Why the Super Committee failed
The Super Committee’s failure to reach a $1.2 trillion deficit reduction deal epitomizes the hyper-partisan gridlocks that have paralyzed America’s democratic institutions.
When politics is prioritized at the expense of responsible governance and reason is lost to spin and distortion, it is any wonder that the Super Committee failed to produce a reasonable and fair deficit reduction plan?
Take, for example, the debate over taxes. The Bush era tax breaks for the wealthy have added trillions to the national debt since 2001.
“Making the tax cuts permanent for all taxpayers, regardless of income, would cost $3.1 trillion over the next 10 years and inflate the national debt to 82 percent of GDP,” according to a 2010 Pew Economic Policy Group report. “This would be the highest level since 1948, in the aftermath of World War II, and well above the average debt-to-GDP ratio of the last 50 years of 37 percent. The current ratio is about 57 percent.”
But Republicans have conveniently ignored the role of such tax breaks have played in contributing to the nation’s debts. In fact, Republicans have successfully branded the expiration of temporary tax breaks – particularly those from the Bush era – or the closing of tax loopholes to be tax increases.
Considering that all six Republican members of the Super Committee have signed the anti-tax pledge sponsored by Grover Norquist, any meaningful tax reforms to generate the additional revenues needed to reduce the deficit would meet staunch opposition from Republican lawmakers. Instead, Republicans have blamed the nation’s deficit solely on government spending.
Operating under the anti-tax and anti-spending framework, the Republicans have seized the deficit reduction debate to campaign for massive cuts to social services programs such as Social Security, Medicare, and Medicaid under the guise of “entitlement reforms.”
While some entitlement reforms are needed to ensure the sustainability of important social safety nets, gutting those programs while ignoring the unfair tax policies that disproportionately favor the rich – the top 2% – at the expense of America’s middle class, seniors, the disabled, and the poor is unconscionable.
Taking away more than necessary from the most vulnerable members of society during a time of great need while sparing the super rich from paying their fair share will only widen the income disparity between the rich and the poor. It’s difficult to imagine how America would recover and prosper when half of its population struggle to make ends meet.
Read More: America’s growing income inequality
Politically, the Republicans would like to cast the Democrats as tax-and-spend liberals. But the reality is that both higher spending (waging two wars) and lowered tax revenues (Bush’s tax breaks for the wealthy) have contributed to the nation’s debt. Therefore, both lowering spending and increasing tax revenues must be part of the solution to reduce the nation’s deficit. Indeed, both the Simpson-Bowles and Domenici-Rivlin plans have called for a balanced approach in cutting spendings and raising tax revenues to reduce the federal debt.
“This is a problem that we can’t grow our way out of. We could have double digit growth for decades and not solve this problem,” said Erskine Bowles, who co-chaired the National Commission on Fiscal Responsibility and Reform. “It’s not a problem that we can solely tax our way out of. Raising taxes doesn’t do a darn thing to change the demographics of a country or change the fact that health care is growing at a faster rate than GDP. And it’s not a problem that we can solely cut our way out of. I think you have all proven that over the last year.”
- Pew Economic Policy Group: Decision Time: The Fiscal Effects of Extending the 2001 and 2003 Tax Cuts (PDF)
- WhiteHouse.gov: Infographics – U.S. National Debt
- Americans for Tax Reform’s website
- IRS.gov: Estate tax
- WhatTheFolly.com: How the 2001 and 2003 Bush tax cuts benefit the wealthy
- WhatTheFolly.com: Discretionary spending will face third round of cuts if the Super Committee’s plan fails
- WhatTheFolly.com: Congressional Budget Office warned U.S. debt may exceed total economic output by 2035
- WhatTheFolly.com: Democrats react to Super Committee’s super fail
- WhatTheFolly.com: Republicans blame Democrats for Super Committee’s failure
- WhatTheFolly.com: Super Committee fails to reach deficit reduction deal
- WhatTheFolly.com: Transcript: Super Committee testimony by Erskine Bowles, Co-Chair of the National Commission on Fiscal Responsibility and Reform
- WhatTheFolly.com: Transcript: Super Committee testimony by Dr. Alice Rivlin on reducing the deficit
- WhatTheFolly.com: Transcript: Super Committee testimony by former Sen. Alan Simpson, Co-Chair of the National Commission on Fiscal Responsibility and Reform
- WhatTheFolly.com: Transcript: Super Committee testimony by former Sen. Pete Domenici on deficit reduction
- WhatTheFolly.com: Older Americans hit hard by the Great Recession
- WhatTheFolly.com: America’s growing income inequality
- National Commission on Fiscal Responsibility and Reform: Final Report – The Moment of Truth (PDF)
- Bipartisan Policy Center: Restoring America’s Future: Reviving the Economy, Cutting Spending and Debt, and Creating a Simple, Pro-Growth Tax System (PDF)
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