The 1997 Balanced Budget Act is one of the great propaganda coups in the history of American governance. It is remembered today fondly by right and left as the hallmark of a bygone era of bipartisan cooperation, when the two parties came together in the spirit of shared sacrifice in order to secure a balanced budget. Here's Matthew Yglesias noting how the law "managed to raise revenue." Here are conservatives like Keith Hennessey and Paul Ryan holding it up as a case of the government cutting taxes and balancing the budget. What really happened in 1997?
There's a really strange fight brewing between the Obama administration and Republicans over which baseline the supercommittee should use to measure its deficit proposals. The baseline is the comparison the Congressional Budget Office uses to figure out how much a policy change saves. Republicans say the baseline needs to be "current law." Why does that matter? Current law says that the Bush tax cuts expire. All the bipartisan commissions that came up with deficit plans that lose tax revenue compared with current law.
When two implacably opposed sides negotiate an agreement, often it's because they disagree on what the agreement means. The supercommittee plays this role in the debt ceiling deal. Tasked with finding $1.8 trillion in deficit reductions, or else triggering cuts to spending concentrated in defense, Democrats think they'll get a balanced solution and Republicans think they'll just roll the Democrats again.
President Obama has a credibility problem. He has compromised so often that Republicans simply don't believe that he'll sustain his opposition to anything, as this exchange attests: Rep.
Bruce Bartlett on the silliness of cut, cap and balance. And CAP's telling infographic on the proposal Keith Hennessey has a strong summary of all the horses in the budget race. Donald Marron rails against the debt limit. Bachmann and the Tea Partiers think default is a minor concern. Last but not least, Rapper Ja Rule gets convicted on tax evasion.
Former Bush administration economic adviser Keith Hennessey argues that it's unfair for President Obama to accuse the previous administration of presiding over "a decade of spiraling deficits": I want to focus on that last phrase: a decade of spiraling deficits. The best way to compare deficits over time is as a share of the economy. This first graph shows budget deficits during President Bush’s tenure. On this graph deficits are positive, so up is bad. The dotted green line shows the average deficit since 1970 for comparison (2.6% of GDP). This graph does not show “a decade of spiral
I missed this post by former Republican budget staffer Keith Hennessey when it came out a couple weeks ago, but it's good enough to highlight now. Hennessey addresses the conservative complaint that nearly half of all Americans have no income tax liability.
--Which kind of ideological conversion is most admirable? --John McCain laughs along with global warming denial --Alan Wolfe on Thomas Sowell --Keith Hennessey breaks down different ways to look at the budget
Former Bush economic advisor Keith Hennessey is back for more. His first defense of Bush fiscal responsibility was highly unpersuasive, and his follow-up, unbelievably, appears to be even worse. For instance, I pointed out that the prospect that the 2001 CBO budget projections of endless, growing surpluses would prove inflated were not some "hindsight analysis" but a probability Democrats constantly emphasized and Republicans repeatedly dismissed. I cited a TNR editorial and Paul Krugman's book, in addition to Bill Clinton's 2000 convention speech. Here's Hennessey's response: Mr.
Former George W. Bush economic advisor Keith Hennessey is tired of the Obama administration dragging its predecessor's name through the mud. So rather than simply imply or assert that President Obama's fiscal record is worse than George W. Bush's, like most conservatives do, Hennessey actually tries to make the argument that Obama's policies are more profligate than Bush's. I remember Bush's fiscal policies, and the political environment that surrounded them, pretty well.