They’re baa-aack. Just like the evil spirits in Poltergeist ( the movie that spawned the phrase) the Gang of Six has seemingly come back from the dead. Moreover, it appears their goal is to haunt the American taxpayer.
The six Senators have put forth a lame-brained “plan,” or to be more specific, “set of vague ideas,” that they say will reduce the deficit. But why now? After all, Sen. Dick Durbin (D-IL), a member of the Gang of Six, said that the plan would not be ready in time to factor into the debt limit negotiations. “The Gang of Six plan has not been drafted nor has it been scored by the CBO – it’s not ready for prime time,” Durbin told The Hill.”
Seems curious that you would release something that isn’t ready now and has no hopes of being ready before the supposed August 2nd deadline. That is, until you realize that the entire purpose behind the release was to divert media attention from the passage of the Cut, Cap and Balance Act. While the mainstream media, President Obama, and a smattering of Senate Democrats were fawning over the Gang’s vague promises and unspecified cuts, House Republicans actually passed a concrete plan to reduce the deficit and raise the debt limit.
The craziest thing about this ruse is that even the few details that were provided paint a pretty scary picture. Given the list of bullet points that seemingly comprise the entirety of the “plan,” it looks like it only cuts $500 billion (despite providing no details on where they come from) and then establishing a “process for the committees in Congress to specify further savings.”
And that’s the plan at its most concrete. For instance, the plan promises savings by “spend[ing] health care dollars more efficiently in order to strengthen Medicare and Medicaid.” If it were as easy as this, wouldn’t be doing it already? All that description really tells me is that it punts on making much-needed adjustments to our largest drivers of spending.
Where the plan really induces some Poltergeist-style terror are its tax provisions. To be fair, the plan says it would eliminate the Alternative Minimum Tax (which Congress already patches every year) and reduce top individual and corporate tax rates, but, as with everything that comes out of Washington these days, the devil is in the details.
The plan says it would “reform, not eliminate, tax expenditures for health, charitable giving, homeownership and retirement” which somehow would “provide $1 trillion in additional revenue.” As Daniel Horowitz sarcastically asks, “You really mean to tell me that Chris Coons and Dick Durbin finally understand the Laffer Curve and the economic effect of cutting marginal tax rates?” Either that, or (as is more likely) the vague mandate to “improve the progressivity of the tax code” implies some sneaky tax hikes on things like capital gains.
Overall, the plan promises to provide $1.5 trillion in tax relief relative to the CBO March baseline. But this is nothing more than a dishonest budgetary trick designed to hide the real impact on taxpayers. “The CBO baseline assumes the expiration of tax relief, resulting in a $3.5 trillion revenue increase. As a result, the plan appears to include a $2 trillion revenue increase relative to a current policy baseline,” says the House Budget Committee in their analysis of the proposal. “If the $800 billion in tax increases from the new health care law are included, the plan appears to increase revenues by $2.8 trillion, without addressing unsustainable health care spending that is driving our debt problems.”
$2.8 trillion in tax hikes?!? The Gang of Six may be baa-aack, but if that’s the best they can do, they should have stayed gone.