Republicans and taxes

Yesterday, The Washington Post had a terrific article by Lori Montgomery about the Republican Party's anti-"tax orthodoxy." Virtually all Republicans in both the House and Senate have signed Grover Norquist's "no new taxes" pledge, an idea he apparently came up with when he was 14 years old.

The article points out that after decades of cutting taxes, debt has soared and revenues have cratered during recent economic hardship. Norquist would disagree, but there's not much fat to cut in the federal budget either -- unless politicians want to go after defense spending, middle class subsidies (mortgage interest deduction) or big government subsidies (in energy, agriculture, mining, etc.). Those benefits are favored by many of their donors and voters -- as are tax cuts on the affluent.



Nonetheless, the article includes several quotes from Republicans calling for tax increases, including former Fed chair Alan Greenspan:

Former Federal Reserve chairman Alan Greenspan joined the chorus Friday, dropping his support for the 2001 George W. Bush tax cuts. Greenspan told CNBC he’s so “scared” by the debt that he now favors a return to the higher rates of the Clinton administration.

Greenspan was part of Ayn Rand's posse, though I doubt that will influence Rand Paul's thinking much.




Visit this blog's homepage.

Not all deficit hawks are defense hawks

Many partisan deficit hawks are simply using the current political context to pursue policies that they have long supported for other reasons. Where were their deficit concerns when voting to renew the "Bush tax cuts" -- particularly since they insisted that tax cuts for the wealthiest Americans were included in any final deal?

And many are happy to see Pentagon spending increase when other spending is facing significant reductions. As one Washington insider recently told The Nation, “When the Soviet Union disappeared...a lot of people on the right failed to notice.”

It may be that the circumstances are changing in Washington. The unnamed Washington insider I just quoted is Grover Norquist, a long-time conservative activist.

On November 30, a coalition of conservative groups signed a joint letter calling for defense cuts as part of any reductions in government spending (pdf here).

The Pentagon is slated to spend $6.5 trillion over the next ten years – equal to the current projected deficit spending in the same time period....True fiscal stewards cannot eschew real spending reform by protecting pet projects in the federal budget. Any such Department of Defense favoritism would signal that the new Congress is not serious about fiscal responsibility and not ready to lead.

The coalition includes a number of libertarians, including Christopher Preble and Ben Friedman of the Cato Institute.

Robert Dreyfuss in that February 14, 2011, issue of The Nation reported that a counter-coalition of conservatives who are hawkish on defense are leading the fight to preserve defense spending. The names are familiar from the Bush years: William Kristol, Thomas Donnelly, and Danielle Pletka.

Dreyfuss says that Kristol's Foreign Policy Initiative is an updated version of the Project for a New American Century. Indeed, FPI has been scolding the Obama administration for planned future defense cuts.

If the question was of less importance, I would suggest making some popcorn and watching the conservatives commit fratricide. Instead, it looks like the libertarians might need some help.

Good progressives may need to help Tom Coburn cut defense. What would such a Faustian bargain entail?

Corrections: Ben Friedman wrote to point out that he is not a libertarian even though he works at Cato. Also, I didn't mean to imply he's a signatory to the letter (he's not). Rather, Dreyfuss reported that Friedman and Preble gave a Capitol Hill forum calling for substantial defense cuts.


Visit this blog's homepage.