Republicans have shredded their credibility in the “fiscal cliff” debate

Eric Cantor

Many Republicans are backing away from their pledge not to raise taxes on constituents as they try to work out a deal on the so-called “fiscal cliff.” During an interview on MSNBC, House Majority Leader Eric Cantor (R-VA) said, “I will tell you when I go to the constituents that have elected, re-elected me it is not about that pledge. It is really about trying to solve problems.”

The Americans for Tax Reform’s Taxpayer Protection Pledge has been much maligned in recent years, and has been a favorite target of the White House and Democrats. They’ll take shots at the pledge, claiming that Republicans are taking marching orders from Grover Norquist, president of ATR. Democrats do this to make Republicans look like they’re beholden to a special interest.

The Taxpayer Protection Pledge simply states that the candidate will “oppose any and all efforts to increase the marginal income tax rates for individuals and/or businesses” and “oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.” Essentially, a candidate or elected official promises not to support a net-tax hike. This pledge is not made to Grover Norquist, Americans for Tax Reform, or Republican leadership in Congress. It’s made to taxpayers inside that candidates district or state.

In typical fashion, Republicans find the Taxpayer Protection Pledge to be a valuable tool in primaries, as candidates use it to show their commitment to fiscal conservative principles. However, when it comes to living up to the commitment they made to voters, many, like Cantor and others, conveniently distance themselves from it in search of a broader fiscal deal, one with which they can live. That seems about as realistic as a unicorn right now.

Last year, Republicans in Congress struck an agreement on $1.2 trillion automatic spending cuts over 10 years in exchange for raising the debt ceiling. This came less than a year after they ran on spending cuts and returning fiscal responsibility to Washington after consecutive $1 trillion budget deficits. They explained that the excessive spending of President Obama had not created jobs as advertised and that the debt being built up posed very real problems to the country.

Today, Republicans are absolutely losing their minds about the very spending cuts to which they agreed. They’re saying that the cuts will cost jobs and hurt economic growth. Folks, this is the exact opposite of what Republicans said when they, rightfully, opposed President Obama’s stimulus plan.

So if Republicans are getting nervous about actually following through on one of their campaign promises, what do you think will happen to spending cuts made in any agreement on the fiscal cliff? If history is any guide, as Nick Gillespie wrote yesterday, those cuts, often touted as part of a “balanced approach,” will not come to pass because real spending rarely declines:

This fiscal cliff is that dreaded Witching Hour come midnight on Jan. 1, 2013 at which the Bush tax rates expire (meaning a reversion to higher rates in place under Bill Clinton), Obama’s payroll tax “holiday” ends, the debt ceiling might need upping (again), and “sequestration” kicks in, thereby cutting $110 billion in 2013’s estimated spending tab (currently assumed to be about $3.8 trillion). The fiscal cliff, we’re told, will be ruinous because our economy - not yet recovered from the recession that ended some time in 2009 - will not be able to withstand higher taxes on low- and middle-income earners (you know who you are) at the same time that the federal government will be forced into draconian “austerity” (also known as nearly 3 percent of anticipated federal spending for 2013).
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Here’s a quick question for the folks earnestly in favor of such a trade-off: How many times between 1980 (when Ronald Reagan was elected) and 2011 (last year for which full data are in) have inflation-adjusted, year-over-year government expenditures declined? That strikes me as a decent indicator of just how serious the federal government can be about restraining spending in recent years. The answer, using constant 2005 dollars and relying on Office of Management and Budget (OMB) tables (see table 1.3)? Four times, in 1987, 1993, 2007, and 2010. At least two of those four years warrant asterisks, too: In 2007, spending was almost exactly flat, and the decline in 2010 mostly had to do with the inability of the federal government to get its shit together and pass a budget.

So why exactly would anyone expect Congress to really cut spending down the road if it has shown essentially no ability to rein in spending in the near term? This is like a variation on the old joke about losing money on every unit sold but making it up in volume. Except it’s not like that at all. Or funny.

Exactly. And sadly, Republicans in Congress have traded just about every shred of credibility they have on fiscal issues for the hope of reaching a deal with the White House. If an agreement is actually reached before the end of the year, there is very little chance that it’s something that will be sit well with fiscal conservatives.

 


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