On tax cuts for the rich, spending cuts and cuts to Social Security, Medicare and Medicaid?
Let’s look at cuts to Social Security, Medicare and Medicaid first:
Here’s what he was quoted as saying yesterday:
He said he hoped negotiations in the remaining weeks of the lame-duck session could produce agreement on “top line numbers” for spending cuts and new revenue and “some big ideas to reform Social Security, Medicare and Medicaid.”
Now I don’t know about you but I don’t think those big ideas to reform Social Security, Medicare and Medicaid Jim Himes is looking for include making those programs more generous. It’s pretty clear he wants to cut them back – after all, he is looking for “spending cuts.”
He is on record as a big supporter of Simpson-Bowles.
Here’s what Paul Krugman says about Simpson-Bowles:
So, a public service reminder: Simpson-Bowles is terrible. It mucks around with taxes, but is obsessed with lowering marginal rates despite a complete absence of evidence that this is important. It offers nothing on Medicare that isn’t already in the Affordable Care Act. And it raises the Social Security retirement age because life expectancy has risen — completely ignoring the fact that life expectancy has only gone up for the well-off and well-educated, while stagnating or even declining among the people who need the program most.
Now let’s look at tax cuts for the rich:
In the same article, Himes is quoted as hoping that an agreement could be worked out that would “encourage Congress to continue the Bush tax cuts currently in effect.”
And remember, Simpson-Bowles, which he so ardently supports, wants to cut marginal rates!
Himes said he supports extending the tax cuts for the middle class and agrees the wealthy should contribute to deficit reduction, but he won’t say where he would specifically draw the line. He said he disagrees with the approach of simply allowing rates to rise, favoring a comprehensive tax code overhaul instead.
So he doesn’t agree with President Obama and Nancy Pelosi on raising taxes for the rich. He wants to wait for an overhaul of the tax code. This is the ultimate example of kicking the can down the road. And it fits in perfectly as a tactic to avoid offending rich friends and supporters.
As for “spending cuts” that Jim Himes is hoping for, let me quote Robert Reich:
…The best way to generate jobs and growth is for the government to spend more, not less…
Deficit hawks routinely warn unless the deficit is trimmed we’ll fall prey to inflation and rising interest rates. But there’s no sign of inflation anywhere. The world is awash in underutilized capacity As for interest rates, the yield on the ten-year Treasury bill is now around 1.26 percent – lower than it’s been in living memory.
In fact, if there was ever a time for America to borrow more in order to put our people back to work repairing our crumbling infrastructure and rebuilding our schools, it’s now.
Public investments that spur future job-growth and productivity shouldn’t even be included in measures of government spending to begin with. They’re justifiable as long as the return on those investments – a more educated and productive workforce, and a more efficient infrastructure, both generating more and better goods and services with fewer scarce resources – is higher than the cost of those investments..
So can we please stop obsessing about future budget deficits? They’re distracting our attention from what we should be obsessing about — jobs and growth.
Response from Jim Himes’ spokesperson:
In the Congressman’s advocacy for balanced deficit reduction, he has been very clear about two things: 1) We absolutely must reform Medicare and Social Security to make them sustainable and do so in an equitable and fair way. He won’t support a plan that hurts current beneficiaries or doesn’t protect the most vulnerable recipients from cuts. In fact, the Simpson-Bowles plan the Congressman supports contains a specific increase in Social Security benefits for the most vulnerable seniors. 2) The wealthy should contribute more to deficit reduction. He thinks it is probably smarter to eliminate loopholes before increasing rates, but he’s willing to consider a variety of proposals.