No New Taxes? Then Take the Spending Challenge
Obviously the fiscal situation facing the country is bad. Deficits are massive; the debt is headed towards unprecedented territory; and the weak economic recovery could be derailed at any moment if credit markets get spooked about the U.S.’s fiscal prospects.
Yet still there are many politicians who don’t want to raise taxes at all (or in the softer version of the ‘no new taxes pledge’, don’t want to raise taxes on families making less than the poverty line…no wait…less than TWO HUNDRED AND FIFTY THOUSAND DOLLARS.)
Ok. Fine. Here is our spending challenge to all of you then. Assuming you acknowledge there is a problem—and how could you not—pick your fiscal goal. We recommend stabilizing the debt at 60% of GDP by 2018 here —still at levels well above historical averages, by the way. Or you could try to balance the budget by 2020. Or cut it in half in a few years. Take your pick – just believe it will be aggressive enough to stave off a fiscal crisis. Then show us how you’d get there without raising taxes.
There is nothing wrong with wanting to fix the problem by cutting spending; spending is the cause of the longer-term fiscal problems after all. But in our own attempts, we just can’t get to a reasonable debt level on the spending side of the budget alone. But please, show us how.
But the second part of the challenge is to agree that what you can’t get done through spending cuts will have to be fixed through revenues. It just doesn’t make sense to promise no new taxes, but not be willing to provide the spending cuts to avoid them.
There is a secondary argument that without dynamic scoring, projections don’t show the economic benefits of lower deficits and lower spending. So in the challenge, we’d even be willing to allow reasonable assumptions of positive economic effects…but the plan should include a trigger where automatic tax increases fill in the hole if the dynamic assumptions don’t materialize as promised, as a way to avoid exaggerated economic claims.
So it’s a pretty simple challenge. All you no new taxers (and no new taxers on families making less than $250k,) we’d love to see how we are going to cut enough spending to get the job done.
P.S. By the way, for those on the other side of the debate, we encourage you to take the tax challenge -- look at CBO's long-term budget projections, and show us how you can stabilize the debt without reducing entitlement spending.