The budget passed last night, and it passed without a number of the president's smart revenue-increasing proposals, including lowering the tax-deduction rate for the wealthy and cutting unnecessary agricultural subsidies. Congress also declined to extend the "Making Work Pay" tax credit, which was set to be funded by the proceeds of cap-and-trade. (Of course, some or all of those provisions could find their way back into legislation as details of the resolution are filled in during the coming months.) Reading this Los Angeles Times article, though, you'd think that the president's main budget goal was taxing the rich. But the reporter doesn't make the connection that if you want to cut deficits, you have to increase revenues.
It boggles the mind that conventional wisdom sees cutting spending as anti-deficit but cutting subsidies as "redistribution"; allowing wealthy people to only deduct 28 percent of a charitable contribution or a mortgage bill rather than 35 percent is a "Robin Hood" move, not an attempt to bring some sanity back to our fiscal policy. John McCain predictably complained about "generational theft" again -- and as a representative of the next generation, let me note that he can take his concern-trolling elsewhere -- but he he missed his chance to show that his opposition to agricultural subsidies or his prior concerns about income inequality were anything but campaign showboating.
Similarly, last night Chris Matthews was on Jay Leno's show, telling him that "the fact that we’re going to borrow $13 trillion. I mean, by the time he leaves office, the national debt will be the same as the total American economy today. That’s a little scary. We’re printing money." That's not a serious analysis at all! (Admittedly, I'm not sure what I was expecting from Chris Matthews). If you're worried about the national debt, you need to explain what programs you'll cut (remember how successful that project was for Republicans when they controlled the government) or what taxes you'll raise. Obama isn't "printing money" because ain't-that-just-fun-for-everybody, he's doing it to address a number of serious problems. And if Congress decides that wealthy people need more tax loopholes or that agribusiness ought to receive a ton of money for no good reason, well, we need to assign blame appropriately.
-- Tim Fernholz
