Week's Best Word: Flimflammery
It was Dana Milbank who used it but he was clearly referencing Paul Krugman's classic 2010 column The Flimflam Man, for many people the introduction to the now infamous Paul Ryan. Friday, Krugman re-introduced his readers to the term, again, in reference to Ryan: After the Flimflam. This time it's the new/old Ryan so-called "budget" Krugman is targeting, which he recognizes not only "isn't serious" but is "essentially a cruel joke." Back in 2010 Krugman denounced his budget/roadmap as "obviously fraudulent: huge cuts in aid to the poor, but even bigger tax cuts for the rich, with all the assertions of fiscal responsibility resting on claims that he would raise trillions of dollars by closing tax loopholes (which he refused to specify) and cutting discretionary spending (in ways he refused to specify)... Since then, his budgets have gotten even flimflammier... The good news is that Mr. Ryan’s thoroughly unconvincing policy-wonk act seems, finally, to have worn out its welcome. In 2011, his budget was initially treated with worshipful respect, which faded only slightly as critics pointed out the document’s many absurdities. This time around, quite a few pundits and reporters have greeted his release with the derision it deserves."
Yes, this time, Krugman isn't alone in his denunciation of Ryan's anti-Serious Budget. Even very conservative Kentucky Congressman Hal Rogers, Boehner's Chairman of the House Appropriations Committee, said Ryan "cuts too much", especially given how much Republicans have slashed discretionary spending in the last two years ($100 billion already). Rogers knows Boehner would kick him out of his committee chair if he voted NO, so he says he'll vote yes, "reluctantly," putting his own career and ability to raise money from wealthy donors ahead of the interests of his own constituents. And Greg Sargent, at the Washington Post says Ryan is making Mitt Romney look like Robin Hood by comparison.
The nonpartisan Tax Policy Center has just completed its analysis of the Paul Ryan budget, and it confirms once again just how regressive the GOP fiscal vision really is-- and how absurd GOP intransigence on revenues remains. The key finding:Now, back to Krugman's column, which emphasizes that the really serious way to deal with the economic problems that ail the country would be to turn to the one serious budget that has been introduced so far-- the Back to Work Budget from the Congressional Progressive Caucus.
The Tax Policy Center estimates that cutting individual rates to 10 percent and 25 percent, repealing the Alternative Minimum Tax and the tax increases included in the Affordable Care Act, and cutting the corporate rate from 35 percent to 25 percent would add $5.7 trillion to the deficit over the next decade. Thus, if House Republicans want to cut these taxes and still collect the revenues they promise, they’d have to raise other taxes by $5.7 trillion.
In other words, to pay for these tax cuts, the Ryan plan would require nearly $6 trillion in new revenues generated by closing loopholes and deductions. TPC’s Howard Gleckman says it is “hard to imagine” how that sum could be generated, which is to say, it is “hard to imagine” how tax cuts of this size would be paid for.
But there’s another point to be made here. The Ryan plan requires Republicans to find $5.7 trillion in new revenues via loophole closing to pay for these enormous tax cuts, which would hugely and disproportionately benefit the wealthy. But Republican are not willing to agree to cede one-tenth that amount in new revenues to reduce the deficit, to get some of the entitlement cuts they say they want, and to stop the sequester. Remember, Obama’s deficit reduction plan asks for $580 billion in new revenues in exchange for over $900 billion in spending cuts. Obama’s revenue ask is one-tenth the $5.7 trillion Republicans are willing to scrounge up in new revenues to pay for the Ryan plan’s tax cuts. But that one-tenth is too much, even though it would give Republicans the spending cuts they want and would stop the sequester Republicans have said is a threat to the country’s military and economy.
...The tax cuts described in Ryan’s budget would generate a huge windfall for high-income taxpayers. On average, households would get a cut of $3,000. But those in the top 0.1 percent of income, who make $3.3 million or more, would get a whopping $1.2 million on average-- a 20 percent increase in their after-tax income.
By contrast, middle-income households would get an average tax cut of about $900. Those in the bottom 20 percent (who make $22,000 or less) would get $40 and one-third of them would get no tax cut at all.
We could definitely do worse than the Senate Democratic plan, and we probably will. It is, however, an extremely cautious proposal, one that doesn’t follow through on its own analysis. After all, if sharp spending cuts are a bad thing in a depressed economy-- which they are-- then the plan really should be calling for substantial though temporary spending increases. It doesn’t.
But there’s a plan that does: the proposal from the Congressional Progressive Caucus, titled “Back to Work,” which calls for substantial new spending now, temporarily widening the deficit, offset by major deficit reduction later in the next decade, largely though not entirely through higher taxes on the wealthy, corporations and pollution.
I’ve seen some people describe the caucus proposal as a “Ryan plan of the left,” but that’s unfair. There are no Ryan-style magic asterisks, trillion-dollar savings that are assumed to come from unspecified sources; this is an honest proposal. And “Back to Work” rests on solid macroeconomic analysis, not the fantasy “expansionary austerity” economics-- the claim that slashing spending in a depressed economy somehow promotes job growth rather than deepening the depression-- that Mr. Ryan continues to espouse despite the doctrine’s total failure in Europe.
No, the only thing the progressive caucus and Mr. Ryan share is audacity. And it’s refreshing to see someone break with the usual Washington notion that political “courage” means proposing that we hurt the poor while sparing the rich. No doubt the caucus plan is too audacious to have any chance of becoming law; but the same can be said of the Ryan plan.
So where is this all going? Realistically, we aren’t likely to get a Grand Bargain any time soon. Nonetheless, my sense is that there is some real movement here, and it’s in a direction conservatives won’t like.
As I said, Mr. Ryan’s efforts are finally starting to get the derision they deserve, while progressives seem, at long last, to be finding their voice. Little by little, Washington’s fog of fiscal flimflam seems to be lifting.