Congress needs to stop playing with economy

W ill the deficit-cutting supercommittee raise taxes? That’s the question of the hour in Congress. President Barack Obama and the Democrats in Congress deftly have maneuvered Republicans into a corner.

This shows — for starters — why Republicans were foolish to agree to setting up the supercommittee. It’s officially named the U.S. Congress Joint Select Committee on Deficit Reduction and is made up of 12 members, three Republicans and three Democrats from the House and Senate.

Yet the Constitution is clear: “All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other bills.” Nothing in that statement about a supercommittee, anymore than there is about the Super Bowl.

The supercommittee was set up during last summer’s debt-ceiling crisis. By Nov. 23, a week from now, it’s supposed to come up with $1.5 trillion in new budget cuts over the next 10 years to reduce the federal debt, currently about $15 trillion and rising. If the supercommittee fails, then a “trigger mechanism” is supposed to kick in, automatically cutting $1.2 trillion, half from defense, half from domestic spending.

“Republicans are trying to demonstrate to the public that they’re willing to play ball to some degree” with Democrats, Tad DeHaven told us; he’s a budget analyst at the libertarian Cato Institute. “They’re playing into the public’s perception of them heading into the 2012 elections,” when the GOP hopes to gain a larger majority in the House and win back both the Senate and the White House.

Republicans want to keep President George W. Bush’s tax cuts, which dropped the top income tax rate to 35 percent from 38 percent. The tax cuts were set to expire a year ago, but were extended until January 2013. Democrats want the tax cuts to be repealed for the wealthy. Sen. Pat Toomey, R-Pa., also has proposed cutting the top rate further, to 28 percent, in return for repealing some deductions, an idea Democrats reject outright.

“It’s all posturing, part of the circus,” DeHaven observed. “They just want to kick the can down the road.”

Republicans also are juggling some other balls in the circus. One is the tea party, whose enthusiasm for balancing the budget without tax increases swept the House GOP into power just a year ago. Tax increases or a phony budget deal would send them back figuratively to dumping tea into Boston Harbor.

Then there are those Republicans who would prefer tax increases to any cuts in the Pentagon budget. DeHaven said these lawmakers include Sen. John McCain, R-Ariz., the 2008 GOP presidential nominee, and Rep. Howard McKeon, R-Calif., chairman of the Committee on Armed Services. Yet it’s hard to justify keeping U.S. troops in Europe, to cite one example, two decades after the Soviet Union dissolved and its army went home.

We believe that, after four years of economic calamity, Congress should stop playing games with the country’s economic future. For starters, they should start with the proposal by Sen. Rand Paul, R-Ky., to cut $500 billion from the budget — immediately. Next, the Bush tax cuts should be made permanent. Tax increases now would dump us back into another recession.

Failure to act quickly in both areas could lead to another downgrading of U.S. debt and bring us closer to a Greek-style meltdown.