During April, May and June, House Majority Leader Eric Cantor (R-Va.) regularly excoriated President Barack Obama for failing to embrace the Simpson-Bowles plan, or at least the principles behind that plan.
Now, Obama has put on the table the foundation of a plan that not only embraces those principles but goes one step further with the promise of sweeping tax reform that could accomplish a raft of long-standing goals of market-oriented economists by reducing tax rates and simplifying the code.
The formula of the Simpson-Bowles plan, which was embraced by strong conservative Sens. Tom Coburn (R-Okla.) and Mike Crapo (R-Idaho) and ex-Sen. Judd Gregg (R-N.H), was three parts spending cuts for one part tax increases and is the formula Obama has put forward for a giant leap toward stabilizing our debt situation over the long term.
If that formula prevailed — and especially if it took into account the American economy’s current deep weakness by making significant tax cuts (like the payroll tax) for the next year and coupled that with an infrastructure bank based on a public-private partnership, a pledge for serious cuts in the growth of all areas of spending over the next 10 years and a formula like the Domenici-Rivlin commission’s “save-go” to lock in the pledge — it would almost certainly result in a leap in confidence by the markets and a big plus for the economy and American workers.
And it would, in one fell swoop, accomplish a series of goals that conservatives have sought for decades.
It is now clear that Cantor, Senate Minority Leader Mitch McConnell (R-Ky.) and their allies don’t want that kind of outcome. Although McConnell on Sunday paid lip service to dealing with the debt and deficits, he reiterated that his No. 1 goal for 2012 is to make Obama a one-term president. A blockbuster, bipartisan debt plan that aims for the middle, as the Simpson-Bowles plan and the framework of the Senate “gang of five” do, would work against that goal.
It might well be true that the votes are not there in the House, or perhaps the Senate, for such a deal — that the House Republicans are now so captured by their rigid extreme that any plan that includes any revenue component won’t make it through. In times like these, where a weak economy could be sent into a serious tailspin by gridlock and an unprecedented breach of the debt limit, leadership should take on those forces head-on — not encourage and incite them, as Cantor and McConnell have done, or just capitulate to them, as Speaker John Boehner (R-Ohio) appears to be doing.
As Rep. Paul Ryan’s (R-Wis.) budget demonstrates clearly, solving the debt problem through spending cuts alone is a nonstarter. Ryan’s plan — which involves draconian cuts to discretionary domestic programs such as food safety, scientific research and homeland security, along with huge cuts in Medicaid and the radical transformation of Medicare — adds trillions to the debt and doesn’t balance the budget for decades.
Ryan’s plan, the best there is to show how to achieve fiscal stability through spending alone, nonetheless violates for decades the provisions of the balanced budget amendment to the Constitution endorsed by all 47 Senate Republicans.