The special election to fill the seat in the 26th District in New York this week produced a victory for the Democrat candidate, Ms. Kathy Hochul, in large part because of the presence of a third candidate, Jack Davis, who presented himself as a "Tea Party" candidate under false pretenses. The lesson that presents for the 2012 election is left for another time -- right now, I feel the need to discuss what Representative Hochul thinks is the way forward during the remaining 18 months of this Congress.
Speaking with Rachel Maddow on CNBC, the new representative said a lot of things -- but what grabbed my attention was this part:
Republicans have to meet us halfway. There‘s just no way around it. I think what they should take some comfort in is that people in this describing are not afraid to say the wealthiest in this country when times are tough should pay their fair share and go back to taxes the way they were back under the Clinton era when last I checked things were pretty prosperous here.
The Democrats seem to indicate that the way forward to responsible governance is to "meet us halfway" and that there is no alternative. She also goes straight to the 'class warfare' tactic of insisting that the wealthiest in this country should pay "their fair share" -- the way they were back under the Clinton era, when things 'were pretty prosperous.' Let's take each of these points -- but in reverse order.
The 90s were indeed fairly prosperous times, except when anyone wants to discuss the "Internet Bubble" that burst in 1999, to be replaced by the "Housing Bubble" during the 00's. The Federal budget was about 22% of our GDP in 1990 and fell to about 18% of GDP in 2000, while revenue went up from 18% of GDP to about 20% of GDP in 2000. The annual budget deficit, while at the time seemingly large at around $300B in the first half of the decade, actually was turned into a surplus by a Republican led Congress in FY 94-2000 (Thanks, Newt, for getting that started...). Spending during the 90s was around $2Trillion per year -- about half what is being spent today -- this is the dominant reason that 'things were prosperous' -- more money was in private hands than today. So if Representative Kochul is suggesting that we go back to spending about 18% of our GDP (instead of the current 25%), I would have to agree with her on that point.
The rich currently pay taxes at the top rate of 35% and the new representative seems to indicate that everything would be better if they went to the old top rate of 39.6%. The top 1% (the "rich") accounted for 38% of the total revenue collected in 2010, with the top tax rate at 35%. Increasing the top rate to 39% will not, using anybody's calculator, result in closing the $1.6Trillion dollar deficit this year. At best. increasing the tax rates to levels in the Clinton administration might raise another $50-80Billion -- far short of the need. In fact, estimates suggest that the top tax rate would have to be raised to 88% for 'the rich' and 63% for the middle classs to eliminate the deficit. I don't think there is anyone, with the exception of Michael Moore and Van Jones, that thinks that 88% of their income represents a 'fair share' for the rich. This is just plainly ridiculous -- I'd like to say "un-American" as well, but unfortunately, there were periods in our history when such draconian tax rates were accepted (see the 1930s and 1940s, another era of 'progressive' thought).
So let's now consider Representative Kochul's imperative that Republicans have to meet the Democrats 'half way.' How did this ever become a reasonable idea and expression for compromise? If a plan to build a highway ends up costing $10B, how is it possible to haggle over this cost and say that Congress should only fund $7.5B? It can't be completed, so spending anything less than the correct amount is simply waste -- sort of like the high speed rail line in California. The project is set to spend billions of dollars, only to connect two small farming communities in the central valley of California -- among studies and concerns that the eventually completed system (if it ever is) will require billions in subsidies to keep it operating.
SImilarly, if the bill to provide something like medical care to the elderly is $200B, how does one 'meet halfway' on that? If Congress agrees to fund $150B as a result of a "meet halfway" between the Democrats wanting to spend $200B and the Republicans wanting to spend $100B -- how does that serve the nation? Who then decides which one out of four elderly people doesn't get served?
I'm sorry -- meeting "half way" is a receipe for total, unmitigated disaster. This is not what the American people need or deserve. The national governance cannot be reduced to an auction where things are decided by 'splitting the difference.' This is just lunacy.
The American people spoke through the ballot in 2010, and they decided that reckless, out of control spending and over reaching government was not what they wanted. Deciding to be only 'half reckless' and 'half out of control' by meeting the Democrats "half way" is just plainly stupid. It leads our nation to the same point of bankruptcy and ruin -- but at a more comfortable speed of collision, I guess.
I hope that Representative Kochul learns that lesson quickly -- and if she doesn't, I hope that she enjoys a very short career in Congress.