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The False Narrative of the Grand Bargain on Tax Hikes

Over the past few months, there has been a daily trickle of establishment Republicans coming out before the media in hostage style confession statements to declare that they would accept tax increases as part of a “grand bargain” to cut the deficit.  The latest member was Lindsey Graham, who stated his newfound opposition to the taxpayer pledge of Americans for Tax Reform, which he considered to be too ideologically intransigent.  Tom Coburn continues to work with the “Gang of 6” in an effort to “raise revenue.”

The media has extrapolated on Graham’s narrative, suggesting that Republicans are too unyielding to compromise and that they would even chase Reagan out of the party if he’d be president today.  Buttressed by Jeb Bush’s comments concerning Reagan’s place in today’s Republican Party, the media is chastising us for being so stridently opposed to tax increases – even in the event of a “grand bargain” of $10 of spending cuts per $1 of tax increases.

The problem with this narrative of the grand bargain is that no such agreement exists.  Nor will it ever materialize.

I’ll be the first person to agree to such a deal.  There, I said it.  If Democrats would really agree to a deal that would wind down the welfare and entitlement programs and eliminate full departments of the executive branch, I would reluctantly go along with some form of revenue increases.  Raising taxes is unfair and counterintuitive, but if that is what it would take to get Democrats to come onboard with our efforts to shrink government, then it would be a deal worth making.

Then again, if unicorns could fly, we wouldn’t need airplanes either.

The reality is that Democrats have never agreed to anything more than notional baseline cuts over 10 years.  They have not agreed to close down a single agency or office, much less a full government department.  They have not put on the table a plan to eliminate even a few of the 2,184 assistance programs.  And they never will.  It would be an anathema to their entire political desideratum: growing government and creating dependency and special interests for the purpose of cementing a permanent power structure.

The farm bill that just passed the Senate is a great example of how gargantuan budget figures are used to create the false impression that we are cutting spending.  Both Republicans and Democrats on the Agriculture Committee are patting themselves on the back for their great work in cutting $23 billion from the 10-year baseline, down to $969 billion from $992 billion.  The problem is that the one program they eliminated – direct payments to farmers – will be replaced by a more costly shallow loss protection program that is not accurately reflected in the cost of the bill.  Moreover, this bill locks in several hundred billion extra in food stamp spending, thereby consummating the Obama Food Stamp presidency even after he leaves office.  Remember, this bill makes food stamp spending mandatory.

Over the next few years, we will hear grumblings of budget deals that sound like an Old McDonald song: “a few trillion here and a hundred billion there; here a trillion there a billion, everywhere a spending cut.”  However, once we cut through the illusory narrative generated by the media, we’ll realize that not a single program or agency is eliminated, at least not without the creation of a new one in its place.

The real question is why so many Republicans are revealing their cards on the issue of taxation in preparation for a deal on spending that Democrats would never support?  You don’t hear Democrats saying, “gee, maybe we would agree to abolish the Department of Education as part of a broader deal to raise taxes.”

Democrats might be the evil party, but Republicans are intent on being credulously stupid.

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