You Only Get One Main Point: Choosing between Low Taxes and a Low Deficit

You only get one main point. This is the first thing that I tell my Freshman Composition students every semester. They can make several arguments in their papers, but only one of them can be the main point--everything else has to somehow be subordinate. This is not just a silly little rule for English class. It is how reality works. Only one thing can be most important; that’s what “most important” means.

Most college freshman, I am happy to report, eventually get the message.  Most congressional freshmen, on the other hand, do not. And this failure to understand how reality works has brought thelargest economy in the world to the brink of fiscal disaster.

Letme be more specific. The current Tea Party Freshmen have come into office intent on advancing two policy positions: 1) that we must reduce the out-of-control federal deficit; and 2) that we must not, under any circumstances, increase taxes. Bully for them. Both are legitimate political goals that reasonable people could assert as a priority.They can both be important. They can both be really, really important. But, as they are not identical, they cannot both be most important. 

Information from the Congressional Budget Office, as represented in the chart on the left, makes it very clear that the Bush tax cuts (which the Republicans have prevented fromexpiring) have been the greatest single contributor to deficit increases since2002.

This does not mean that tax cuts are bad. That is a statement of value. It means that tax cuts produce deficits. This is a mathematical fact. A deficit is simply the difference between what you take in and what you pay out. There are two ways to increase it: taking in less or paying out more. There are, similarly, two ways to decrease it: taking in more or paying out less. To someone whose “main point” is lowering the deficit, both options (tax increases and spending cuts) should be identical, as they both have exactly the same effect on the deficit.

If, on the other hand, you believe that cutting taxes (or not raising taxes, which is logically the same thing) is the most important thing, then you must accept the possibility ofhigher deficits. Even if you believe that the tax cuts will eventually stimulate the economy and produce more revenue, you still have to accept higher deficits in the immediate future—in exactly the same way that somebody who believes that spending increases will stimulate the economy has to accept higher deficits in the immediate future.

You can do both (cut taxesand decrease the deficit), but you can’t do both all the time, and, sometimes you will have to choose between doing one or doing the other. 

It is fairly obvious from the negotiations that, for the new Tea Party freshmen, lowering (or not raising) taxes is more important than cutting the deficit. All of them, for example, have signed a pledge that they will never, under any circumstances, vote to raise taxes; they have signed no such pledge about the deficit. And when presented with a plan that would dramatically decrease the deficit with spending cuts and tax increases, they rejected it.

And let’s be very clear about this: the action that many Congressional Republicans are contemplating—allowing the US to temporarily default on its debt—would increase the deficit more than anything we could possibly do; it would drive our bond rating down, our interest rates up, and ensure that more of our taxpayer’s money would have to be spent paying interest on the current debt. From any standard of fiscal responsibility, voluntarily accepting higher interest rates (which is exactly what defaulting means) is stupid.

The actions show what therhetoric does not. The “main point” of the Congressional Republican Caucus—and especiallyof the Tea Party Freshmen—is “don’t raise taxes.” It is not “reduce the deficit.”  

Making a Liar out of Madison: The “McConnell Plan” and the Separation of Powers

“It will not be denied, that power is of an encroaching nature, and that it ought to be effectually restrained from passing the limits assigned to it.”— James Madison, Federalist 48

          Over the last few weeks of budget negotiations, we have seen partisan bickering raised to an art form. We have seen factionalism within one major party destroy a potential compromise and demagoguery from the other party destroy almost any hope of a negotiated settlement. We have seen legislators use their power over government borrowing to press for unreasonable concessions from the President, and we have seen a President use the threat of a veto to thwart the will of the people, as expressed in the most recent Congressional elections. 

         We have, in other words, seen the government work exactly as the Founders designed it.

          Government is supposed to be messy. It was designed to be contentious and inefficient. One of the clearest things that comes through in the Federalist Papers is that we are supposed to have a hard time changing big stuff. This is because the Constitutional design sets different interests against each other in an infinite variety of combinations, requiring constant negotiation, revision, and compromise. Madison especially believed that power had to be diffused through a very elaborate system as a check on the natural ambitions of human beings:

 Ambition must be made to counteract ambition. The interest of the man must be connected with the constitutional rights of the place. It may be a reflection on human nature, that such devices should be necessary to control the abuses of government. But what is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. (Federalist #51)

          Madison’s gist here—which became a central design element of the Constitution—is that power will always seek more power, and that pretty much everybody in any branch of government can be counted on to want to increase their own power at the expense of others. The entire Constitutional system is built around this assumption.

          This means that the system can handle any amount of partisan bickering and obstructionism. That's what it was built for. What it cannot handle, however, is one branch voluntarily giving up power to another branch because it fears the political consequences of exercising that power. The way the system is designed, you are supposed to want more power than you have, but you absolutely have to be willing to exercise the power that you've got. Otherwise, whoever is willing to take responsibilities that nobody else wants will end up with the power as well and have a clear path to dictatorship.
          The current Congress, however, appears more than willing to protect Americans from its own failure to govern by transferring to the executive branch the responsibility (and therefore the power) to make politically difficult decisions. We saw this last month in the vote to condemn the US mission in Libya (the symbolic vote) while, at the same time, caving completely on the issue of paying for it (the meaningful vote). As a result, the mission in Libya continues, and the executive power to commit troops without a Congressional declaration of war remains unchallenged. 
          While Congress frets and fumes about the War Powers Resolution, nobody has ever pursued a lawsuit about it long enough to let the courts weigh in on its Constitutionality. Nobody wants a clear Supreme Court victory giving Congress back its authority to declare war would--least of all the members of Congress, who would then have to start exercising the tremendous responsibility of doing so. Better to take a purely symbolic vote against the action in Libya and then abjectly refuse to take responsibility for that belief by actually doing something about it. 

          Given this dynamic, nobody should be surprised about Mitch McConnell’s plan to prevent America from defaulting on its debts and triggering another global financial crisis. The essence of the plan is simple: Congress transfers the responsibility for the debt limit to the President and gives itself a veto only if 2/3 of the members of both houses can agree (which, of course, they never will). The debt ceiling gets raised, America keeps its AAA bond rating, Obama takes the heat, and the Republicans can faithfully report back to their core constituents that they “voted against raising the debt ceiling”--even thought they will have done nothing of the sort. 

          The plan is good politics, and I suspect that it, or something very similar, will win the day. But it is bad statecraft. It represents yet one more legislative concession of power to the executive branch, not because the President wants the power, but because the Congress does not want the responsibility. And that is a very bad reason to make a liar out of Madison.