So what's happened so far? First, Democrats offered up an extension of cuts to Medicare providers. Nope, said, Senate Republicans, and they filibustered that proposal. Now, apparently, there's a new proposal out there, something called "pension smoothing," that allows companies to put less money into their pensions than they are supposed to in the next few years—thus increasing their profits and, subsequently, the amount they pay in taxes. Then they have to make up the difference down the road, which will reduce profits and taxes paid in the long run, according to the plan. Over the all-important ten year budget window (that's the amount of time the Congressional Budget Office uses to score budget legislation), this measure would likely produce revenue for the federal government, providing the "pay for" Republicans demand. But, in the long run, pensions might be underfunded, and the government won't actually see an increase in revenues as the losses cancel out the gains of the early years.
From what I've read, the proposal sounds gimmicky, but I'll admit the finer points are beyond my level of understanding regarding these things. I'm not an expert fudger of numbers. It might pass, given that Republicans have proposed pension smoothing as a legitimate "pay for" in other recent legislation. Hey, it's better than cutting food stamps. But all this would be just to get an extension of emergency unemployment benefits through the Senate. Who knows what it would take to get it through the House? If House Republicans don't think they'll pay a price, they can just ignore any bipartisan legislation out of the Senate.
Still, what really irks me is that Republicans love to demand that certain things be paid for, while other things need not be. Here's a question on that front: who is paying for the Republican government shutdown of last fall, an act of supreme hubris and stupidity that cost our economy $24 billion. Yes, I know it's not the same thing, as the $24 billion wasn't a direct cost to the government. But the direct cost is somewhere in the billions. Do you hear the Republicans talking about paying for that? I don't.
Let's explore the reasons why below the fold.
There's a simple reason why Republicans aren't demanding that the shutdown be paid for: It was their fault. They did it. They tried to blackmail the president into gutting Obamacare, and they failed, miserably. They can fight all they want about whom among them is at fault. Sen. Ted Cruz (R-TX) can even lie through his teeth (that takes some chutzpah, as they say in Texas) and pretend that it was the Democrats who shut it down. Of course, in the same week that Cruz lied about it, Jay Leno asked House Speaker John Boehner (R-OH) on national television if the GOP was responsible for the shutdown. His answer: "Yep."
We should demand that the shutdown be paid for. And, while we're at it, let's pay for the costs to our government of the Republican-caused debt ceiling scare in the summer of 2011, the one where Republicans, as Paul Krugman put it, took "America hostage." The Bipartisan Policy Center found the cost to be $18.9 billion over ten years. In these instances, Republicans simply threw our money away. But they don't want to pay for it.
Here's what we should do. Present a bill for these Republican actions in the form of costs to the government. In order to be fiscally responsible, here's how we would pay for them. We eliminate subsidies to the oil and gas industry, saving $38.5 billion over the next decade. With oil at $100/barrel, do they really need subsidies? Come on. And we eliminate the carried interest loophole that allows hedge fund managers to avoid paying ordinary income tax rates on their income. That would raise another $20 billion over ten years.
That $58.5 billion could pay for the shutdown, the debt ceiling crisis, a one-year extension of emergency unemployment benefits ($26 billion), and a restoration of the cuts to food stamps ($8 billion over ten years). Keep in mind that every dollar spent on food stamps generates $1.67 for the economy. Thus, as with unemployment benefits (see above), it almost pays for itself in terms of an overall investment. Not bad for a day's work.
Howard Gleckman at Forbes made exactly this point, and noted that these temporary tax breaks are simply government expenditures, no different in budgetary terms from unemployment benefits. The difference is that instead of the money going to folks who've been out of work for many months, the beneficiaries are, you guessed it, corporations.
Wouldn't you love to see Democrats put Republicans on the defensive like this? Wouldn't you love to see Democrats pointing out Republican hypocrisy as they have to defend the costs of their stupidity as well as of absurdly narrow corporate subsidies—corporate welfare really—while Democrats are fighting for people looking for a job?
I know I would.