Kevin and the no good, very bad Republican agenda (part 1)
This is the second in a series of articles. In “Kevin McCarthy and Republicans and Debt Ceiling, Oh My!” it was clear that Kevin and the Republicans did not believe what they were telling the American people about budgetary restraint. If we look beneath their rhetoric, we will find what their real agenda is and who that agenda serves.
Taxes
Rather than let the debt-ceiling deal begin closing the gap between revenue and expenditures, McCarthy announced his intention to cut taxes. How is that fiscally responsible? Simply, it is not.
Historically Republicans seek to reduce taxes. George W. Bush cut taxes for the rich twice and added a tax rebate in 2008. Donald Trump ‘reformed’ the tax code making another windfall for the rich. Both presidents billed these cuts for the rich as the way to stimulate the economy that would pay for themselves. Together their cuts contributed $11Trillion to our $31T national debt. They did not pay for themselves.
Imagine receiving one of the above tax cuts for your widget manufacturing company that has already laid off half its employees because no one is buying your wares. Would you use that tax relief to re-hire workers to make more widgets that are already NOT selling? Of course not! Your furloughed employees will spend their tax relief on food, clothing, and housing, not widgets, further reducing demand for your products.
Since the lion’s share of tax cuts accrues to the top 5%, what do businesses, large corporations and the rich do with their tax rebates? One thing large corporations do with significant tax cuts is stock buybacks, something that was illegal until the Reagan administration. Buybacks cause the stock price to rise, thereby increasing their wealth and that of their rich shareholders.
Tax cuts for the rich and large corporations do not stimulate the economy. They ONLY make them richer and the poor more so, increasing the wealth gap in America.
Regulations
Cutting regulations has been a mantra of the Republican party for my entire adult life. Recently, Norfolk Southern lobbied the Trump administration to get reduced safety regulations. The wheel bearing failure that caused the derailment and subsequent disaster in East Palestine, Ohio is the product of those hamstrung regulations.
In fact, it is more profitable to ignore safety rules. Just as it is cheaper for a company to dump waste into the nearest river than to dispose of it properly, cheaper to spew air borne waste into the atmosphere, cheaper to use inexpensive nonfood fillers in our food. It is more profitable to build whatever you want, wherever you want than to go through an expensive approval process and follow building codes. It is more profitable to pay workers as little as possible, not offer health benefits, nor provide safe working conditions.
Cutting regulations increases profitability and mostly benefits the richest among us while endangering the lives of the rest of us.
Small Government
Grover Norquist of Americans for Tax Reform once famously said: “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”
What is so appealing about a smaller government? In the recent negotiations over the debt-ceiling Speaker Kevin McCarthy initially asked for a 22% across the board reduction in spending (not including the military). The bill specifically targeted an increase to the IRS budget from the Inflation Reduction Act passed by the Biden administration. Some of that IRS increase was meant to restore cuts by previous administrations. Most of it, however, was earmarked for collecting taxes from the rich.
Lopping 22% off federal funding would reduce the enforcement power of every regulatory agency, not just the IRS. If you cannot curtail or diminish regulations through legislation and lobbying, the second most effective means, achieving comparable results, is to make the rules impossible to implement by making government small enough to drown in a bathtub.
Slashing funding, in addition to crushing enforcement capabilities, reduces the effectiveness of our social safety net. This translates into less money available for unemployment insurance, SNAP benefits, Veterans benefits, Medicaid, child tax credits, school lunch programs, Pell grants, and other programs for the poorest among us.
In the end reducing the size of government becomes a downward spiral feeding on itself. Smaller government is less effective. Now Republicans can tout that our government is not working, therefore, more cuts should be made.
The difference between cutting regulations and reducing the size of government is that, by circumventing laws and regulations, one can be prosecuted for doing so… if only there were funds for that.
Smaller government benefits only the rich while forcing the poor further into poverty.
Kevin and the no good, very bad Republican agenda
Republicans, regardless of their rhetorical misrepresentation, enact tax cuts, eliminate regulations, and make government smaller to benefit the rich. They support the same actions at state and local levels, as well, to the same effect. The rest of us do not economically matter.
One more thing
The richest among us will support whatever form of government that best supports them whether it is a dictatorship or a democracy. If we are to continue our American experiment with Democracy, we must take our country back from the rich. We must force them into their proper place in a democracy: Serving the Common Good.
Electing Democrats is the only way forward for democracy. Show your ‘followers’ as you drive around your community where you stand. Put one of these on your car:
Kevin McCarthy and Republicans and the Debt Ceiling. Oh, My!
