Three charts tell you everything you need to know about the possible budget deal between President Obama and House Republicans this weekend.
The first chart comes from the liberal think tank Center on Budget and Policy Priorities, via Ezra Klein, and it shows the tax-hike vs spending-cut breakdowns for each of the last seven major budget deals, as passed, grouped by the president who signed them (82/84/87 for Reagan, 90 for Bush, 93/97 for Clinton, and 2011 for Obama). The chart clearly shows that each successive president has agreed to pass a budget deal that included more spending cuts and less tax hikes. The Obama budget deal shows over 75 percent of the deficit reduction coming from spending cuts.
The second chart comes from Americans for Tax Reform and it shows data from just the 1990 budget deal. But the ATR chart doesn’t just show the tax hikes and spending cuts agreed to. It also shows the tax cuts and spending hikes that were then actually implemented. And the data shown in the chart should give any Republican deep pause before signing off on a deal. While all of the tax hikes from the 1990 budget deal were implemented, many of the spending cuts were not. In fact, we ended up with a net spending hike. The same thing is guaranteed to happen this time around. As Ethics and Public Policy Center fellow James Capretta notes, all of the past budget deals that included cuts to Medicare spending were destined to fail because they did not fundamentally reform the program. The exact same is true for the Medicare cuts being offered by Obama today.
The third chart comes from The Heritage Foundation and it shows spending and revenue as a percentage of GDP since 1960. As today’s Washington Examiner editorial notes, if we keep taxes at current rates, revenues as a percentage of GDP will return to its post-Word War II average of 18 percent by 2018. But spending is set to keep rising beyond its current 24.7 percent high, to 26.4 percent by 2021. That is 6.1 points higher than the post-WW II 20.3 percent of GDP average. Spending cuts, not tax hikes, are the key to real debt reduction.
Around the Bigs
The Washington Examiner, Obama, GOP inching toward debt deal: Shortly after an hours long meeting with the congressional leaders of both parties, President Obama announced yesterday that he was close to making a deal with Republicans to cut the deficit by $4 trillion. “Nothing is agreed to until everything is agreed to,” Obama said. Lawmakers and their staffs will continue working through Friday and Saturday and Obama said he will host everyone at the White House again on Sunday “the parties will at least know where each other’s bottom lines are and will hopefully be in a position to then start engaging in the hard bargaining that’s necessary to get a deal done.”
Roll Call, Conrad Holds Off on Unveiling Budget: For the fourth week in a row, Senate Budget Committee chair Kent Conrad, D-N.D., failed to unveil his budget as he promised he would this week.
The Hill, House to vote on GOP legislation repealing light bulb efficiency standards: House Republicans introduced a bill yesterday that would repeal the incandescent light bulb ban Obama signed into law last year. A floor vote is expected next week.
The Wall Street Journal, Canada Has Plenty of Oil, but Does the U.S. Want It?: Canada has 175.2 billion barrels of proven oil reserves. For comparison, Saudi Arabia, the world leader has 262.6 billion barrels. But Democrats in Congress are making it more expensive for American consumers to access this oil.
The New York Times, I.R.S. Drops Audits of Political Donors: The deputy commissioner for services and enforcement of the Internal Revenue Service issued a memo yesterday ordering field offices to stop enforcing the gift tax on donations to 501c4 groups like Karl Rove’s Crossroads GPS. The memo did not say the IRS did not have the authority to make donors pay the gift tax on donations to these groups, but did admit that the law was unclear. The IRS will now begin to make a formal policy which will not be enforced retroactively.
The Wall Street Journal, More Vacancies at U.S. Malls: In another sign that the recovery has not gotten to small businesses, the vacancy rates at malls in the top 80 U.S. markets are at their all time highest recorded levels.
ABC News, Weapons linked to controversial ATF strategy found in Valley crimes: Weapons linked to the Obama administration’s Operation Fast and Furious gunrunning program have been turning up at crime scenes throughout the Phoenix area.
Rep. Michele Bachmann, R-Minn., became the first GOP candidate to sign The Family Leader’s Marriage Vow pledge Thursday. In addition to promising “personal fidelity to your own spouse,” the pledge also commits candidates to “legal advocacy for the federal Defense of Marriage Act” and “rejection of Sharia Islam.”
Pawlenty: It is a bit early but The New York Times is already asking, Will Republican Race’s First In Be the First Out? The Times breaks o real news but does analyze: “The voting will not open for at least six months, but Mr. Pawlenty knows that his performance at the Iowa Straw Poll on Aug. 13 — fair or not — will help determine whether his candidacy accelerates or lands in the annals of Republican presidential hopefuls like Elizabeth Dole, Lamar Alexander and Dan Quayle whose campaigns were extinguished here.” They are right. A poor showing at Ames would be devastating for Pawlenty’s chances.
<a href=”http://pajamasmedia.com/tatler/2011/07/07/someone-in-congress-knew-about-gunrunner-and-obama-signed-funding-for-it-into-law/” target=”_blank”>The PJ Tatler flags a page from the stimulus bill that suggests that Project Gunrunner, a.k.a. Operation Fast and Furious, was funded by Obama’s signature economic policy. If the stimulus did fund the program, the Obama administration will have an even harder time denying responsibility for it.
The New York Times has a glowing story claiming a new study on Oregon’s Medicaid program proves health insurance benefits the poor. But Cato’s Michael Cannon goes inside the study to show that Oregon’s Medicaid expansion raised health care spending, did not improve health out comes and did not reduce emergency room utilization.
Americans for Tax Reform‘s Ryan Ellis has posted a chart that every Republican member of Congress must read before voting on any debt deal. The chart breaks down the spending cuts that were promised in the 1990 budget deal vs the spending cuts that didn’t happen. The chart shows that not only were the agreed upon cuts never implemented, but they ended up being a net spending hike. Meanwhile, the deals tax hikes all happened on schedule.
ThinkProgress reports that house Republicans have discussed impeaching Obama should he ignore the debt limit and sell Treasury bonds citing the 14th Amendment. The left universally believes the impeachment of President Clinton was a boon to them politically and many of them are hoping Republicans will try the same tactic against Obama.
The Washington Post‘s Ezra Klein posts a graph compiled by the liberal think tank Center on Budget and Policy Priorities showing the tax hike vs spending breakdown of the last four major budget deals as passed. The graphs show that each successive budget deal has included less tax hikes and more spending cuts.
The Washington Monthly‘s Steve Benen has a post succinctly outlining the liberal line in the sand on a budget deal: All about the benefits. In other words, whatever budget deal that passes can cut doctor and hospital payments down to zero, but as long as Democrats can tell voters that they did not cut their “benefits” then the spending cuts are fine.