Sam Stein at Huffington Post:
Top Senate Republican Jon Kyl (R-Ariz.) insisted on Sunday that Congress should extend the Bush tax cuts for the wealthiest Americans regardless of their impact on the deficit, even as he and other Republicans are blocking unemployment insurance extensions over deficit concerns.
“[Y]ou should never raise taxes in order to cut taxes,” said the Arizona Senator during an appearance on Fox News Sunday. “Surely Congress has the authority, and it would be right to — if we decide we want to cut taxes to spur the economy, not to have to raise taxes in order to offset those costs. You do need to offset the cost of increased spending, and that’s what Republicans object to. But you should never have to offset cost of a deliberate decision to reduce tax rates on Americans.”
What’s remarkable about Kyl’s position here is that it appears to be philosophical. “You should never have to offset cost of a deliberate decision to reduce tax rates on Americans,” he said. Never! This is much crazier than anything you hear from Democrats. Imagine if some Democrat — and a member of the Senate Democratic leadership, no less — said that as a matter of principle, spending should never be offset. He’d be laughed out of the room.
Back in the real world, tax cuts and spending increases have the exact same affect on the budget deficit. This sort of comment is how you tell people who care about the deficit apart from people who are interested in exploiting fears of the deficit to shrink the size of government. It’s also the sort of comment that makes clear that the deficit commission’s work is doomed, even if they do go with three-quarters spending cuts. Democrats won’t accept an unbalanced product and Republicans won’t accept a balanced product.
Daniel Foster at The Corner, responding to Klein:
First of all, I’m not sure where the “gotcha” moment is. The most natura way to interpret Kyl’s statement is that a tax cut paid for by a tax increase is no tax cut at all. It’s a tax redistribution. Second of all, I’m sure if you asked Senator Kyl, he’d tell you thattax cuts should be offset — by spending cuts. That also seems a fairly natural inference to draw here.
On the point I’ve bolded, that Kyl’s position is “philosophical.” You’re damned right it is. So is Klein’s.
Klein says, “Back in the real world, tax cuts and spending increases have the exact same affect on the budget deficit.” Of course, and to a big-government technocrat, they have the same moral status.
Not so for conservatives. To put it plainly, conservatives tend to think you need a better reason to raise taxes, to grow government, and to infringe liberty than you do to cut taxes, shrink government, and increase liberty. Klein may think disagree with that, but it is not an incoherent position — or for that matter, a position without a rich and noble tradition.
UPDATE: Actually, these comments suggest Kyl is openly advocating some “starve the beast” unfunded tax cuts. The point about the contradictory nature of a tax cut “offset” by tax increases elsewhere holds. And I still bet Kyl’s preferred route would be to offsettax cuts with spending cuts. But it seems, failing that, he’s okay adding to the deficit. Maybe Senator Kyl should read some Kevin Williamson.
To my mind, Kyl’s remarks were every bit as ridiculous as House Minority Leader John Boehner (R-Ohio) comparing the financial crisis to “an ant,” or Rep. Joe Barton (R-Texas) apologizing to BP. Kyl’s entire defense was sheer nonsense.
Bush’s tax cuts, which failed miserably in their stated goal of producing robust economic growth, also failed to keep the balanced budget Clinton left gift-wrapped on Bush’s desk. Kyl insists we should keep the failed policy in place, which in and of itself is a reminder of how truly bizarre the Republican approach to the economy really is.
But for all the talk about how desperate Republicans are to lower the deficit, when asked how the GOP would pay for $678 billion in tax cuts, Kyl said what he actually believed: he wouldn’t pay for them at all. Spending requires budget offsets, tax cuts don’t. Indeed, in Kyl’s confused mind, one should “never” even try to pay for tax cuts.
It’s quite a message to Americans: Republicans believe $30 billion for unemployment benefits don’t even deserve a vote because the money would be added to the deficit, but Republicans also believe that adding the cost of $678 billion in tax cuts for the wealthy to the deficit is just fine.
The lesson couldn’t be any more obvious: the GOP’s economic agenda is a pathetic charade. Kyl and his cohorts failed with Bush’s tax cuts, failed to prevent massive deficits, and failed when given a chance to set things right. That one of the Senate’s most powerful Republicans wants to go right back to the policies that didn’t work, and put the tab on future generations, is, as Jay Bookman put it, “both very telling and very worrisome.”
David Dayen at Firedoglake:
The ultimate example of this deficit fraudulence comes with the cuts to the military budget that the Pentagon and the political establishment have talked a good game about of late. Conservatives nod their head, rhetorically, but in the end, they work as hard as possible to maintain outdated weapons systems.
The White House has jumped on Kyl’s comments about tax cuts never needing to be paid for, at least. But you could spend the rest of your life pointing out this misinformation and never catch up to it all.
Derek Thompson at The Atlantic:
The statement “You should never raise taxes in order to cut taxes,” is masterful in its internal logic. Raising taxes to cut taxes … how paradoxical, and absurd!
But tax cuts don’t pay for themselves. Renewing the entire 2001/03 tax cut will add more than $3 trillion to our debt/ Obama’s plan would shave off about $700 billion. So if you’re a true deficit hawk suggesting alternatives, you’ve got a few choices. You can start looking for $700 billion in offsets from spending cuts, tax increases, or tax expenditure cuts. Or you can implicitly acknowledge that you were never really serious about that deficit thing anyway. But Republicans’ intellectual slavishness to tax cuts as the Alpha and Omega of public policy is just exhausting and sad at this point.
Leaving aside Gibbs’ rich v. poor rhetoric, the real mistake here is the same one that Republicans made during the Bush years when they cut taxes without cutting spending and, in the process, added to the budget two wars and a trillion dollar Medicare prescription drug benefit program. The consequences were inevitable; in the course of eight years, Bush and the GOP added to the national debt the same amount that had accumulated during the previous 212 years of the Republic. Now, we’re caught in a debt cycle that will have unforesable consequences in the future.
I happen to agree with Kyl that the Bush tax cuts should be extended. Raising taxes in the middle of an anemic economic recovery that seems as if it could turn into another recession at any money strikes me as a monumentally stupid idea. At the same time, though, it seems to me that Republicans would sound much more credible on issues like this if they came out and identified spending cuts that could be made to offset the tax revenue that would be lost. Otherwise, they’re just making the same mistakes all over again.
UPDATE: Paul Krugman