(Image Source: DigitalVision, Matton Images)
Republicans like to point a finger at Democrats and call them the "tax and spend" party. But that finger is shaky, and they're standing on quicksand with that position, all things considered.
Not including the recent $1 trillion committed to bailing out the economic crisis, the United States federal budget deficit is $407 billion this year (up from $161 billion last year).
Why, then, would Republicans such as Senator John Cornyn (R-TX) continue to back the tax and borrow plans that contributed to this economic crisis, and oppose the pay-as-you-go plan credited for fixing the last deficit?
"The bill for John Cornyn's fiscal irresponsibility is now
coming due, and unfortunately, it's the taxpayers that are being stuck with
it," said Rick Noriega, who is challenging Cornyn for his seat, and who opposed the bailout. "John Cornyn's tax and borrow
policies aren't working for Texas families, especially when taxpayers are being
forced to pay out $700 billion to Cornyn's Wall Street contributors. That's
just plain irresponsible."
If you check Cornyn's history, he agrees that Republican tax cuts have been reckless and contributed to the deficit.
Here's a few pieces of support for that:
Cornyn Admitted Bush Tax Cuts He Supported Caused Deficits. During a 2005 interview, Cornyn admitted that Bush's tax cuts were responsible for increasing the deficit. Cornyn said, "Of course we knew we had economic stagnation and needed to stimulate the economy, and that's frankly the main reason why I supported the budget cuts -- excuse me, the tax cuts, which have led to some deficits…" [CNN, Inside Politics, 2/9/05]
Cornyn Voted for Increasing the Debt Limit by More Than $2.5 Trillion. John Cornyn voted to allow the government debt to grow by more than $2.5 trillion. [Roll Call 202, 5/23/03; Roll Call 213, 11/17/04; Roll Call 54, 3/16/06]
Cornyn Agreed That Republicans Had Done Too Much Wasteful Spending in Washington. Cornyn said, "I agree that Republicans have, unfortunately, been guilty of too much spending in Washington, wasteful Washington spending and we need to do better." [CNN, 9/16/07]
Cornyn Voted to Give $700 Billion to Wall Street Lobbyists for Biggest Bailout in History. John Cornyn voted to give Wall Street a $700 billion bailout after accepting nearly $4 million in campaign contributions from the financial industry. [H.R. 1424, 10/1/08, Center for Responsive Politics, 9/23/08]
After voting to for the bailout, Cornyn stated his opposition to
pay-as-you-go rules, which require that tax cuts and
certain spending increases must be offset by spending cuts or other tax
increases, preventing out-of-control spending.
Cornyn had previously voted no on the pay-as-you-go bill.
Pay-as-you-go, or PAYGO, is generally attributed with the financial success of the 90s. According to Media Matters:
. . .former Federal Reserve chairman Alan Greenspan and former Congressional Budget Office (CBO) director Dan L. Crippen have pointed to PAYGO as instrumental in establishing the fiscal discipline that gradually decreased the deficit during the 1990s and ultimately led to large surpluses.
. . .
Federal Reserve chairman Greenspan has cited PAYGO and the BEA budget rules in general as instrumental in establishing "a better fiscal policy" that ultimately led to "the brief emergence of surpluses in the late 1990s," as he stated during testimony before the Senate Banking Committee on April 21, 2005. Greenspan went on to assert that those surpluses led lawmakers to violate and ultimately abandon "the rules that helped constrain budgetary decision making earlier in the 1990s -- in particular, the limits on discretionary spending and PAYGO requirements." He added that the reinstatement of such rules "would signal a renewed commitment to fiscal restraint and help restore fiscal discipline to the annual budgeting process."
Unfortunately, with Republican fiscal policy set to "tax and borrow" the surpluses evaporated into deficit.
How did this happen?
It's a complicated discussion, but focusing on this one aspect (PAYGO), basically the PAYGO Law---which should be considered bipartisan since the first President Bush and also President Clinton worked so hard on it---expired in 2002, under the second President Bush. Republicans let it lapse and did not implement any measures along the lines of the PAYGO fiscal responsibility. (Source: Urban Institute and Brookings Institution, Tax Policy Center) Instead, our budget devolved into tax and borrow, leading to the huge deficits and economic crisis we have now.
In the Media Matters article, Greenspan is clear about this:
During later questioning by Sen. Debbie Stabenow (D-MI), Greenspan asserted that "one of the real problems we have had was allowing PAYGO to lapse in September 2002. ... Were we still under the PAYGO regime, which I thought worked very well, we would have fewer problems now."
The Tax Policy Center explains that there is a PAYGO of a sort in place now:
After Democrats won control of the Congress in 2006, the House of Representatives quickly re-instituted PAYGO and the Senate adopted a similar rule with the Budget Resolution for fiscal year 2008. Unlike the version passed in 1990, the new PAYGO is not a law. It is simply a procedural rule. If legislative changes were not fully paid for, the earlier law required a sequester of spending to make up the difference. The new rule does not.
This is what Cornyn and other Republicans oppose: spending within our means.
So again, one has to wonder why Cornyn would vote against fiscally responsible policies and then support measures that worsened the deficit?
Rick Noriega's Campaign asks, "Can you afford six more years of Cornyn?"
I don't think Texas, the United States, or I can stand six more years of Republican fiscal irresponsibility.
As I said before, the bailout has to be the first step. We must take a second step that outlines boundaries, such as PAYGO did, for responsible taxing and spending. Then we must consider the market, and how we discourage predatory and illegal speculation.
And Republicans say that as if it is a bad thing.
Recommended reading:
Austin American Statesmen, "Cornyn, Noriega differ on economic issues; Texas candidates for U.S. Senate split on bailout, taxes." Jason Embry, October 6, 2008.
Thank you! The whole idea of the "fiscal responsibility" of the Republican party has been impossible to take seriously since the deficit days of the 1980's.
Republicans have tagged Democrats as the "tax and spend" party for decades. If you ask me, at least "tax and spend" is fairly honest - everyone has to pay in, so you know where the money comes from. "Borrow and spend" - which I think more accurately reflects the practice, since it tends to be coupled with tax cutting - hides the cost, since it's not DIRECTLY hitting people in the wallet the way taxes do, and it's not really obvious how things are being paid for. (Oh wait, we do know now - by China. And ultimately, by us, and our kids, and our grandkids...)
Living beyond our means can clearly be disastrous at both the individual and national levels. PAYGO makes sense as both a law and a principle.
Posted by: Florinda | October 07, 2008 at 10:45 AM