The Senate’s “Gang of Six” is back, this time with a surprise plan that would preserve Washington’s big-spending ways. Within an hour of the bipartisan group’s announcement of a breakthrough framework for hiking the debt ceiling, President Obama walked jauntily to the White House briefing room to embrace it as “broadly consistent with what we’ve been working on here in the White House.”
There’s a lot for Mr. Obama to like about the deal. The federal government could once more borrow trillions from future generations for more spending. It would increase some taxes and reduce others while promising to cut a few spending items over the course of a decade.
It sounds like a compromise, but it’s not clear that the White House would end up conceding much in the final analysis. As a GOP aide explained, “This is $2 billion above even Obama’s spending levels for next year. This plan is worse than anything out there now.”
The Republican half of the gang, Sens. Saxby Chambliss of Georgia, Tom Coburn of Oklahoma and Mike Crapo of Idaho, talked up the idea as a net tax and spending cut during a policy lunch with colleagues.
The bait for conservatives is a provision tasking the Senate Finance Committee with producing legislation within six months to reduce deductions and set only three tax brackets that lower overall marginal rates. Corporate tax rates would also drop, providing desperately needed incentive for our moribund economy.
Class warriors on the left will like the idea of taking away the tax deductions that they can fashion as “tax loopholes for the rich” - including deductions for mortgages over $500,000. Overall, the net tax relief is supposed to be $1.5 trillion.
An overall deficit reduction figure of $3.7 trillion over 10 years sounds great in isolation, but it’s based on phony baseline estimates. Consider that similar “cuts” from the continuing resolution deal earlier this year have produced no actual savings. According to the Congressional Budget Office, 2011 spending is already $104 billion more than it was in 2010.
Worse, Senate committees controlled by Democrats would take the lead in deciding what goes on the chopping block - if anything. No actual cuts would happen in 2012, the only year that matters. The plan ignores the only real, needed reforms of adjusting the eligibility age and means testing for Social Security and Medicare, as these are the main drivers of the deficit.
“This is classic Senate style,” the Republican aide explained. “Make a gang. Come up with some bipartisan plan. Moderates flock to it and say it’s great. They all walk out. And we’re stuck with spending cuts that never happen and tax hikes that assuredly will.”
The Gang of Six spent six months negotiating this outline which does not seriously tackle the debt crisis threatening to bankrupt the country in the near future. It’s more of a recipe for avoiding near-term pain to preserve the status quo. For the good of the country, Washington politicians need to put aside their addiction to spending and produce a budget that has Uncle Sam living within his means.
Emily Miller is a senior editor for the Opinion pages at The Washington Times.