As Republicans continue to reject any proposal to increase revenue to offset budget cuts in the current negotiation over raising the federal debt ceiling, it is hard to believe the G.O.P. is serious about deficit reduction. The GAO (General Accounting Office), the CBO (Congressional Budget Office), former Secretaries of the Treasury of both parties, scores of economists (including a Nobel Prize winner in Economics) and the bi-partisan Bowles-Simpson commission (National Commission on Fiscal Responsibility and Reform) have all concluded budget cuts alone will not balance the budget or pay down the national debt. The only way to solve the debt crisis is by raising government revenues while cutting spending at the same time. Democrats agree. President Obama and Congressional Democrats put forth a plan that cuts 4 trillion dollars from the federal budget and contains a mix of modest revenue increases which will balance the budget and put the nation on the fast track toward eliminating the national debt. Republicans, however, insist that Democrats agree to budget cuts without raising additional revenue; otherwise, the G.O.P. will force the federal government to default on it's debt obligations.
The Republican Party is being held hostage by a block of ultra right wing "Tea Party" Libertarians in the House of Representatives whose approach includes many radical ideas, like the legalization of recreational drugs and prostitution (Ron Paul, R-TX) and legalizing discrimination by race (Rand Paul, R-Sen. - KY). Equally disturbing are their ideas to dissolve many functions of the federal government, including the elimination of the Department of Education, the Federal Reserve, Department of Energy, the Internal Revenue Service, Medicaid and all welfare programs, privatizing Social Security, and forcing Medicare into the private health insurance market. The Republican Party has no intention of balancing the federal budget or solving the debt crisis. Their goal is to completely destroy the federal government, the economy and the social compact of the United States of America.
It is important to understand how the United States came to a debt crisis in the first place. Republican Presidents Ronald Reagan and George H. W. Bush quadrupled the national debt under 12 years of G.O.P. administrations. After four straight years of budget surpluses under the Clinton administration, Republican President George W. Bush turned surpluses into huge deficits, doubled the national debt in 8 years and led this nation into the worst depression since 1928.
Republicans believe that lower taxes lead to greater prosperity. However, recent history shows the opposite to be true. George W. Bush's tax cuts created neither jobs nor economic growth. During the Bush presidency, employment grew at a 0.9% annual average rate (CBS MoneyWatch 11/30/2010) compared with a 2.5% average rate for comparable periods since WWII. Median household income was lower in 2007 than in 2000. And, while Republicans claim to be defenders of small business, the Bush tax cuts were skewed to the super-rich and less than 2% of small business owners qualified for them (US News, August 10, 2010).
Senate G.O.P. Minority Leader Mitch McConnell's favorite phrase, "job killing;" is used to justify Republican resistance to many Democratic initiatives, but especially raising taxes, as if there were jobs just waiting to be created if the government would lower taxes. Tax cuts, if they create jobs at all, create them in Asia where American multi-national corporations find lower employment costs and no environmental regulations. The Bush tax cuts of the last decade amounted to a huge jobs program for Asian countries. And, since interest rates in the United States have been at historic lows, tax cuts encourage investment outside the United States, not in it.
Republicans constantly complain about the high corporate tax rate in the United States. The marginal rate, at 35%, is one of the highest in the world, but, the actual (effective) corporate tax rate is one of the lowest (averaging 14%) due to thousands of tax credits, loopholes and givebacks in the tax code. General Electric, the nation's largest corporation, got a tax refund last year. In fact, these ten companies paid no tax at all last year: Exxon Mobil, Bank of America, General Electric, Chevron, Boeing, Valero Energy, Goldman Sachs, Citigroup, ConocoPhillips, Carnival Cruise Lines (Senator Bernie Sanders', I-VT, as published April 15, 2011 by MoveOn.org). A study in 2008 by the GAO found that 55% of American companies paid no income tax at all in at least one of the last seven years (New York Times, May 2, 2011). A bounty of subsidies, shelters and special breaks have made American multinationals “world leaders in tax avoidance,” according to Edward D. Kleinbard, a professor at the University of Southern California, who was head of the Congressional joint committee on taxes (NY Times, 5/2/11). Last year, corporate tax revenue dropped to 9% of federal income in spite of corporate profits hitting an all-time high in 2010.
Yet, Republicans have taken corporate tax loopholes, tax breaks and givebacks to corporations off the table in current budget negotiations. Republicans call this approach "pro growth" after a decade in which business and industry used these tax breaks to create no jobs and kept wages for the American worker flat. In some cases, Republican legislators have voted to keep tax breaks that benefit them personally. For instance, noted Tea Party Republican Michele Bachmann (R-MN), a G.O.P. presidential candidate, receives $250,000 per year in farm subsidies for her family farm. Kristi Noem (R-S.D), who won in 2010 on a platform of spending cuts, has received millions of dollars in federal farm subsidies over the last decade. It should be no surprise that Republican legislators refuse to cut farm subsidies, but favor cutting social programs instead.
If the United States is serious about solving it's debt crisis, we need legislators who are willing to put aside special interests, ideology, and partisan debate. President Obama, Vice-President Biden and other Democrats are doing just that. We need Republicans to do the same.
And, that is a view from Missouri.
