Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer Show,Jim Himes, U.S. Congressman (D-CT-4), discussed the budget negotiations ahead of Friday's deadline.
Giving the Republicans credit
The government will shut down on Friday if Congress can't pass a budget for this year, but Republicans are already touting a new long term fiscal plan to come on the heels of the current debate. Expected to be announced tomorrow, the GOP proposal would eliminate $4 trillion in spending over the next decade—ambitious, because Congress can't even agree on whether to cut $66 billion from the 2011 budget. To make matters more controversial, entitlement programs will be on the table. But that's actually welcome news for Democrat Jim Himes.
One of the terribly disheartening things about this crazy debate over the current budget is that it plays exclusively in that 12-13 percent of our outlays known as 'non-defense discretionary.' It's a profoundly dishonest debate over $10 billion here, $20 billion there. If Republicans have put together a proposal that, like the Simpson-Bowles commission, is about the whole budget, entitlements and the tax code, I applaud them for that. But I expect there will be plenty in there that Democrats like me will object to.
Representative Himes brought up last Fall's Simpson-Bowles commission, the deficit reduction team tapped by President Obama to make recommendations for fiscal sustainability. The commission's proposals were sobering and unpopular, but Congressman Himes said that we can't afford to ignore them any longer.
I'm on record as having said that if it came to a vote, I would vote in favor of the Simpson-Bowles proposal. I don't know how many members of Congress have said that. It's a package of bad news; there's nothing in Simpson-Bowles that's fun to talk about or that pleases constituents, but it's a comprehensive and relatively fair plan for fiscal sustainability. If Republicans can produce a budget for 2012 that has intelligent cuts, that doesn't hurt our most vulnerable populations, and makes investments in things like transportation and education that are absolutely critical, then yes, we're talking.
Military spending: The $800 billion elephant
It's the lack of "intelligent cuts" in the current budget debate that bothers Representative Himes. For Congress to take on programs like Head Start without looking for waste in military spending makes no sense, he said. In fact, Republican leadership is seeking more money for defense than the Pentagon has even requested. Himes said that was ridiculous amid all the calls for fiscal austerity.
We're spending almost $800 billion every single year on the Pentagon, on our security. That's more money than every other country on the planet combined spends. That's not a sustainable thing, neither are the now three combat actions around the world. If we're going to be serious about long term sustainability, we're going to have to do, frankly, what [Defense] Secretary Gates proposed, which is $130 billion in cuts to the defense apparatus. There's a lot of waste there. We need to rethink our role as the world's policeman, as 'Johnny on the spot,' because we can no longer afford it.
Lower corporate taxes, raise receipts
Long term sustainability means raising tax revenues, not just reducing spending, the Congressman said. Himes singled out the United States' poorly conceived corporate tax code, and the examples of major corporations like GE, which apparently didn't have to pay anything last year.
Our corporate tax code is a disaster. We have the second highest rate in the world, but there's a jungle of credits and deductions and loopholes that allow corporations to pay a much much lower effective rate, so you see things like corporations paying no or little taxes. In the spirit of Simpson-Bowles, we should reduce the corporate tax rate so it's more competetive internationally, but then get rid of loopholes deductions and credits that make such an unholy mess of the tax code.
'Social Security does not need to be the third rail'
Last Fall, the Simpson-Bowles commission proposed raising the Social Security tax cap above its current level of $106,000—that is, Americans don't pay Social Security taxes on any annual income above $106,000. That spares a significant population and a staggering amount of their income from feeling the full effects of Social Security costs.
Social Security will need to be addressed in any serious conversation about the budget, Himes said, and proposals like the ones made by Simpson-Bowles will have to be on the table.
Social Security does not need to be the third rail. In 1983, Reagan and Tip O'Neill raised the Social Security tax cap and made a couple other adjustments and it worked. It wasn't easy to do, but mechanically it's pretty easy to do...Simpson-Bowles recommended raising the cap as well as a very gentle raising of the retirement age over a period of about 40 years. I think those two ideas and perhaps others will be very much on table when we have discussion about Social Security.