John Boehner vs. “Funny Accounting”

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It wasn’t exactly a red-hot newsmaking weekend, but my former colleague Jon Chait noticed the same thing I did from the Sunday political talk shows — namely House Republican leader John Boehner’s awkward attempt to reconcile his critiques of Barack Obama’s fiscal responsibility with his support for extending the Bush tax cuts, which are set to expire automatically soon and whose fate Congress will debate this fall. As Meet the Press host David Gregory pointed out, making this argument has become a lot trickier for Republicans like Boehner now that former Federal Reserve Chairman Alan Greenspan–one of the key original backers of passing Bush’s income tax reductions in 2001–has now said that America can’t afford to extend them. Here’s a representative passage from Boehner’s tussle with Gregory:

MR. GREGORY:  [Y]ou’re not, you’re not being responsive to a specific point, which is how can you be for cutting the deficit and also cutting taxes, as well, when they’re not paid for?

REP. BOEHNER:  Listen, you can’t raise taxes in the middle of a weak economy without risking the double-dip in this recession.  President Obama’s favorite Republican economist, Mark Zandi, came out several weeks ago and made it clear that raising taxes at this point in, in the economy is a very bad idea.

MR. GREGORY:  But do you agree that tax cuts cannot be paid for…

REP. BOEHNER:  You cannot balance the budget without a…

MR. GREGORY:  But tax cuts are not paid for, is that correct?

REP. BOEHNER:  I am not for raising taxes on the American people in a soft economy.

MR. GREGORY:  That’s not the question, Leader Boehner.  The question…

REP. BOEHNER:  And the people that the president wants to tax…

MR. GREGORY:  …is, are tax cuts paid for or not?

REP. BOEHNER:  Listen, what you’re trying to do is get into this Washington game and their funny accounting over there.  You cannot get the economy going again by raising taxes on those people who we expect to create jobs in America and to get the economy going again.  If we want to solve the budget problem, we’ve got to have a healthy economy and we have to get our arms around the runaway spending that’s going on in Washington, D.C.

Boehner is right that economic growth is a great way to fill in a deficit hole, and that even some mainstream economists think that raising any taxes at this moment could jeopardize the shaky recovery. But that’s not the same as saying that lower taxes always pay for themselves, which is what Boehner seems to believe. He’s not arguing that we wait, say, six months to repeal the Bush cuts, until after the economy finds some traction. Boehner wants them implemented permanently, even as America stares down a future of very disturbing deficits.

Boehner is of course entitled to that position. But it’s a bit odd for him to focus entirely on the state of the economy and  dismiss deficit-related objections analysis of the 2001 Bush tax cuts–which were explicitly sold as a means of returning the (now long gone) budget surplus to taxpayers–as “funny accounting.” It’s only funny if you dismiss the idea that lower taxes lead to lower revenue, in which case you’re endorsing supply-side economics; or if you believe lower taxes will “starve” the federal government and force major spending cuts. There’s not much historical evidence to support either position, but both seem to be gaining currency within the GOP today, even if Republicans like Boehner prefer not to spell it out.

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