restructuring this government. In other words, while these may not be easy, they sure are compared to the heavy lifting that lies ahead with the entitlement programs and as such, they’re perfect for calling the bluff of Republicans who claim to be riding to the rescue. After all, as much as I hate to give credit to the statists, they are right that every time they ask the GOP for specifics on spending cuts, all they get is the old Jackie Gleason “Humina humina” routine.

So here’s my $500 billion that I deem expendable. If the Republican leadership can’t join me on at least half of this, they are hopeless and should wave the white flag on tax policy for the good of the republic.

^ Radical restructuring and cost-savings in the Defense Department – savings of $120 billion annually.

^ Elimination of corporate welfare – savings of $100 billion annually.

^ Radical restructuring at the mammoth HHS department – savings of $81 billion annually.

^ Social Security means-testing of the elderly – cutting out all benefits whatsoever to seniors north of $100,000 – savings of $70 billion annually.

^ Repeal of remaining stimulus infrastructure spending – one-time savings of $48 billion.

^ Eliminate agricultural subsidies – savings of $30 billion annually.

^ Cut elementary and secondary education funding from the Department of Education from $61.5 billion to $40.5 billion – savings of $21 billion annually.

^ Eliminate the HUD community development program and leave that completely to the states – savings of $13 billion annually.

^ Enact Donald Rumsfeld’s suggestion to close 200-300 needless overseas military bases – savings of $12 billion annually.

^ Sell public lands out West to the states to be managed locally – savings of $5 billion annually.

And there’s your 500 bill.

I would want to see the Republicans pick out at least half of these cuts to promote. I would also advocate this proposal to cap federal spending at one percentage point less than the three-year inflation rate. These are the kind of moves that need to be taken to the country, much as the Tories have done in Great Britain.

And if the American people recoil? Well, then it will be time to adapt the lessons of recent foreign policy adventurism at home. The neocons taught us the hard way, at great cost in terms of blood and treasure, that we cannot force good government on others abroad. If those of us who understand that it is rational to avoid higher taxes if at all possible are proven to be in the minority, then we must accept that ours is a constitutional republic and we must deliver and fund the Big Government that our fellow citizens demand.

That doesn’t mean that wise Americans should give up the fight in the long term, and certainly, we reserve the right to point out the costs that accompany this unfortunate decision. It is entirely possible that the bitter medicine of higher taxes – which, as sane people know, even if aimed at higher-income people will have deleterious effects for many beyond that in terms of consumer spending – may be just the tonic necessary to wake the American people up once and for all about how the federal behemoth needs to be contained.

But that step is secondary. First, this nation must choose once and for all the kind of government we really want. Republicans, armed with a list of cuts like the ones listed above, should muster the courage for once in their lives to wage a fight about the scope of government. But if they lose, or more likely, cannot even bring themselves to do something they deem so poll-unfriendly in the first place, then they should at least be decent enough to admit the consequences and get on with the business of trying to settle our debt by all means necessary.

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