Remember, We’ve Already Cut a Bunch of Spending

October 25th, 2012 at 5:55 am

David Wessel has an interesting piece up at the WSJ on a group of CEOs urging Congress to avoid the fiscal cliff and get on a sustainable budget path with a plan that includes both spending cuts and tax increases.

That’s obviously a big theme around here and is common sense which I hear from pretty much everyone who hasn’t come under the spell of Grover Norquist.  Unfortunately, it’s a spell that’s been cast on almost every Republican in the Congress as well as Gov. Romney.

But there’s was one important point omitted from the piece.   When writing about a balanced approach to fiscal policy, one that involves both spending cuts and new revenues, it should be noted that Congress and the President have actually already cut $1.5 trillion ($1.7t including interest savings) in discretionary spending, not including war costs, over the next decade.

That’s 70% of the Simpson-Bowles discretionary spending cuts!  Without that point, I suspect many readers will think we need to start with spending cuts and then we’ll talk taxes.  In fact, Grover himself is cited in the piece as follows:

“When bipartisan deals are struck promising to cut spending and raise taxes, the spending cuts don’t materialize but the tax hikes do.”

But Grover–dude!–a big start on the spending cuts has already materialized…so it’s tax revenue time, right?  Grover?…anyone…?

Print Friendly, PDF & Email

10 comments in reply to "Remember, We’ve Already Cut a Bunch of Spending"

  1. foosion says:

    The WSJ article is for subscribers only and I don’t subscribe.

    If we do nothing, the deficit gets cut by a substantial amount, as the scheduled spending cuts occur and the Bush tax cuts expire. As far as I can tell, all of the deficit reduction plans under discussion cut the deficit far less than has already been baked in. Most of current discussion is an attempt to obscure this fact, usually with the goal of avoiding tax increases on the best off and also avoiding cuts to powerful military interests.

    Cutting the deficit short term is highly counter-productive, as has been discussed at great length here (and hasn’t penetrated to the political class, the pundit class or the population). Fiscal cliff means the economy slows, not the deficit increases. This is another item that doesn’t seem to have penetrated.

  2. Fred Donaldson says:

    Your last two posts have mentioned Bowles-Simpson – a plan proposed by the two co-chairs of a commission that could not reach agreement under the terms of its creators.

    There are other plans, even a Progressive one to reduce the deficit, which you might examine:

    This manages the goal without destroying the elderly middle class of tomorrow in the name of tax “fairness” for the mighty.

    • Jared Bernstein says:

      I hear you–I’m not a big BS [sic] booster. I’m especially critical of the large Soc Sec cuts you note. But I tend to reference it as the coin of the realm, particularly as too many people don’t even know what’s really in there.

  3. Bill Gatliff says:

    Somehow, our politicians are so clever that they decouple the tax hikes from the spending cuts and/or tax cuts from spending hikes, so that they can vote on one but not the other. Why can we not accept that approving one is an explicit obligation for the other? All of this budget hand-waving really needs to stop.

    We let them do it, of course. They pander to us, and we have tolerated it.

  4. Cmon says:

    “When bipartisan deals are struck promising to cut spending and raise taxes, the spending cuts don’t materialize but the tax hikes do.”

    It’s amazing that people allow Grover and many other conservatives to continue to get away with this lie. It’s never been true and especially not in the 90s.

  5. Bob Wyman says:

    Norquist was not phased by the CEOs’ letter. He spoke about it yesterday at one of Patricia Duff’s “Common Good” luncheons in New York City and pointed out that while the CEO’s had called for “increased revenues” they did not specifically call for “increased taxes.” Norquist claimed was that he had no objection to increased “revenues,” which, in his opinion, could be achieved through lower taxes, decreased spending and the increased growth that would result.

    As wrong-headed as ever, Norquist said he sees the CEOs’ “careful choice of wording” as support for his position, not as opposition.

  6. Fred Donaldson says:

    Grover was a student in the 70s at Weston High, a public school that obviously received immense support from taxpayers, as Wikipedia notes:

    “This new high school, which was located near Weston Town Center by the current Weston Public Library, Country & Woodland Elementary Schools, was renowned as the “architectural achievement of the century” by the Boston Herald when it opened in January 1950. The nation’s first million-dollar public building, Weston High School offered resources and technologies never before seen in a public school. Revolutionary architecture and layout of the school allowed for unprecedented new teaching and class organization methods. The building remains in active service as the Field Elementary School, though plans are underway to tear it down and replace it with a new complex on the same lot.

    “In 1961, the current Weston High School was built as one of the most expensive schools in the nation at $8,930,000 (1961 dollars). This building is the fifth public high school in Weston and is designed to be in active service far longer than many contemporary schools, thanks to constant renovation and a high-quality initial design and build.”

    Since Grover’s dad was a vp of Polaroid, I’m somewhat surprised he didn’t attend private school, but probably the local public school, supported by taxpayers, was a better place to go.