The bi-partisan “Gang of Six” senators have been flooding the airwaves to announce they have their own deficit reduction plan under construction. The plan is said to include both “tax reform” and significant budget cuts. Democrat Mark Warner of Virginia appeared on Face the Nation Sunday on CBS, and said the “tax reform” in question would be more concerned with removing tax deductions than imposing higher tax rates, specifically mentioning the deductions for charitable donations and home mortgages.
May your morning be brightened by a good laugh at the notion that a “deficit reduction plan” designed with input from Democrats would not include huge tax increases. The Wall Street Journal reports that Erskine Bowles – co-chairman of the last White House deficit reduction panel, which President Obama completely ignored – told the laughable “No Labels” group that “35 to 40” additional senators would back the Gang of Six proposal over Paul Ryan’s “Path to Prosperity” plan. Ryan’s plan just passed the House of Representatives with near-total Republican support, and unanimous Democrat opposition. Does anyone really think 35 or 40 Democrats will eagerly sign on to this new Gang of Six proposal because it ends a few tax deductions?
(Speaking of “No Labels,” they finally did get around to mildly criticizing a Democrat last week, by “throwing a yellow flag” at new DNC chair Debbie Wasserman Schultz, after she called the recent continuing budget resolution a “death trap for seniors.” They have been absolutely silent about President Obama using his budget speech to question the patriotism of Paul Ryan and other fiscal conservatives.)
The Gang of Six says they want to include some sort of Social Security reform in their plan, which is a topic even Paul Ryan’s “Path to Prosperity” budget didn’t touch. Warner described the Ponzi scheme aspect of Social Security on Sunday, admitting there were “16 workers for every one retiree 50 years ago, three workers for every retiree now.” That’s a dramatic break from Democrat orthodoxy, which claims Social Security is funded by a magical lockbox that pumps out limitless amounts of money – rather like the mill of the gods from Finnish mythology, which sits at the bottom of the ocean creating endless quantities of salt. Democrats aren’t supposed to talk about the reality of current workers funding existing retirees.
The Gang of Six also includes Republican Tom Coburn of Oklahoma, who is sufficiently concerned about wasteful government spending to write a book about it every year. This year’s edition of his “Wastebook” found over $11 billion worth of pure nonsense. Coburn’s presence on the Gang of Six bodes well for a serious effort at cutting waste and fraud.
Unfortunately, the Washington Post article begins by describing the Gang of Six plan as “a campaign to convince the public that merely cutting spending will do little to tame the $14 trillion national debt.” Many bad things are lurking within that word “merely.” An increase in Gross Domestic Product would be essential for taming that national debt, and curing the horrible unemployment rates of the Obama years, but somehow I doubt the Gang of Six alternative to “merely cutting spending” will be dramatic cuts in corporate tax rates, or the institution of a flat tax. In fact, the ABC News report on their proposal describes the daring, “politically suicidal” reforms under consideration include “asking business owners to give up tax breaks.”
Here’s some simple math for the Gang of Six to ponder: our government currently takes in over $2 trillion in revenue. Spend less than $2 trillion per year, and the budget will be balanced. Spend a good deal less than $2 trillion, and the national debt will be eliminated over time. This means the government will have to make some of those “sacrifices” politicians are always prattling about, and “make do with less.” Is that so hard to understand?
In addition to Warner and Coburn, the Gang of Six includes Republicans Saxby Chambliss of Georgia and Mike Crapo of Idaho, plus Democrats Kent Conrad of North Dakota and Dick Durbin of Illinois. Conrad is retiring in 2012. One of the reasons he gave for his retirement was to work on balancing the budget. He has a long career of saying responsible things but voting for disastrous Democrat legislation. This is his last chance to match his actions to his words. Since he’s not running for re-election, he should be free to take some political risks… but he also can’t afford to turn off the Democrat electorate in North Dakota, with a tight race in a highly polarized 2012 election season on the table.
You can tell the political climate has shifted when everyone in Washington suddenly has a deficit reduction plan. Now let’s see if all of this talk produces any real action.