It’s summer in an election year, and that’s the time for the deficit peacocks to come out of hibernation and strut their feathers, letting everyone know that they care – very much! – about deficits. This is a bipartisan phenomenon. On one side of the aisle, Republicans want to freeze discretionary spending, borrowing an idea from the other side of the aisle, from Claire McCaskill (D-MO). She at least tried to sound reasonably sane, but the impact of her preferred policy would be pretty negative:
Claire McCaskill, a Democrat from Missouri and an outspoken backer of Obama early in the presidential campaign, said she was thrilled to hear the GOP had glommed on to her proposal.
“I think that’s a terrific idea,” she said. “I think if we tried to do massive cutting now, we could be dangerously close to a much more serious recession. But capping growth is exactly what we should be doing.” McCaskill’s measure would cap the growth of domestic spending at one percent.
Actually, Sen. McCaskill, now is the wrong time to freeze spending, too. Macroeconomic policy has begun to trend negative, and we need something to fill the gap in demand. But a similar measure to Sessions-McCaskill (Jeff Sessions is the lead sponsor on the GOP side) got 59 votes earlier in this Congress.
Joining McCaskill in the bevy of Democratic deficit peacocks are 1/4 of the House Democratic caucus:
Fifty-eight Democrats, led by Rep. Adam Schiff (D-Calif.), wrote House Speaker Nancy Pelosi (D-Calif.) and Majority Leader Steny Hoyer (D-Md.) to pressure them to restrain federal spending.
“Failure to put in place and properly enforce budget enforcement mechanisms that cut and restrain the growth in federal spending will only make the tough, necessary decisions harder to achieve in the future,” Schiff wrote in a letter to the leaders.
Pointing to the effects of the financial crisis in Europe spurred by high levels of debt, the group said they would demand that spending be offset by cuts elsewhere under pay-as-you-go (PAYGO) rules adopted earlier this year. This would have the effect, if the group of 58 held together, of blocking extensions of unemployment insurance and other spending programs that aren’t paid for. Democrats control 253 House seats, but would only have 195 votes for such spending without the support of these other Democrats.
The reason I call these people, in both parties, deficit peacocks rather than deficit hawks is that they don’t give a rat’s ass about the deficit. They care about “looking tough,” but when it comes down to it, they manage to preserve all the most deficit-exploding elements of the federal budget, from the military-industrial complex to tax cuts for the rich. Matt Yglesias offers the definitive study of conservatives on this issue, and they clearly and openly by their words and the available evidence don’t care at all, but this is a bipartisan problem. Consider Blanche Lincoln’s efforts to bring about a massive tax cut on the ultra-wealthy by pretending that it won’t have the expected fiscal impact.
Proponents of limiting federal estate taxes are seeking a vote during Senate debate this month on small business tax legislation.
Sens. Blanche Lincoln (D., Ark.) and Jon Kyl (R., Ariz.) on Wednesday introduced a proposal to permanently set the estate tax rate at 35%. Estate wealth under $5 million would ultimately be exempted from estate taxes, but this exemption amount phases in over a 10-year period.
The phase-in is a change from legislation Kyl and Lincoln have introduced in the past and is meant to make the short-term cost of the bill appear smaller.
Emphasis on “appear.” After the ten-year window, the tax cut would have the same effect in perpetuity. And that would be hundreds of billions if not trillions of dollars distributed directly upward and, in this era of paying for spending but not tax cuts, taken directly away from the most vulnerable members of society.
As Ryan McNeely notes, Lincoln is doing this to protect a whopping 83 Arkansans who qualified for the estate tax last year. But surely, she will wail and scream (for the next few months until she gets knocked out of the Senate, anyway) about the deficit and how we need shared sacrifice to put our economy on a stable fiscal path.
And because the counter-argument to these deeply contradictory, deeply self-regarding political fools pretty much doesn’t exist, it’s become the dominant view among the media, even as actual people in the country care about having a stable job much more than “the deficit.”