Kevin and the Republicans
House Speaker Kevin McCarthy continues to hold the full faith and credit of the United States hostage in exchange for federal budget cuts by the Biden Administration declaring that our deficits are too big, our national debt is going to burden our children and grandchildren, and adding the old saw that, if I/we ran my/our household budget(s) the way they run the government, I/we would go broke.
By their actions neither Kevin nor the Republican Party, now or ever, has believed any part of that position except that we individuals would go broke if we ran our households the way the government budget does. Republican administrations run budget deficits by spending money on the military, big business subsidies, and tax cuts for the rich, all of which run up the debt and cause inflation (Why do you think the stock market kept going up during Covid lockdown while the economy tanked? Stock price inflation). The national debt nearly tripled under Reagan and doubled again under George W. Bush. Since Reagan’s election, Republican administrations have accounted for 57% of our entire national debt that, already, encompassed debts from a civil war, two world wars, the conflict in Korea, and Vietnam War spending.
Kevin and Modern Monetary Theory
Republicans only complain, becoming self-righteously the party of fiscal responsibility, when Democrats run the government. By their actions, the Republican party practices and believes the tenets of a liberal/progressive economic theory: Modern Monetary Theory. MMT is a neo-Keynesian economic theory that has it roots in the economic theories of John Maynard Keynes, a British economist whose economic ideas were used during the Great Depression in the New Deal by the Franklin Delano Roosevelt administration. Simply stated: “MMT asserts that monetarily sovereign countries which spend, tax, and borrow in a fiat currency that they fully control, are not operationally constrained by revenues when it comes to federal government spending.” (Modern Monetary Theory: [MMT]: Definition, History, and Principles)
In other words, if you can print acceptable currency in your basement, you cannot go broke or go catastrophically into debt. This is exactly how the Republican Party treats federal spending when they control the government.
Kevin and the Debt Ceiling
Hence, the Speaker’s rhetoric on government spending is empty and meaningless. This is nothing more than a hostage situation. If we do not pay the ransom (make the cuts), they promise to kill the hostage (the full faith and credit of the United States).
When the government is no longer contractually able to pay its bills (in default), the federal government will shut down. Social Security, Medicare, Medicaid, tax returns, and student loan payments stop. Military personnel will not be paid. SNAP benefits will end. Pell Grant installments will not go out. The CDC, NIH, National Parks, National Museums, passport offices and most other government offices will close. Most government employees, not just nonessential ones, will be furloughed without pay (the government is the single largest employer in the country). Interest rates will spike. Steep inflation will hit fast. It will damage our credit standing around the world. It will weaken foreign faith in the value of the U.S. dollar. If they hold out for only a few days, it may throw our economy into a deep recession.
Kevin and H.R. 2617
If his goal really is not about ‘fiscal responsibility’, then, what does Kevin hope to achieve by kidnapping our credit standing? If we look at HR 2617, the debt ceiling bill just passed in the House of Representatives, it will give us a clue to the Republican agenda.
If we make this deal with the devil as it stands now, it will mean steep cuts in social programs (veteran programs by 22%), tougher work requirements for SNAP benefits and other government aid, a roll back on climate change initiatives, no student debt relief, cutting the newly raised IRS enforcement budget to catch rich tax cheats, limit rural America getting broadband, cut payments to farmers for disasters and supports for rural tenants, and more. It would roll back spending to 2022 levels and cap spending increases to 1% per year for the next decade. Two-thirds of the bill is dedicated to ramping up oil and gas production.
In other words, it is pull-yourself-up-by-your-own-bootstraps for the poor and welfare for the rich and big corporations with an enormous shout out to the oil and coal barons, two of the many patron saints of the Republican Party. Regardless of their claim to be the party of ‘working people’, consistently, they support only what is good for the richest among us. H.R. 2617 is perfectly in line with their true aims.
Kevin and Terrible, Horrible, No Good, Very Bad Day
President Biden should treat this situation like any other hostage situation… and not pay the ransom. Do not give an inch. Do not make budget cuts. Do not negotiate.
After all, Republican government shutdowns have worked so well in the past. Their shutdown under Clinton only helped his reelection. The one to stop the Affordable Care Act under Obama failed spectacularly. Plus, two more shutdowns to build Trump’s wall in 2018/19, not only failed to get the wall built, but ensured Trump’s election loss in 2020.
The longer the shutdown, the closer we will get to Election 2024, the steeper the electoral price will be, the clearer it will be in a vast majority of voters’ minds who should be in charge after the election: Democrats.
We are calling your bluff, Kevin! Shut the whole place down!