Friday March 15, 2013

If the definition of insanity is doing the same thing over and over again and expecting a different result then the folks in Congress need to check in for psychiatric evaluation.

House Republicans and Senate Democrats each rolled out budget proposals this week that both sides claim would solve the fiscal mess this country is in. And surprise, surprise, each proposal resembles the same austerity (to the extreme) versus tax and spend plans that each party has always advocated.

The House Republican plan proposes to cut spending by $4.6 trillion over the next decade, balancing the budget by 2023 with no tax increases, according to an Associated Press report. It would preserve Pentagon spending while making cuts in domestic programs including Medicaid and food stamps, and it would replace traditional Medicare for people now under 55 with a government subsidy to buy health insurance on the open market. The plan would repeal Obamacare but preserve more than $700 billion in the health care law’s cuts to Medicare providers over a decade. Finally, the House GOP plan calls for an overhaul of the tax code but does not increase revenue, except through economic growth. It incorporates more than $600 billion in tax increases enacted in January.

U.S. Rep. Peter Welch, Vt.-D, was sharply critical of the GOP plan. He said the idea of replacing Medicare with a government subsidy to buy health insurance represents nothing more than "gutting" Medicare and raising healthcare costs for the elderly. "It’s not system reform," he told the Reformer. "It’s cost-shifting."

Welch also decried "tax cuts for the well off" and reiterated his position that military spending must be reigned in. "The Pentagon budget has become bloated," he said. "That’s a fiscal problem and a national security problem."

By contrast, the AP reports, the Senate Democrats’ proposal would reduce government borrowing by $1.85 trillion over the next decade with roughly equal amounts of spending cuts and tax increases, but does not produce a balanced budget. Over the next decade, the proposal reduces domestic spending by $500 billion and defense spending by $240 billion. The cuts in domestic spending include $275 billion in cuts to medical providers but no benefit cuts for Medicare or Medicaid. The plan also calls for an overhaul of the tax code that generates $923 billion in additional revenues over the next decade by closing loopholes in the tax code that benefit wealthy Americans and big corporations.

Conservatives characterized the Senate Democrats’ plan as nothing more than the same liberal tax and spend policies they say has always been the party’s hallmark. Jennifer Rubin, a conservative columnist for the Washington Post, says the plan actually adds $4 trillion more to the national debt than the slashing alternative from House Republicans.

"The GOP wants to trim the rate of the increase in spending and reach a balanced budget, reducing our debt by about $5 trillion. The Democrats have a huge tax hike not to reduce the debt but to fund more spending," Rubin wrote.

Regardless of which ideology you subscribe to -- cutting spending or increasing revenues -- it’s still the same old game we’ve been seeing in Washington. Both sides continue to put forth the same basic proposals they always have, each declaring that theirs is better for America. And all the while each side knows going into this game that the opposing party will never accept the other’s proposal. Indeed, as soon as the House GOP budget was released on Tuesday it was declared "dead on arrival" in the Senate. Likewise, everyone knows the budget put forth by Senate Democrats on Wednesday will never pass the GOP-controlled House.

"The budget talks are beginning to resemble the moribund ‘peace process,’" according to Rubin. "Everyone insists the answer to unlocking a deal is ‘obvious’ and the parties are ‘very close’ to a deal. In fact, that isn’t the case at all."

Instead, Rubin suggests a "center-right solution" that is remarkably similar to the one offered by President Obama’s deficit committee in 2010: Enact entitlement reforms sooner rather than later by gradually increasing the retirement age and shifting more costs to wealthier retirees; reduce increases in domestic spending but without the rush to get to a balanced budget in 10 years; and enact tax reform that gets rid of loopholes, spurs growth and thereby adds revenue.

Yet, here we are three years later, with Congress still releasing the same old proposals and using the same old arguments.