THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING
Scot Lehigh

Living in an anti-tax fantasy land

By Scot Lehigh
Globe Columnist / May 18, 2011

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SENATE MINORITY Leader Mitch McConnell likes to portray himself as a serious adult ready to work in bipartisan fashion to solve the nation’s fiscal problems. Certainly that’s the kind of leadership this country needs.

But is McConnell really comporting himself like that kind of leader?

Speaking to PBS’s Jim Lehrer last week, the Kentucky senator insisted, yet again, that overspending had caused the federal government’s fiscal plight. “We don’t have this problem because we tax too little,’’ he averred. “We have it because we spend too much.’’

Actually, virtually every even-handed look at the current or long-term deficit arrives at a more complex conclusion. To wit: The decade-long path from surpluses (both real and projected) to deficits has been caused by a recessionary economy, by overspending, and by a succession of tax cuts.

An April report by the nonpartisan Pew Fiscal Analysis Initiative concluded that policy changes drove about two-thirds of the swing from the 10-year surplus the Congressional Budget Office once projected to the decade-long accumulation of red ink, which has left us some $10 trillion in the hole. Of those policy changes, spending increases accounted for 60 percent, while tax cuts were responsible for 40 percent.

“Both spending hikes and tax cuts contributed to the situation that we are in today,’’ says Ingrid Schroeder, director of the Pew initiative. “That, coupled with lost revenue with regard to the recession, has had a significant impact.’’

Over the next couple of decades, meanwhile, “the major drivers of the debt are going to be Medicare, Medicaid, to a lesser degree Social Security, and interest on the debt,’’ she said.

When it comes to Medicare, a significant part of the increased spending will result from millions of aging baby-boomers joining the Medicare rolls, notes Len Burman, former director of the Tax Policy Center and now a professor of public administration and economics at Syracuse University.

“It is like saying the aging of the baby boomers is a spending problem,’’ he says.

As with the last 10 years, the next decade would also look very different absent the tax cuts. According to the Center on Budget and Policy Priorities, under current policy and current tax rates, the nation will accumulate $12.6 trillion in additional debt between 2009 and 2019. Without the tax cuts, the total amount of new debt would drop by $5.4 trillion, or 43 percent.

Those simply aren’t the kind of complexities one hears from McConnell, however. When Lehrer noted that President Obama wants to let the tax cuts for upper earners expire at the end of next year, the minority leader vowed that Republicans would oppose any tax hike — and again assigned the deficit to overspending.

“Most of it is clearly — I think all of it, frankly — is attributable to spending too much, not taxing too little,’’ he insisted.

How did McConnell arrive at his conclusion? Aides can’t produce any report or analysis to backstop his claim. Indeed, communications director Don Stewart maintained that McConnell wasn’t blaming the entirety of the deficit on spending.

“I don’t think he has made that case,’’ said Stewart, a stance he maintained even after I read him McConnell’s quotes, um, making that case.

Actually, McConnell’s motivation is transparently political. Make the deficit sound like it’s all a spending problem and the logical conclusion is that it can — and should — be solved simply by cutting spending. Acknowledge that tax cuts have also played a significant role, and then the logical solution is the one that both of the recent deficit panels have recommended: a mix of spending cuts and revenue increases.

In other words, McConnell is putting anti-tax ideology ahead of clear-eyed analysis. And let’s be fair: In pretending the deficit can be tamed without hitting families making less than $250,000, President Obama is engaged in a deception of his own.

The problem for McConnell is the same one that now bedevils House Budget Committee chairman Paul Ryan, whose long-term spending framework protects the Bush-era tax cuts, but only at the cost of Medicare reductions the public overwhelmingly rejects. At some point, rhetoric meets reality. And when it does, the truth has consequences.

Scot Lehigh can be reached at lehigh@globe.com.