They’re baa-aack. Just like the evil spirits in Poltergeist ( the movie that spawned thephrase) the Gang of Six has seemingly come back from the dead. Moreover, itappears their goal is to haunt the American taxpayer.
The six Senators have put forth a lame-brained “plan,” or tobe more specific, “set of vague ideas,” that they say will reduce the deficit. Butwhy now? After all, Sen. Dick Durbin (D-IL), a member of the Gang of Six, saidthat the plan would not be ready in time to factor into the debt limitnegotiations. “The Gang of Six plan has not been drafted nor has it been scoredby the CBO – it’s not ready for prime time,” Durbin told TheHill.”
Seems curious that you would release something that isn’tready now and has no hopes of being ready before the supposed August 2nddeadline. That is, until you realize that the entire purpose behind the releasewas to divert media attention from the passage of the Cut, Cap and Balance Act.While the mainstream media, President Obama, and a smattering of SenateDemocrats were fawning over the Gang’s vague promises and unspecified cuts,House Republicans actually passed a concrete plan to reduce the deficit andraise the debt limit.
The craziest thing about this ruse is that even the fewdetails that were provided paint a pretty scary picture. Given the listof bullet points that seemingly comprise the entirety of the “plan,” it lookslike it only cuts $500 billion (despite providing no details on where they comefrom) and then establishing a “process for the committees in Congress tospecify 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 andMedicaid.” If it were as easy as this, wouldn’t be doing it already? All thatdescription really tells me is that it punts on making much-needed adjustmentsto our largest drivers of spending.
Where the plan really induces some Poltergeist-style terrorare its tax provisions. To be fair, the plan says it would eliminate theAlternative Minimum Tax (which Congress already patches every year) and reduce topindividual and corporate tax rates, but, as with everything that comes out ofWashington these days, the devil is in the details.
The plan says it would “reform, not eliminate, taxexpenditures for health, charitable giving, homeownership and retirement” whichsomehow would “provide $1 trillion in additional revenue.” As Daniel Horowitzsarcastically asks, “You really mean to tell me that Chris Coons and DickDurbin finally understand the Laffer Curve and the economic effect of cuttingmarginal tax rates?” Either that, or (as is more likely) the vague mandate to “improvethe progressivity of the tax code” implies some sneaky tax hikes on thingslike capital gains.
Overall, the plan promises to provide $1.5 trillion in taxrelief relative to the CBO March baseline. But this is nothing more than adishonest budgetary trick designed to hide the real impact on taxpayers. “TheCBO baseline assumes the expiration of tax relief, resulting in a $3.5 trillionrevenue increase. As a result, the plan appears to include a $2 trillionrevenue increase relative to a current policy baseline,” says the House BudgetCommittee in their analysis of the proposal. “If the $800 billion in tax increases from the newhealth care law are included, the plan appears to increase revenues by $2.8trillion, without addressing unsustainable health care spending that is drivingour debt problems.”
$2.8 trillion in tax hikes?!? The Gang of Six may bebaa-aack, but if that’s the best they can do, they should have stayed gone.