Deficit Reduction Plans
UPDATE: Jonathan Chait writes:
Jonathan Chait has an update: Second Update: A couple well-informed readers have pointed out that the Bowles-Simpson commission calls for $180 [billion] in higher revenue in year 10, so it's likely Weisman simply confused this with the 10-year net.
Seems correct--certainly Weisman's story as written is wrong about what Simpson-Bowles calls for on the revenue side, and sources assure me that the negotiations are in a very different place than $180 billion of revenue as a ten year total...
Jonathan Chait reads Jonathan Weisman in the Wall Street Journal and writes that he finds Weisman's story:
JC: actually hard to believe. According to [Weisman's] story, the [possible Senate ten-year budget] deal calls for nearly ten times as much spending cuts ($1.7 trillion) as higher revenue ($180 billion.) Do you know how little $180 billion over ten years is? It's essentially nothing. It's one-quarter as much as the cost of extending the Bush tax cuts only on income over $250,000.
And Chait asks:
Are Democrats Negotiating A Monumentally Stupid Deficit Deal?
Could centrist Democrats really endorse a package that cuts spending by $9 for every $1 of revenue raised?
Check first to see if Chait is correctly reading Weisman. Yep. Weisman says that the Group of Six is following Simpson-Bowles on the spending side and strongly implies that it is going to follow Simpson-Bowles on the tax side as well:
Jonathan Weisman: Senate Deficit Plan Details Emerge: The Senate group's working plan calls for placing separate caps on security and nonsecurity spending, and missing a budget target in one area would not trigger mandatory cuts in the other. The spending targets would follow proposals laid out by the deficit commission, which recommended cutting discretionary spending by $1.7 trillion through 2020. Lawmakers on the spending committees would draft legislation to meet the targets. But if they were not met, automatic, across-the-board cuts would go into effect. The tax-writing committees would be given two years to overhaul both the individual and corporate tax codes, with general instructions to close tax breaks and minimize or eliminate tax deductions while lowering tax rates. The committees would be given a target for additional revenues to be raised by the new code. The deficit commission's version of tax reform would net $180 billion in additional revenues over 10 years...
But centrist Senate and White House sources both say that the $1.7 trillion spending cut and $180 billion tax increase numbers in Weisman's article are simply not comparable, and should not have been compared.
Me? If I were a centrist Democrat, I would start negotiating from a baseline that assumes the expiration of all of the 2001 and 2003 revenue measures and that also imposes an high-income surtax to pay for Medicare Part D, and start the negotiation from there. But that is just me.
Centrists--Democrats and Republicans--should be shooting for a 1-to-1 ratio, not a 9-to-1 ratio.
