Blog Post by: Benjamin Landy, on July 24, 2012
It says a lot about today’s hyperpolarized political climate that a bipartisan movement to include new revenues in a long-term deficit reduction plan should be considered newsworthy, even radical. And yet, when Fix the Debt, a newly-formed coalition of America’s top CEOs, descended on Washington last week to pressure President Obama and Congress to embrace a balanced deficit reduction strategy along the lines suggested by the Bowles-Simpson Commission (which called for $2 trillion in new revenues), they made waves for breaking with their traditional Republican allies:
The reality now facing practical, pragmatic corporate executives is that their Washington lobbying apparatus has become one with a Republican caucus on Capitol Hill that is dominated by ideological zealots and uncompromising partisans. So if they have now concluded that the most important issue for American business, and the economy, is getting a reasonable bipartisan compromise on taxes and spending, their only choice is to bypass that apparatus.
It should not be surprising that America's corporate titans, having crunched the numbers, decided to reject the GOP position. There is nothing conservative, in the true sense of the word, about Paul Ryan's 2013 budget or Mitt Romney's tax plan, which would cost the government $4.6 trillion and $3.4 trillion respectively over the next decade. That's not including the $5.4 trillion cost of extending the Bush tax cuts, which would bring the total revenue loss for either proposal to nearly $10 trillion.
Both Ryan and Romney insist they will more than make up for these deficits by eliminating loopholes in the tax code (although neither can name a single deduction they would cut) and generating incredible "trickle down" economic growth through lower taxes on the rich—an assumption completely unsupported by historical evidence. Both propose draconian cuts to social programs, especially Medicare, to make up the remainder.
The business community, which supposedly knows a thing or two about finances, is right to be skeptical. Whether or not they have the interests of the middle class at heart (hint: probably not), they still need people to be able to afford their products.
As the November elections draw near, thinking people inside and outside the Beltway are recognizing the fundamental unseriousness of the GOP's proposals. Even some Republican senators are rumored to be in support of going over the looming fiscal cliff, as a backdoor way of raising much-needed revenues without explicitly breaking their no-tax-pledges to anti-tax crusader Grover Norquist.
Sadly, one can imagine Romney, in more hospitable political climes, also taking up some version of Bowles-Simpson (as Obama once did, before backing down in face of an intransigent opposition) in a bid for the independent vote. But Romney and the Republican establishment, in thrall to the radical elements within their party, long ago surrendered their ability to compromise with Democrats on deficit reduction. If they cannot return to the center and accept higher taxes (as President Reagan did eleven times), the electorate will move on without them.
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