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Conservatives Don’t Care About the Deficit—They Care About Protecting Their Own

Posted Monday, March 21, 2011 in Reporting by Mikhail Zinshteyn

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  • Conservatives Don’t Care About the Deficit—They Care About Protecting Their Own

Congressional leaders from both parties have put the finishing touches on a three-week extension to the federal budget, with $6 billion in spending cuts signed into law as part of a compromise before a more comprehensive budget agreement can be reached. The Treasury Department estimates that between April and late May, the government will hit the $14.3 trillion debt ceiling—half a trillion dollars below the latest GDP count by the Bureau of Economic Analysis.

While the temporary cuts in the three-week extension affect mostly non-controversial areas of spending, the run up to the stopgap demonstrates, once again, that much as conservatives might pretend to, they are uninterested in paring down the deficit. Instead, they seek to reduce spending to programs they do not like, regardless of their effect on the nation’s public debt.

Small programs that can save tens of thousands of lives are on the cutting block, like the Pacific Tsunami Warning Center in Hawaii that detected the tsunami caused by the 8.9 earthquake off the coast of Japan. Other cuts to programs that provide essential oversight aren’t spared, such as agricultural inspections that prevent food-borne illnesses from reaching Americans.

The Corporation for Public Broadcasting risks loses $50 million fund in the current Continuing Resolution, while an emergency session in the Rules Committee led the House to pass a bill stripping NPR of all its federal funding. CBP supports both NPR and television-based PBS. TPM reports Rep. Doug Lamborn (R-Colo.) introduced the hearing in the wake of the James O’Keefe video. Juan Williams, a former NPR journalist who was fired for making inflammatory remarks about Muslims, wrote in an op-ed he opposes public financing of NPR.

For every dollar spent on development programs and social welfare aid that affects the lower rungs, two dollars goes back to the economy. That means that investing in low-income people has good economic returns. After all, the poor cannot afford to save, while the wealthy, with their tax cuts, simply hoard and plumb the depths of rarefied investment strategies that only help them. Good, small-dollar investments like community development grants that support job training and community revitalization efforts would lose over half of its funding should House Republicans have their way.

The popular Head Start program, which provides pre-kindergarten education and health access to economically troubled neighborhoods, would have lost 15 percent of its funding had H.R. 1, the House Republican budget proposal, passed.

Danielle Ewen, director of child care and early education at policy think tank CLASP, explains the consequences of cutting a slither from a small fund that affects so many underprivileged families. “As a result, they would be forced to serve fewer children, operate programs for fewer days or hours per day, and put additional burdens on staff, which can limit the services received by families.”

Between 2009 and 2010, Head Start assisted 1.1 million children and pregnant women. The program employs 242,000 people, while an additional 1.3 million people volunteer, with a budget of $7.2 billion dollars excluding emergency stimulus appropriations.

The few billion that lawmakers eye for reductions are bound to sting families that rely on the programs and policy advocates who recognize such families often have little respite. Coupled with Republican spending priorities of the past decade, the cuts are hard to chew.

The conservative Heritage Foundation, using White House Office of Management and Budget numbers, estimates that since 2002, federal spending outpaced federal revenues after an era of budget surpluses under the Clinton administration. That dip coincided with the 2001 and 2003 Bush tax cuts. The chart below shows what the deficit would look like without those cuts.

CBPP deficit chart

SOURCE: Center on Budget Priority Policies

The debts accumulated from the stimulus bill to prop up the economy in times  of economic crisis are starting to shrink dramatically as the economy heats up. Meanwhile, the Bush tax cuts, and their assumed renewal, continue to eat away at federal receipts long after the economic downturn’s effects are slated to disappear.

Dean Baker, co-director of the Center for Economic and Policy Research, summed up the politics of deficit reduction in an email:

The concern about the debt has been invented by people who want to cut benefits for middle class and poor people… we could opt to be a much poorer country with no debt, but only a fool would take that option.

Protecting tax cuts has limited returns. A slate article by Daniel Gross from 2003 looked at marginal tax rates during the Kennedy, Reagan, and Clinton years, and determined an increase of two to three percentage points does not inhibit growth or productivity.

Under Clinton’s first term, new tax brackets for the wealthiest were introduced—one at 36 percent and the other at 39.3 percent. The result was interesting. The budget was balanced within half a decade while income inequality increased. The takeaway is that from a purely public debt point of view, increasing taxes on the rich helps the economy and doesn’t undermine their accumulation of wealth.

Tax cuts fill the pockets of the wealthiest—it is an end onto to itself. Some will compare Democrats’ protection of unions and collective bargaining rights to the Republicans’ push for tax cuts for the wealthy.

That’s not a fair comparison though. Unions do a lot to lift the wages of all workers in the states in which they are active. The most Americans can get out of the wealthy who received tax cuts is a large donation to a museum or park—or tens of millions to fund the GOP to continue eroding middle class benefits.

Mikhail Zinshteyn is a staff writer for Campus Progress. You can e-mail him at mzinshteyn@googlemail.com.

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