Heritage budget guru Brian Riedl in his e-mail blast today disputes the claim that “the Fiscal Commission recommendations rely overwhelmingly on spending cuts, and only slightly on tax increases.”
The commission, he says, “hid trillions in tax increases in its budget baseline.” He says using a current-policy budget baseline, $8 trillion is saved in the first decade through a nearly equal ratio of tax hikes ($3.3 trillion) and spending cuts ($3.5 trillion).
But here’s the kicker: “The long-term rise in deficits is nearly 100% the result of rising entitlement costs.” Yet “nearly all first-decade spending cuts are discretionary” — and half of those in defense.
His disturbing punchline: “So, in return for massive tax hikes, there is almost no movement in entitlement trends in the first decade.”
Riedl says the report has some good ideas, “but we can clearly do better.” Here’s his WebMemo, which goes into much greater detail explaining how spending is the problem, not revenues, and that we should place the focus on spending cuts rather than tax increases. (The commission’s proposal “includes a tax hike trigger that would automatically raise taxes if Congress does not enact what they call tax reform.”)
Riedl affirms a point made in a post by Professor Rahe, i.e, “Spending, not revenues is the problem, and we’ve been down this road before: immediate tax hikes accompanied by promises of spending cuts in the future. This is unacceptable.”