The debt ceiling is the Republican party’s most immediate political obstacle. The vast majority of the party elite has concluded that holding the debt ceiling hostage could blow up in the GOP’s face — National Review being the latest and most important convert to this view — leaving them with the task of convincing enough House crazies either to go along, or merely to refrain from stringing John Boehner up from a lamppost if he decides to bring the debt ceiling to the House floor and let mostly Democrats vote for it.
Then you have the automatic budget sequestration problem. Here the party elites and the party base are mostly united. President Obama says the answer is a balanced combination of higher revenue and cuts to retirement programs, whereas pretty much the entire GOP insists that the most important principle is no new taxes ever, no way, fuggedabouit. (A handful of dissidents like Michael Gerson want to trade more revenue for more cuts, but they are going through bizarre mental gyrations to obscure this.)
The Wall Street Journal editorial page steps up to the plate to make the no-taxes case.
The Journal notes that the January 1 tax deal was pretty small, as it “will raise only $620 billion at most over 10 years, and probably less.” That is a pretty meager amount, isn’t it? After all, the sainted bipartisan Bowles-Simpson plan proposed to raise $2.6 trillion in new revenue. Obama’s own plan offered to raise $1.6 trillion. By that standard, the $620 billion seems pretty small, leaving plenty of room for more while still keeping tax levels fairly low, right?
Sensing the tension in the argument, the editorial proceeds to explain why it’s just totally hopeless to raise more revenue from the rich. Pay close attention to this self-refuting sentence:
Even if they taxed 100% of every dollar earned by every American who earned more than $500,000 in 2010, the feds would take in $1.29 trillion, or not much more than the entire 2012 deficit.
A few things. First of all, the Journal looks at raising taxes on income over half a million dollars, while Obama is proposing to raise taxes on income over a quarter million dollars, so the Journal deliberately skewed the comparison in order to make the resulting sum look unrealistically small. Look how little revenue there is from these rich people!
But even then, the answer they came up with destroys their own case. How little revenue is there? Well, the Journal editorial tries to make it sound tiny by calling it “not much more than the entire 2012 deficit,” but a more plain English way of putting that would be “more than enough to wipe out the entire 2012 budget deficit.” In other words, a lot. And of course, we don’t need or even want to wipe out the 2012 budget deficit. The 2012 budget deficit remains swollen owing to the massive economic crisis, and as the recovery proceeds, the deficit is projected to fall rapidly on its own, making the deficit reduction target much, much lower. Reducing the deficit by a quarter of that sum would be enough to bring the ten-year deficit well into control.