Republicans would like you to believe that, even though they plan to bail out and expand Obamacare, pass amnesty, ignore the immigration crisis, ignore the judicial crisis, and increase spending and debt, it’s worth being patient with them because … tax cuts!
This is why they are so upset with Sen. Rand Paul, R-Ky., for blowing their cover on their phony tax idea.
Record spending undermines ability to cut taxes
Either you do a tax cut or you don’t. The worst thing Republicans can do – the epitome of political malpractice – is to cut taxes but then worry about revenue, and in the process, raise taxes on some people.
We all know that the new revenue will come from raising taxes on the people who already pay the most in taxes, while the “tax cuts” will go to those who largely don’t pay them or those who even benefit off the tax code. They already promised to make the code more progressive.
Thus, if you are going to pursue tax cuts and you are worried about the deficit, the only path forward is to cut spending.
Yet, with this budget resolution, which will be used as the “reconciliation” vehicle for a tax bill, Republicans are actually increasing spending. Coupled with several other projects, they are blowing a massive hole in the budget over and beyond the final years of Obama. This naturally undermines their case for tax reform and their ability to make the bill a clean tax cut for everyone.
As a supply-sider, I’m in favor of accepting tax cuts in any form they are presented. But let’s not kid ourselves: We don’t live in 2001 anymore – the last time we pursued tax cuts – when there was a projected surplus.
Republicans already spent $130 billion more in FY 2017 than last year, and now they are passing a $36.5 billion unpaid-for supplemental. In addition, they are planning more bailouts for Puerto Rico and disaster spending without any long-term reforms or offsets coming down the pike, planning a massive bailout for Obamacare, throwing money at the opioid crisis they helped create with anti-market health care, and expanding SCHIP and community health centers (programs that should be eliminated in light of keeping Medicaid expansion and Obamacare).
Now they plan to stick in an extra $43 billion in Overseas Contingency Operations (OCO) funding in the FY 2018 budget resolution (S. Con. Res. 25) – the vehicle for the tax bill.
Not only does such a dynamic undermine the political and rhetorical case for tax reform, something that is needed to get the support of the public, it undermines the mechanics of an actual tax cut. GOP leaders have already made it clear that they fear the loss of revenue. Therefore, as we warned, they will pursue a tax cut that are a wash and wind up raising taxes on some families.
This, in a nutshell is Sen. Rand Paul’s opposition to the budget resolution. In order to bust the budget caps, the Senate bill allows for a loophole that funnels an extra $43 billion into the OCO account. While I support the rebuilding of the military (probably more so than Senator Paul does), he is right to call a foul on the OCO spending and the lack of any other cuts to the budget, not to mention the increases in spending in the supplemental bills.
What does OCO mean? It means our backward foreign policy of supporting Iranian proxies and the Baghdad and Kabul urban renewal programs. In other words, we are busting the budget so we can give Iranian proxies in Baghdad more money and hardware with which to behead the Kurds and to fund the Lebanese Armed Forces — which just joined in a coalition government with Hezbollah.
By busting the budget caps, we will necessarily get “tax reform” that is not worth the paper it is printed on. Jared and Ivanka are already running point on the details of the plan. Section 3018 of the budget resolution gives a shout-out to Ivankacare, and the plan will only get more progressive as the Democrats ratchet up their class warfare rhetoric.
That is because the GOP operates exclusively within the confines of the Democrat policy premise on any given issue. Then, in order to make up the further lost revenue from refundable tax credits, they will raise taxes on everyone else.
Therefore, anyone who is sanctimoniously accusing Rand Paul of scuttling tax cuts should look in the mirror. The only way to get genuine tax cuts worth the political capital expended is by cutting spending. And the only true way to cut spending and reduce the biggest tax burden on consumers is by repealing Obamacare and busting up the insurance cartel, not bailing it out.
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Daniel Horowitz is a senior editor of Conservative Review. Follow him on Twitter @RMConservative.
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