The GOP is set to self-immolate. Which is fine for starting Arab Springs, but real bad for governing and gaining power in the United States.
Republicans have before them two options – one by House Speaker Boehner and the other by Senate Majority Leader Reid – that extend the debt ceiling without raising taxes.
Obama will sign either one in order to avoid a default, you can be sure. Republicans are in the drivers’ seat. And they’re going to throw it all away because the cuts aren’t enough.
Republicans are right to seek a deal that makes vast cuts in spending. President Obama has raised spending to a 25 percent of GDP, the highest ever.
But they are wrong to insist on their perfect world in which entitlement reform and discretionary spending cuts solve the deficit problem without any tax increases at all. Because unfortunately, the United States is part of the Real World.
Let me describe The Real World:
Republicans do not control the Senate or the presidency.
This is not because God made Obama president and Harry Reid majority leader. The American people did. And God is not going to interfere and make Obama and Reid do serious entitlement reform and major cuts to spending. If Republicans want these changes, they need to elect Republicans to at least one of these positions in 2012.
In the real world, the amount of taxes currently collected by the federal government, at about 14.5 percent of GDP, is currently at its lowest level since the presidency of Harry Truman. The last year of the Reagan administration, it was just above 18 percent. Did you know that?
That’s not to say that taxes shouldn’t be right where they are, and that Obama isn’t seeking an increase in taxes so he can keep spending as high as possible on the health reform law and other “investments” – aka “spending” – that are the things that really get him out of bed in the morning.
But, given that we have a divided government, the low historic rate does mean that Obama was not being unreasonable when he insisted some tax increases be part of the deal, and Boehner was not being a fool by agreeing.
Of course, tax hikes take place immediately, while spending cuts are mostly promises that can be broken. So Boehner was right to walk away when Obama started putting more tax increases on the table.
The relentless GOP focus on not raising any taxes puts Obama in a position to make dangerously large cuts to defense, which is for some reason being gutted while we fight several wars and face mortal threats abroad. By creating the ruthless imperative to slash spending so no tax increases are needed, Republicans are complicit in gutting the military and increasing the burden on our soldiers, who will be asked to do more with less.
The other part of The Real World is that if something isn’t done immediately, an economic catastrophe may occur. Forget whether checks stop going out August 2 or August 8. The markets are going to tank soon. Fear will breed more fear, and the expectation that the markets will decline will ignite a selling stampede.
And Obama, with the bully pulpit mostly his own, will successfully blame Republicans, because he never even got a bill he could veto or sign. Even though ultimately this is Obama’s doing, since he never really lifted a finger to try to reduce the deficit until recently choosing to move on other priorities like the health law instead.
Now Republicans have before them legislation that includes no tax increases. And they won’t take it. They’d rather go down in flames than wait to fight on a more favorable battlefield.
But really, who cares who is to blame and who will flame out politically. If Republicans don’t pass something that can move through the Senate and be signed, they may burn down the nation as well.