Thursday, December 13, 2012

Reason Why Republicans Can’t Propose Spending Cuts

“Where are the president’s spending cuts?” asks John Boehner. With Republicans coming to grips with their inability to stop taxes on the rich from rising, the center of the debate has turned to the expenditure side. In the short run, the two parties have run into an absurd standoff, where Republicans demand that President Obama produce an offer of higher spending cuts, and Obama replies that Republicans should say what spending cuts they want, and Republicans insist that Obama should try to guess what kind of spending cuts they would like.

Reporters are presenting this as a kind of negotiating problem, based on each side’s desire for the other to stick its neck out first. But it actually reflects a much more fundamental problem than that. Republicans think government spending is huge, but they can’t really identify ways they want to solve that problem, because government spending is not really huge. That is to say, on top of an ideological gulf between the two parties, we have an epistemological gulf. The Republican understanding of government spending is based on hazy, abstract notions that don’t match reality and can’t be translated into a workable program.

Let’s unpack this a bit. We all know Republicans want to spend less money. So the construction of the debate appears, on the surface, to be a pretty simple continuum based on policy preferences. Republicans like Mitch McConnell say government spending is “out of control” and would, at least ideally, like to bring it into line with revenue entirely through spending cuts. Democrats like Obama endorse a “balanced” solution with revenue and taxes. Right-thinking centrists, like the CEO community and their publicists like Mike Allen and Jim VandeHei, think we should cut deeply into entitlement spending while also raising tax revenue. (VandeHei, in a video accompanying his execrable story, asserts, “There’s money to be cut everywhere.”)

There really isn’t money to be cut everywhere. The United States spends way less money on social services than do other advanced countries, and even that low figure is inflated by our sky-high health-care prices. The retirement benefits to programs like Social Security are quite meager. Public infrastructure is grossly underfunded.

The Bowles-Simpson “plan” was an earnest and badly needed attempt to reconcile the GOP’s hazy belief that government is enormous with reality. They did everything they could possibly do: They brought in representatives from all sides for long meetings with budget experts, going through all aspects of federal policy in detail, in the hope of reaching an agreement on the proper scope of government and how to pay for it. It failed. The Bowles-Simpson plan wound up punting on all the major questions because it simply couldn’t bridge that gulf between perception and reality. That’s why, in lieu of any ability to identify government functions to eliminate, the plan simply pretended the federal government could have everybody do a lot more work for less pay.

The real domestic savings in Bowles-Simpson came from building on Obamacare’s steps to save money by holding down the growth of health-care costs and to cut defense spending by pretty steep levels. But these turned out to be ideas that alienated rather than satisfied Republicans. So basically it turned out to be impossible to find real spending cuts that Republicans wanted.

It’s true that Paul Ryan’s budget plan had some deep cuts. But none of those cuts touched Medicare for the next decade or Social Security at all. Ryan just kicked the crap out of the poor. So, that provision aside, if you’re not willing to inflict epic levels of suffering on the very poor, there just aren’t a lot of cuts to be had out there.

Republicans and even many centrists like to endorse taking away Medicare benefits from people like Warren Buffett. But even defining “Warren Buffett” at a level way below Warren Buffett’s income level yields pathetically little money. (The very rich have a vastly disproportionate share of income but not a vastly disproportionate share of entitlement benefits, which means taxing them produces way, way more savings than reducing their social spending.) This is why the spending side of the fiscal cliff negotiation is so discouraging. The potential cuts on the table range from fairly painful steps like reducing the Social Security cost-of-living index to even more painful steps like raising the Medicare retirement age, and none of them would save all that much money — certainly not on the scale that Republicans want.

When the only cuts on the table would inflict real harm on people with modest incomes and save small amounts of money, that is a sign that there’s just not much money to save. It’s not just that Republicans disagree with this; they don’t seem to understand it. The absence of a Republican spending proposal is not just a negotiating tactic but a howling void where a specific grasp of the role of government ought to be. And negotiating around that void is extremely hard to do. The spending cuts aren’t there because they can’t be found.


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