The Operative Budget

Ron Ziegler, Richard Nixon's press secretary, once had the thankless job of telling the White House press corps that his boss had lied like a cheap rug. "This is the operative statement," he said in 1973 as he told the assembled reporters to ignore whatever he had said in the past. "The others are inoperative.''

The Republican Party now seems to be having seances with Ziegler's ghost for inspiration.

Last week, the party leadership staged a disastrous "budget unveiling" which did not feature any actual budgeting. In the chorus of boos and catcalls which followed, the GOP hastily explained that the stunt was never actually intended to present a budget (suuuure it wasn't) but was merely a warm-up for the actual budget unveiling. And so, the supposedly best and brightest of the GOP assembled this morning to present what Ziegler might have called their operative budget.

No one in the party seems to have realized that this shindig took place on April Fool's Day. So as expected, their budget is a joke. Less amusingly, it's a disaster for anyone who doesn't have gobs of money - in other words, 99.99% of us.

The proposal brings back the good old days of supply-side tax cuts, dropping the top tax rate to 25% for anyone making over $50,000 a year ($100,000 for joint filers). Everyone else pays a 10% rate.

So let's do some math. Let's suppose Bob and Carol Moneybags earn a combined $400,000 annually, so they currently pay 35%, or $140,000, in federal income taxes. (For simplicity's sake, let's assume they have no kids and no deductions.) Under the Republican proposal, their rate would be cut to 25%, or $100,000, for a tax savings of $40,000.

Now let's look at Ted and Alice Worker, who together make $56,000 a year. Their current tax rate is 15%, so they pay $8400 in tax. The GOP plan cuts that to 10%, or $5600, for a tax savings of $2800.

So let's compare. The Moneybags' tax savings are more than fourteen times that of the Workers, despite the fact they make only seven times as much, so the budget proportionally gives far less in tax savings to the people who need it the most.

But wait, there's more. The GOP plan also "eliminates nearly all existing tax deductions, exclusions, and other special provisions" - mortgage interest, child care, medical care, job hunting, et cetera - that have made it possible for the middle class to retain some fiscal viability even in the current economy. The upshot of this is that a full third of lower- and middle-class taxpayers (that is, those of us in the bottom 60% of the income scale) would actually pay more under the GOP plan than they do now.

So in other words, Bob and Carol would royally screw Ted and Alice.

And if all that weren't bad enough, the GOP budget would impose an across-the-board freeze for all non-military spending (the Pentagon budget would increase to $714 billion by 2019) just when we need it the most. More money for schools? Too bad. More money to fix roads and bridges? Buy a Learjet and fly above them. The economic stimulus? Gone.

But holders of Treasury bonds and other forms of public debt would do just dandy, thank you very much. The GOP envisions the annual interest paid on the national debt to increase from $170 billion in 2009 to $643 billion in 2019 - a 278% increase with absolutely nothing to show for it.

And in a truly bizarre example of how to pull numbers out of one's hindquarters, the GOP offers this graph as "proof" that they know best:


Yes, the Republicans insist they know how their budgeting will affect government revenue in seventy years. The party must have an official Bureau of Making Crap Up in order to get something like this.

The actual legislation text says that "within ten years of enactment of this legislation, individuals would choose one of the two tax systems: the current tax code or the simplified system." So the GOP is openly admitting that their plan would make the existence of one tax system for the rich and another for everyone else de jure rather than de facto.

Furthermore, the GOP's insistence that their budget plan will work is based on the assumption that everyone is willing to pay a higher tax rate rather than go for the lower one. Of course, no one will do that; everyone will naturally go for the lower rate, which blows the party's rosy scenario right out of the water.

Anyway, with the stimulus scrapped entirely, the Republicans are betting that any economic recovery will occur purely due to tax cuts, which has been proved time and again to be fallacious. Tax cuts by themselves don't have any significant economic effect, particularly not such trickle-down cuts as the GOP is proposing.

So rather than come up with solutions to fix our economic woes, the Republicans have delved into the all-too-recent past to dredge up George W. Bush's tax policy - exactly the sort of nonsense that got us into this mess in the first place.

The GOP really is a broken record, condemned to repeat the same twaddle endlessly. Congress should send this supposed "alternative plan" packing until the Republicans show they have some connection to reality.