Yeah, I know. David Frum is the guy who coined the phrase "Axis of Evil" and sold the Iraq War. In recent days, however, he's been spending more time and energy trying to save what's sensible about conservatism (admittedly, there isn't much) from the likes of Glenn Beck. So, I read his website once in a while. Plus, I am good friends with the managing editor.
Frum lays out the budget challenges reasonably clearly. Though he frames it in terms of the policy dilemmas facing conservatives, the same principles could well apply to liberals:
[I]t’s . . . relevant to think of conservatism as an attempt to draw a line connecting four points:
1) No tax increase
2) No defense cuts
3) No Medicare cuts
4) Rapid move to a balanced budget.
From the liberal perspective, we could easily swap in social programs for number 2 and add Social Security to number 3. Number 4 is shared by many on the left, and while we don't buy into number 1 for the rich, many of us believe it would be wrong to raise taxes on the lower, working, or middle classes.
Frum notes, correctly, that nobody can have all 4 at the same time, so budgeting becomes necessarily a question of priorities. As a neoconservative, he advocates keeping number 2 in place, cutting "waste" from Medicare, and is open to "tax increases provided they fall on consumption and pollution rather than work, saving and investment. A carbon tax yes, a VAT if need be, but no increases in personal or corporate income taxes or capital gains taxes." He goes on to describe the 15% tax rate for corporate dividends as an unjustifiable "giveaway." He would not move to a balanced budget until unemployment is under 7%.
Of course, David Frum is laughably unrepresentative of today's Republican party, and he himself will be the first to tell you that. But this is some basis for common ground.
For my part, I agree that the budget deficit should only be the priority once unemployment is lower, which is why it makes sense to separate talk about this year's budget with the longer-term budget projections. I also agree with him on Medicare expenditures, though I'd argue the best way to slow the growth in Medicare costs is through implementation of the PPACA, GOP compromise on allowing CMS to negotiate prescription drug prices, and, if the stars aligned, a public option paying Medicare reimbursement rates. We should continue that work, not abandon it, as the GOP seems to make an article of faith.
In terms of spending, I would be more willing to cut defense than Frum (natch), but I would be less willing to cut things like home heating oil assistance, Pell Grants, or environmental clean up, as President Obama is proposing.
On taxes, I welcome the idea of pollution taxes, specifically through cap and trade. I am concerned that a VAT or consumption tax would be regressive, and so would take the place of "savings or investment." I also do not accept the premise that taxes on all levels of income are created equal. If there are going to be some spending cuts, these would disproportionately harm the poor and working class. The rich should therefore be made to sacrifice in the way they know how: higher marginal rates. Income taxes should go to the Clinton levels for income from $250-500K, with higher marginal rates added at $500K, $1 million, $10 million, and $100 million of annual income. Taxing dividends, carried interest, and eliminating corporate loopholes are important steps we can take, as well.
There is no sense debating with people unwilling to accept the necessity of trade-offs, or with people unwilling to contemplate the real-world effects of their actions. The debate progressives and conservatives can have with David Frum (and each other) is miles away from the debate that Obama will have with John Boehner. But his piece has the virtue of clarity and can open the door to a legitimate discussion of policies and priorities across the ideological divide, and even within it. Frum argues that how conservatives reconcile the four principles define what types of conservatives they are. How liberals answer similar questions has the same effect.
Obama, I would submit, is smart for pushing for a balanced budget in 10 years but not in the short term. He's done a good job at addressing the growth in Medicare spending, and is smart to leave social security alone, at least for now. His spending proposals are too heavy on cuts to social programs and not heavy enough to defense, so I give him a demerit on that one. His views on taxes are generally right, but irrelevant, as the GOP House will prioritize Frum's point number 1 over all else.