By insisting that only spending cuts be considered for a deal to raise the debt ceiling Republicans are acting in Bad Faith, just like Republicans always do.
Senator Jeff Merkley cuts through the Republican refusal to consider rolling back Republican passed tax cuts for billionaires, and insisting on only focusing on spending cuts.
By Barbara Sprunt
Meanwhile, the White House is still talking about reducing the deficit by closing tax loopholes and raising taxes on billionaires, which has already been rejected by Republicans.
White House press secretary Karine Jean-Pierre said in a briefing on Tuesday that the talks have yielded one agreement: default isn't an option. She also insisted that despite the difficult nature of negotiations, the talks have been productive.
"We believe there is a space and an opportunity here to have a bipartisan, reasonable ... budget agreement," she said.
House Minority Leader Hakeem Jeffries, D-N.Y., slammed House Republicans for taking an "it's my way or the highway" position.
"That is not a road to a bipartisan resolution," he told reporters. "That is an effort to take this country on a reckless legislative joyride to a dangerous default, and that is why America is in this situation right now."
From the American Prospect:
BY RYAN COOPER
If one were legitimately concerned above all with budget deficit, then it makes no sense to categorically rule out reducing it with more taxes rather than benefit cuts. A dollar is a dollar either way—and especially at a time of historically gigantic corporate profits, one would think deficit scolds would conclude that soaking the rich at least a bit should be part of the program. But one would think wrong.
But all these are bald-faced lies. Republicans do not care even slightly about the national debt. The last time they had the run of the federal government, they passed laws that required tremendous borrowing. If and when they get control once more, they will do the exact same thing.
If one were legitimately concerned above all with budget deficit, then it makes no sense to categorically rule out reducing it with more taxes rather than benefit cuts.
A supporting piece of evidence here is that Republicans’ ransom demands include rescinding the additional $80 billion in funding for the IRS passed in last year’s Inflation Reduction Act.
The reason is that chronic IRS underfunding has led to a collapse in the audit rate, and hence an enormous “tax gap” of unpaid taxes, largely among the rich.
So it’s interesting that the Congressional Budget Office recently estimated that making the Trump cuts permanent would increase the national debt between 2024 and 2033 by a whopping $3.5 trillion. Sounds like a lot!
It goes without saying that this report did not change any Republican views whatsoever. It’s absolutely certain that if Republicans win control of Congress and the presidency in 2024, they will make the Trump-era cuts permanent, and probably add some more.
This is just the latest in a long pattern of Republican behavior. When a Democrat is president, they scream and cry about budget deficits, demanding sweeping spending cuts, and shut down the government or take the debt ceiling hostage to get them. Those unpopular cuts typically harm the economy, for which the president and Democrats are blamed. Then when it’s Republicans’ turn, they take all the budget headroom created by the austerity and immediately hand it to their oligarch benefactors in the form of tax cuts for the rich, blowing the deficit back up. We saw this cut-and-inflate pattern during the Clinton and Bush administrations, and again during the Obama and Trump administrations. We’re seeing it again today.
How much have Republican passed tax cuts for the ultra-wealthy added to recent federal deficits?
According to American Progress.org The Bush and Trump tax cuts are “Primarily Responsible” for the increasing federal debt.
Without the Bush and Trump tax cuts, debt as a percentage of the economy would be declining permanently.
If not for the Bush tax cuts4 and their extensions5—as well as the Trump tax cuts6—revenues would be on track to keep pace with spending indefinitely, and the debt ratio (debt as a percentage of the economy) would be declining. Instead, these tax cuts have added $10 trillion to the debt since their enactment and are responsible for 57 percent of the increase in the debt ratio since 2001,
Tax cuts initially enacted during Republican trifectas in the past 25 years slashed taxes disproportionately for the wealthy and profitable corporations, severely reducing federal revenues.
On the Bush Tax cuts:
As a result of the massive tax cut, the CBO projected that revenues would no longer keep up due to being cut so drastically and, as a result, the debt ratio would rise indefinitely.
Despite the rhetoric of runaway spending, projections of long-term primary spending have decreased, but projections of long-term revenues have decreased vastly more. The United States does not have a high-spending problem; it has a low-tax problem.
It is tax cuts that have caused the dramatic increase in primary deficit projections.
These changes led to a significantly more regressive tax code than existed before the Bush tax cuts were enacted, and one that brought in vastly less revenue.
The 2017 changes also largely benefited the wealthy, once again making the U.S. tax code significantly more regressive.27
Taken together, the Bush tax cuts, their bipartisan extensions, and the Trump tax cuts, have cost $10 trillion since their creation and are responsible for 57 percent of the increase in the debt ratio since then.
Conclusion
A series of massive, permanent tax cuts have created large federal budget primary shortfalls and continue to exert upward pressure on the debt ratio. In other words, the current fiscal gap—the growing debt as a percentage of the economy—stems from legislation that cut taxes, disproportionately for the very rich. While it is true that the Great Recession and legislation to fight it, along with the costs of responding to the health and economic effects of COVID-19, pushed the level of debt higher, these costs were temporary and did not change the trajectory of the debt ratio. If Congress wants to decrease deficits, it should look first toward reversing tax cuts that largely benefited the wealthy, which were responsible for the United States’ current fiscal outlook.
The American Progress.org report also looks at Reagan’s substantial contribution to our rising federal deficits, and the Clinton effort to claw back some of that lost revenue (about 50%). It is well worth the read.
The Republican insistence on only focusing on spending cuts, completely ignores what is really driving the federal defects higher: The Republicans’ Tax Cuts for the Wealthy.
Republicans’ bad faith behavior shows beyond any doubt that they only represent the interests of their billionare donors, and giant corporations.
