The best deficit fix: Do nothing
Repairing the federal budget might seem impossible, says David Leonhardt in The New York Times, but Congress can shrink the deficit dramatically without taking any action at all
In our political culture, tax increases have become "unthinkable," says David Leonhardt in The New York Times, "even to pay for benefits people want." Yet we're facing gigantic — and growing — budget deficits that will remain "frighteningly large" over the next decade unless we slash spending and raise taxes. President Obama is pushing tax reform to make the affluent pay more, but "while those increases will certainly help, they're not enough." The Republican solution is "even fuzzier," with calls for cutting taxes for the wealthy, and eliminating mysterious, unidentified tax breaks at the same time. So what's the solution? Our "best hope for deficit reduction" may be for Congress to do nothing at all, and simply let all the Bush tax cuts expire on Dec. 31, 2012. Here, an excerpt:
If Mr. Obama wins re-election, he could simply refuse to sign any budget-busting tax cut for the rich — who, after all, have received much larger pretax raises than any other income group in recent years and have also had their tax rates fall more. Republicans, for their part, could again refuse to pass any partial extension. And just like that, on Jan. 1, 2013, the Clinton-era tax rates would return. This change, by itself, would solve about 75 percent of the deficit problem over the next five years.