‘If we’ve learned anything over the last two years, it’s that we cannot spend our way to prosperity.” That’s what Republican lawmakers proclaimed in their “Pledge to America,” the campaign document spelling out their agenda in the 2010 midterm election. They won a historic electoral victory, an endorsement from Americans who trusted them to act on the message: Stop spending money we don’t have, that we have to borrow from China, and that our children and their children will have to pay back. And before their new House majority has even been sworn in, Republicans have decided to give spending our way back to prosperity one more try.
In the process, they’ve increased the chance that the most free-spending, anti-prosperity president in American history will be reelected come 2012.
Had I taken the Republican pledge seriously (I didn’t), I’d be crushed. “Crushing,” by the way, is the word the pledge used to describe the national debt. That was before GOP lawmakers voted in overwhelming numbers (37 out of 42 in the Senate, 138 out of 174 in the House) to add about $858 billion to it on Thursday.
So much for the pledge’s inveighing against “trillion-dollar ‘stimulus’ spending.” Republicans have added hundreds of billions of dollars to the national debt — a debt that is already $14 trillion even by Washington math and closer to $130 trillion if we apply the math Washington imposes on everyone else.
Estimates of the exact amount of deficit spending in the tax deal vary: The Senate’s Joint Committee for Taxation officially put it at $858 billion, the figure reported by the Wall Street Journal. Charles Krauthammer contends that the combination of spending increases and tax cuts tops out at $990 billion. And (as Dr. Krauthammer notes) even Rep. Paul Ryan — the GOP’s reputed scourge of Big Government, except when voting for TARP, auto-company bailouts, and the confiscation of executive bonuses — concedes that the tax deal, which he strongly supported, includes a staggering $313 billion in spending add-ons beyond what was necessary to maintain the Bush tax rates.
Estimates all agree on one thing — the bill’s spending cuts to reduce the size and scope of government add up to zero, no matter who does the counting.
Even if you drink the Kool-Aid that says, “Don’t worry about the deficit effects of tax cuts because they invariably stimulate the economy and pay for themselves,” Republicans have just agreed to massive, unfunded spending, much of it unrelated to tax cuts. Not only do we have the familiar waste (ethanol, “renewable” energy, etc.), as Hugh Hewitt points out, “there is at least $75 billion in new spending in the plan, agreed to by the GOP less than five weeks after the country fairly screamed, ‘Stop Spending Our Children’s Money!’”
The GOP pledge blasted President Obama and Democratic leaders for breaking a solemn promise to “put the brakes on Washington’s spending habits,” and for instead “stepp[ing] on the accelerator and demonstrat[ing] unparalleled recklessness with taxpayer dollars.” Right.
The pledgers even patted themselves on the back for their underwhelming promise to roll back spending to 2008 levels and to save us “at least $100 billion in the first year alone.” Now, in a single bill just three months later, they have voted for spending that is more than eight times the amount of this (currently nonexistent) $100 billion in savings, and more than twice the size of the (nevertheless huge) 2008 budget deficit.
“But wait,” you say, “the GOP had to do this. There was no other way to save the Bush tax cuts, and that makes it okay, because tax cuts are stimulative. They actually raise revenue in the long run.” In this case, that is both wrong and irrelevant.
It is wrong because income taxes are not being cut — the deal stops Democrats from raising them — and because the lower rates are only kept in place for two years. After that, the increase that would have happened two weeks from now kicks in. Lower tax rates only spur economic growth in a meaningful way when they are permanent — meaning, when they will persist, absent an act of Congress that changes them. There has been no meaningful growth in the past two years because the specter of tax increases hovered over businesses and entrepreneurs, depressing investment and hiring. Why should the next two years be any different, with the same specter hovering — this time with even more trillions in debt to finance?