If you listen to John Boehner or take a look at any of his recent proposals on the economy, you’ll notice that they’re either not particularly serious – Repeal health care reform, fire Summers and Geithner – or are just not new – 2008 spending levels, full extension of the Bush tax cuts. What they signal is a genuine lack of seriousness and focus on political bromides on one hand, and a lack of new ideas on the other.
Let’s take a look at Boehner's ideas from today, as discussed on Good Morning America:
Idea 1 - Move next year’s non-security discretionary spending to 2008 levels. He doesn’t actually specify his cuts. I get four immediate points that make this idea laughable:
1) I don’t think you’ll find any economist who believes that the difference between 2008 levels and the current levels or next year’s levels are actually causing economic problems in the present. From an economic perspective, America’s deficit next year is relatively meaningless. Medium and long term deficits and debt are important – they’re what drives bond markets, inflation, etc – and to address those, you have to address entitlements and defense spending.
2) Boehner says this change will save $100 billion – my math gets me to $8 billion ($530 in 2011 according the budget, $522 in 2008). Either way, next year’s deficit is over $1 trillion. So it’s relatively inconsequential savings.
3) President has already done something in this spirit, with his three year non-security discretionary spending freeze, so Boehner’s not making an argument that’s actually any different from the man he says is spending us off a cliff.
4) What was so great about the economy in 2008? Didn’t the worst economic downturn in over two generations start in 2008? Why should we do things like they were that year? Next thing Boehner’s going to tell us is that we should have the financial system we did in 2008. (Oh, wait.)
Idea 2 - Freeze current tax levels for the next two years. By this, he means extend the full Bush tax cuts, including for those making above $250,000/year. Keeping the full Bush tax cuts for two years more than eliminates any savings that his spending cut creates, so it’s clear that his interest is more in the tax cuts than in reducing deficits. Of course, this is not a new idea, it’s a really old idea. I haven’t heard an explanation as to why this tax cut, as opposed to, say, the ones the President is proposing.
Let’s take a look at the President’s ideas:
$50 billion in infrastructure – roads, bridges and runways – plus financing an infrastructure bank.
Expand and make permanent the R&D tax credit.
Allow companies to fully deduct qualified capital investments through the end of 2011
Permanently extend the tax cuts for those making under $250,000.
Pass tax cuts and expand credit to small business.
Make the American Opportunity Tax Credit for college permanent.
People may disagree with these ideas, or think there are better ones out there - the only criticisms I've really heard is that they’re too small (obviously not an argument from the right), and that they can’t pass Congress before the elections. The reality is, though, these are real ideas, and, while they are obviously offered in a political context, they are real policy initiatives and not bromides. Plus, of these ideas, the business tax credits and cuts, as well as the permanence of the tax cuts for the middle class, should in no way be objectionable to conservatives – in fact, the deduction of capital investments is a conservative favorite.
So, here’s the reality. There is one set of real ideas, and another set of bromides. John Boehner said on Good Morning America that he was open to the President's ideas – that's almost certainly not the case two months before an election. What he has yet to do is produce a set of real ideas of his own.
For more, take a look at NDN's Analysis of the Boehner Plan.
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