Imagine for a moment a private financial services firm caught running a ponzi scheme in which public funds were spent on lavish projects for the manager’s friends. Astoundingly, instead of incarcerating the perpetrators and returning the money to the investors, the Securities and Exchange Commission (SEC) negotiates with the criminals. That’s right. The SEC collaborates with the criminal executives to force the public to contribute more money to the institution and leave it there longer, in order to rectify the scheme and achieve solvency. Sounds perverse and preposterous? Well, some Republican senators are concocting a similar approach to “solving” the budget crisis created by the Democrats.
Last December, Senators Tom Coburn and Mike Crapo, two reliable conservatives, supported the Debt Commission’s report which would attempt to cut the budget deficit by raising $3.3 trillion in taxes over 10 years. Although Coburn admitted that he would have authored a different proposal, he supported the full package because “our country deserves us to sacrifice like the call we’re going to make to everyone else to sacrifice to accomplish what we have to accomplish and that is to get out of this hole.”
Unfortunately, the good Senator from Oklahoma has shown that he is so committed to tackling the deficit that he is willing to cut a deal with the Democrats, even if that means increasing taxes. The Hill reports that Coburn, along with Mike Crapo and Saxby Chambliss, are in negotiations with Democrat Senators Conrad, Durbin, and Warner, to work out a long term solution which would leave everything on the table, including tax increases. They are now being referred to as the Gang of Six. Earlier this month, the Wall Street Journal reported that the same band of lawmakers were considering a bill that would trigger increases in revenue and reductions in spending if an agreement is not reached in the near future:
“The tax-writing committees would be given two years to overhaul both the individual and corporate tax codes, with general instructions to close tax breaks and minimize or eliminate tax deductions while lowering tax rates. The committees would be given a target for additional revenues to be raised by the new code. The deficit commission’s version of tax reform would net $785 billion in additional revenues over 10 years.
If Congress failed to enact the tax code overhaul, the legislation would mandate an across-the-board tightening of tax deductions to meet the higher target.”
While we applaud Senator Coburn’s alacrity in trying to cut the budget deficit and tackle entitlement reform, he is misguided in his eagerness to empower those who plundered the treasury with the keys to ‘fix’ it. Let’s be clear. There is no revenue problem. The budget crisis is a result of decades’ worth of greedy leftist politicians who squandered tax payer dollars on programs and handouts to special interests. These policies and politicians need to be vitiated; not the hard earned money of the American people.
Cutting the deficit is not an ends to itself. It is a means to reinstate our government back to its constitutional mandate. Raising taxes for the short-term objective of cutting the deficit only empowers the very same criminals to misuse and misappropriate the public funds once again. Besides, stymieing economic productivity through tax increases is a counterintuitive way of balancing the budget in the long run. Coburn’s incessant calls for sacrifices on the part of the American people are understandable, but it should be the Democrats and their indissoluble rent-seekers who need to sacrifice. Starve the beast, we say!
Parenthetically, this is the reason why a balanced budget amendment is not the most effective way to limit government. Many states have such requirements, and in addition to the accounting gimmicks that are used to circumvent the law, Democrats use budget laws as excuses to raise taxes. The best way to inhibit unlawful government is to enact a spending limit (say 19% of GDP). This will preclude the left from focusing on the revenue side of the ledger. It’s not about deficit reduction; it’s about government reduction.
A similar disconcerting aspect of the Debt Commission’s report that these Republicans are supporting is Social Security reform. While conservatives adulate politicians for tackling entitlement reform, they do so on the assumption that the reforms will promote more liberty and limit government. Unfortunately, the Debt Commission made no reference to reforms that would empower the citizen to control his or her own retirement. They only recommended raising the retirement age, raising payroll taxes, means-testing benefits, or raising the exemption level. Sadly, these Republicans are supporting some of the commission’s ideas as bold and courageous solutions to entitlement reform.
Let’s be clear again. The objective of entitlement reform is not to make a Democrat-run program solvent. Our objective vis-à-vis entitlement reform should be focused on returning the wealth to the American worker and taxpayer by promoting more liberty and prosperity. There can be no discussion of raising the retirement age without offering young workers private accounts or an option to opt out.
There is no problem with diminishing Social Security benefits or raising the retirement age and making it more sustainable for those who choose to participate. But how can we compel every American to contribute a large percentage of his income to a plan that will be means-tested and administered at the mercy of corrupt politicians? Are we going to continue to control when a person can retire, perhaps until age 70? Are we going to grant the very crooks who purloined the trust fund-the power to control more of our retirement funds? Are we going to let them means-test our private capital that was originally intended to be an insurance program? This is purely unconstitutional and should be the next civil rights issue for young voters. We must demand that Republicans not sign onto the perpetuation and entrenchment of Social Security as a permanent form of involuntary servitude.
There is no doubt that Senator Coburn intuitively opposes tax increases and supports private accounts for Social Security. However, it seems that his motivation to immediately negotiate any deal that could possibly close the budget gap outweighs his conviction to be dogmatic for the sake of liberty. Most of all, he is willing to offer concessions that will enable the very people who started this mess to perpetuate it.
There is no way that the likes of Dick Durban will ever acquiesce to private retirement accounts or to tax reform that doesn’t raise any new taxes. Any final deal with them will invariably abrogate some conservative principles. Coburn is absolutely correct about the imminence of the budget crisis. But, that must be dealt with by defeating the Democrats at the ballot box in 2012, not by negotiating with them. The voters support our views, even regarding Social Security.
As we prepare for battle over budget and entitlement reform, we must remember who originally orchestrated our fiscal ruin. We must ‘pin the tail on the donkey’. Let’s punish the plunderers, not the new generation of taxpayers.
Red Meat Conservative (Cross-posted)