Democrats & Liberals Archives

Cutting Deficit vs. Cutting Government

During the 2010 campaign, Republicans hammered away at the need for cutting the deficit. Now that Republicans have taken over the House and increased their membership in the Senate, they are making a small-appearing change that they call CUT/GO. Though advertised as a means for cutting the deficit it in reality is a way to cut government.

What's the difference? Plenty.

First, what is CUT/GO? Talking Points Memo explains it this way:

Under CUT/GO, all new spending has to be paid for, but tax cuts do not. Additionally any new spending must be paid for with parallel spending cuts elsewhere in the budget -- not with tax hikes. So unemployment benefits couldn't be paid for by closing a corporate tax loophole. But a corporate tax loophole could be widened without requiring any offsets.

CUT/GO will never reduce the deficit. You could reduce spending a little here and a little there. Maybe earmarks. Perhaps "waste and fraud." But tax cuts can go on forever.

This is the big point: Though tax cuts do not cut the deficit, they definitely do reduce the size of government. Without revenue, the government can't implement the new healthcare law. It can't regulate the financial industry. It can't regulate climate change. It can't do anything to help the unemployed. Without revenue the government is powerless.

Democrats have an entirely different point of view. They truly favor reducing the deficit. This is why they have adopted PAY/GO, which means that if you recommend any type of expenditure, whether increasing spending or reducing taxes, you must find a way to reduce the cost. Democrats followed PAY/GO in healthcare legislation and in the many other laws they passed in the last session of Congress.

CUT/GO and PAY/GO demonstrate the difference between Republicans and Democrats. Republicans favor CUT/GO that cuts government and Democrats favor PAY/GO that cuts the deficit. With CUT/GO Republicans plan to reverse Obama's accomplishments, such as healthcare reform and financial reform, plus other programs helping the middle class and the poor. With PAY/GO Democrats plan to produce jobs and at the same time reduce the long-term deficit.

Are you in favor of cutting the government in order to boost the fortunes of the rich and powerful or do you favor cutting the deficit to support ordinary Americans?

Posted by Paul Siegel at December 29, 2010 6:07 PM
Comments
Comment #316044

Paul,
Although the Republicans would like to think they can cut government out of our lives, they have done more in the last 30 years to impose government in our lives. So when they say they are interested in solving the debt without raising taxes than I do believe the Democrats should remind them of the now famous words of President Bush “No New Taxes.” For unless the Republicans are willing to compromise on increasing the taxes on the top 1% of Americas’ wealthyest citizens than why should the middle class and poor watch their tax burden increase?

No, the House Leader might cry over the repeal of health care reform, wall street reform, and anything Obama; nevertheless, he will fail to change the minds of many Americans if the Republican Leadership only wants to cut our social safety net programs IMHO. So why cutting government may make a good sound bit, I wonder if the Conservatives are ready to see the safety net for corporations sliced into ribbons. Since they still can’t tell us one program that they would be able to live without.

Posted by: Henry Schlatman at December 29, 2010 10:31 PM
Comment #316073

Amen Henry Amen It’s all just smoke and mirrors and propaganda from the right no real solutions.

Posted by: Jeff at December 30, 2010 3:35 PM
Comment #316109

After the Democrats took Congress, Nancy Pelosi, in a 2006 press conference, claimed how ‘Cut and Go’ would be one of her main priorities. Funny how things turned out.

By the way, did anyone see the Dec. 20 “60 Minutes” piece on the impending state and municipal budget crisis? Get video link HERE.

Posted by: Kevin L. Lagola at December 30, 2010 11:42 PM
Comment #316116

Kevin L. Lagola,
Probably the best way to save the local and state governments is to once again have municipal bond drives which encourage citizens to invest into their communities. And why it goes against the National Interest of the Democratic and Republican Parties, back in the 50’s our parents and grandparents used the funds to build many of the communities we live in today.

However, don’t expect shows like 60 Minutes to run a piece it considering it goes against the Status Quo of The Corporation today.

Posted by: Henry Schlatman at December 31, 2010 2:38 AM
Comment #316117

All we need to do is reduce government spending back to pre Obama as a percentage of GDP and keep it there. 20% of GDP has proven over the post WWII period to be a reasonable size of expenses. If we won the cold war and did all the social spending in the 60’s etc, we can solve todays problems on that amount as well.

The only way to reduce the defict is to cut spending. If you raise taxes first, you just give Congress more room to spend. Cuts come first.

Posted by: Craig Holmes at December 31, 2010 7:18 AM
Comment #316119

Craig Holmes,
“The only way to reduce the defict is to cut spending. If you raise taxes first, you just give Congress more room to spend.”

Why that idea may of worked in the early 20th Century, today we must get Americas’ Private Sector to provide us with the products and services which will lower the operatong expenses of both government and households. For not only will this provide much needed jobs, but also keep wealth in America instead of shipping it overseas.

Besides, I don’t see Congress cutting their staff, limiting travel paid for by the taxpayers, or defering their pay anytime in the near future. And why do what I say and not what I do has never seat well with the Children of the 70’s, seeing some Re[ublicans want to do away with Pelosi’s inventive to Green the Capital, I doubt if Members of Congress will get much support from the Youth in raising the age of retirement, cutting medicare, and cutting their social net.

Instead, if the Republicans and Tea Party are serious about reducing the sebt than let them start by repealling the Bush Tax Cuts. Than let’s cut all the loopholes for business and individuals which allows them to earn a million in profit, but pay no taxes. Because why it is easy to say you want to cut the other person’s entitlements, doesn’t anything short of cutting your own entitlements first just make it a political battle?

BTW, reducing government spending back to pre Obama won’t help, but neither will reducing the rates back to pre Bush. For unless and until the Democratic and Republican Leadership address the underlying causes of increased prices. What is stopping the Charlatans and Vagabonds of Wall Street from keep raising prices? It sure hasn’t helped in keeping the price of gasoline down.

Posted by: Henry Schlatman at December 31, 2010 8:37 AM
Comment #316137

kevin

the link to the dec. 20th episode at the cbs website doesn’t seem to be working. do you have another one ?

Posted by: dbs at December 31, 2010 9:21 PM
Comment #316241


The first step towards cutting the deficit is pink slips for the legislative writing corporate lawyers. Take welfare, the wealthy don’t mind welfare to the poor because it is also welfare for the corporations and wealth has been able to buy tax protection, placing most of the burden for welfare on the backs of the middle class.

Food stamps = profits for corporations.

Energy vouchers = profits for corporations.

Housing vouchers = profits for landlords, a business some corporations are investing in.

Posted by: jlw at January 4, 2011 12:40 PM
Comment #316242


Kevin, Pelosi’s broken promise was a return to pay go, not cut go.

Paul, when did the Democrats return to pay go, the lame duck secession?

Posted by: jlw at January 4, 2011 12:55 PM
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