Reagan Compromised, So Should GOP, Dems
President Barack Obama and Speaker of the House John Boehner shake hands at a State of The Union address.
By John Guzzon
Modern Times Magazine
July 13, 2011 — Budget negotiations have taken the two political parties and sent them out on a symbolic game of chicken.
Both democrats and republicans are acting like two teenage boys from some Hollywood action fest. They threaten each other, itching for a fight, until the big battle comes to the fore and usually someone gets killed — most likely he who blinks first. But in this political battle, the only killing that will happen is at the polls and the only real victims will be Americans.
On one side stands republicans. Under the republican plan, the temporary tax cuts imposed by President Bush II would be made permanent. To pay for this, republicans want to gut Medicare. This will result in an additional $6,500 burden, mainly on retirees.
On the other side is democrats. They want to keep Medicare funding as it is, trim a bit more from the military budget, and allow the Bush tax cuts to expire. The monetary burden on this plan will be placed on those earning more than $250,000 each year.
It really is that simple, but because this is a political battle, the truth is obscured by clouds.
The last time the U.S. government operated a balanced budget was 2001. After all of the wrangling of the 1990s and Bill Clinton’s battles against Newt Gingrich’s republican opposition, the budget deficit was finally under control. But Bush II and the “War On Terror” changed that, and quickly.
Bush II inherited a $2 trillion budget and ended with a 3.6 trillion budget. But not only did Bush II nearly double spending, he also cut revenues. Then, when the economy tanked, tax revenues dropped even more and spending rose even higher. According to the Congressional Budget Office, since the last balanced budget in 2001, Medicare and Medicaid costs have increased the most since 2001. The CBO said the 1.7 percent increase as a percentage of the U.S. gross domestic product, or GDP, was due to the baby boomer surge into retirement and a nearly 10 percent increase in healthcare costs.
Defense spending, as a 1.6 percent of GDP increase, is the next largest increase from 2001, nearly doubling from pre-war levels.
Next up? support for those on food stamps, receiving unemployment compensation and foster care due to the recession. That total is about 1.4 percent of GDP.
Those are the facts, but these politicians have refused to compromise. Republicans won back the House thanks to the engaged tea party base that want to do things like go to an immediate balanced budget and not increase the debt limit any further. Their position is “no retreat, no surrender.” They have also wrapped the debt limit debate into a federal spending reduction debate on purpose.
Democrats want the expiration of the Bush II tax cuts. Most of them are in ‘no retreat, no surrender’ mode. President Obama has tried to offer a bit of compromise: his offer of raising the Medicare eligibility age to 67, for example. But since he won’t move on extending the Bush tax cuts, he, too, won’t compromise according to critics.
Recent leaks that House Speaker John Boehner had made an offer of closing tax loopholes in a roundabout attempt to increase revenue without having to admit he raised taxes, made him an instant pariah. He even had to make a public statement to deny it.
Everyone who understands the U.S. budget knows that the debt ceiling will have to be raised eventually or the consequences will be tragic. We have borrowed too much money.
But don’t just believe the rhetoric. According to a Congressional Research Service report released earlier this year, if the debt limit is reached (meaning the limit is not raised), the government has a few choices. It can eliminate all discretionary programs, cut nearly 70 percent of outlays for mandatory programs, increase revenue collection by two-thirds or take some combination of all three steps.
Raise taxes by two-thirds? Cut all discretionary programs? Cut nearly 70 percent from mandatory programs? Even if the government borrows more money, the cuts will still have to be very deep and we will have to pay for them somehow.
Taxes pay government debt. The debts of the past 10 years will have to be paid off. Isn’t it good financial sense to take in more revenues because it needs to be paid off as soon as possible? Spending does have to be cut, but without increased revenue — higher taxes, or closing of loopholes, or whatever — it will take even longer, meaning more interest and more taxes.
Eventually, enough taxes will be collected to pay of the debt. But how many generations will it take?
The tea party brethren at the bottom of the republican base is the group most dead-set on not raising the debt limit: No retreat, no surrender. But if these true patriots understood anything about the founding fathers they would know that the United States of America was built from compromise. It is what made America the pre-eminent democracy of the modern age.
The tradition has been held for the nearly 200 years since the Constitution officially created the Union. So here we are, teetering on the edge of national disgrace by two sides who refuse to do what is best for country, Instead, they obfuscate and demonize the other side, inflaming their bases in order to rationalize their intractable positions.
If only Ronald Reagan was alive, perhaps he might be able to talk to these republicans who refuse to accept that a compromise is the best deal available in politics.
“When I began entering into the give and take of legislative bargaining in Sacramento, a lot of the most radical conservatives who had supported me during the election didn't like it. "Compromise" was a dirty word to them and they wouldn't face the fact that we couldn't get all of what we wanted today. They wanted all or nothing and they wanted it all at once. If you don't get it all, some said, don't take anything,” Reagan said in his autobiography, An American Life. “I'd learned while negotiating union contracts that you seldom got everything you asked for. And I agreed with FDR, who said in 1933: 'I have no expectations of making a hit every time I come to bat. What I seek is the highest possible batting average.' If you got 75 or 80 percent of what you were asking for, I say, you take it and fight for the rest later, and that's what I told these radical conservatives who never got used to it.”
John Guzzon is editor of Modern Times Magazine.
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