What the right hand gives, the left hand takes. — Attributed to Martin Luther
Catch 22 — For every regulation that gives something, there is another that takes it back.
Laffer Curve — the idea that in some circumstances tax cuts increase revenue.
New Year’s Resolution — promising to do next year what you failed to do last year.
The Problem Solvers Caucus has published ten principles for fiscal responsibility. Most are vague; here they are:
- Support for building a sustainable, fiscally responsible budget to invest in Americans and be good stewards of taxpayer dollars.
- Support for paying down our debt when the nation’s economy is in good shape.
- Recognizing that the federal government’s balance sheet can afford targeted spending to mitigate the effects of economic downturns, disasters, and emergencies.
- Support sustained assistance to the economy while the COVID-19 pandemic persists and while the unemployment rate remains at record levels.
- Support for transparency measures to strengthen awareness of the nation’s finances, including its debt and deficit. The Fiscal State of the Nation Resolution aligns with this assertion.
- Support for accountability mechanisms to help Congress demonstrate greater accountability in navigating the decisions necessary to improve the country’s fiscal health. The TRUST Act would support this plank.
- Support for responsible, thorough plans to establish budgetary goals to lower the government’s debt in relation to the size of the economy, or GDP.
- Support including the Fiscal State of the Nation, the TRUST Act, and/or legislation to establish budgetary goals in a future COVID-19 relief package to address our budget crisis once the economy recovers.
- Support curbing brinksmanship related to the debt limit, which risks the full faith and credit of the government due to artificial limits, and tying such reform to meaningful debt targets.
- Support paying for legislation and the House rules in place (Pay-As-You-Go) to enforce this principle.
Many would disagree on what it means to “support building a sustainable, fiscally responsible budget to invest in Americans and be good stewards of taxpayer dollars;” it could mean anything. However, the second principle–“paying down our debt when the nation’s economy is in good shape”– is rock solid. Yet Congress failed to do that in 2016/2017, when instead of reducing the deficit, they did the opposite by cutting taxes, particularly for the rich and super rich.
Points five to ten encompass the idea that Congress can encourage itself to do, with resolutions and legislation, what it otherwise wouldn’t do. Point 9 is good, if only wishing made it so.
There are a number of oft cited principles which are not mentioned:
- The idea that tax cuts pay for themselves
- Trickle down
- Statutory balanced budget
All else is moot if these tacitly remain.