Shutdown Crisis Stems from GOP Drive to Cut Taxes of the Rich
GOP strategy: cut taxes for the rich, run up the deficit, demand budget cuts. Repeat.
By William Rice
Most commentary on the likely imminent government shutdown focuses on intriguing current questions: Can a handful of Republican House members once again hold the whole country hostage? Can Kevin McCarthy keep his job? Will the Smithsonian close? But the cause of the coming fiasco is much older than today’s Capitol theatrics. And until we understand and confront that cause, we’re doomed to repeat these painful fiscal follies.
Fact is, Republican politicians hate government—or at least the part of government that creates opportunities and lowers costs for ordinary Americans. Aside from a few ideological cranks, they hate government for a very practical reason: the American people, but most importantly for the GOP, the rich people and corporations whose interests they mostly represent can be (at least in theory) taxed to pay for it. And the bulk of those influential constituents do not want to pay for it.
But Republican politicians are in a bind. Ordinary Americans of all political stripes appreciate the help government can give them to acquire health coverage, send a kid to college, buy a house, get a job. And they think it makes good sense for those with the most personal resources, and who’ve benefited the most from our collective resources, to help foot the bill like the rest of us do.
So, since they may pay an electoral price if they directly attack public services the great majority of Americans want, GOP politicos have taken to undermining those programs indirectly. Over 40 years ago, in the Reagan Era, they came up with a strategy: cut taxes on the rich and corporations, run up deficits, blame that debt on too much spending on working-family priorities, and demand deep budget cuts in response. Then do it again. Lather, rinse, repeat.
Tax cuts mostly benefiting the wealthy that were passed by GOP Congresses and signed into law by Republican presidents George W. Bush and Donald Trump are responsible for over half the national debt piled up in this century—a $10 trillion lake of red ink. And yet all you’ll hear from GOP politicians is how we have to cut spending on services Americans need and deserve in order to bring down deficits.
This summer the GOP-controlled House committee that writes tax law voted to give special breaks to big business, cuts that if made permanent—always the Republican goal—would boost the deficit by over $1 trillion. This came days after Republican extremists had nearly driven the U.S. government into default and the world into financial panic in the name of cutting spending to reduce the deficit. Lather, rinse, repeat.
Now they want to extend tax cuts from 2017’s Trump-GOP tax law—cuts that have already expired or will in a few years. That law, sold as a boon to the middle class, has turned out to be exactly what all federal income-tax cuts are: a big gift to the rich and the corporations they own. And it’s a gift paid for with trillions of dollars of lost revenue that could have been used to make life a little easier for all of us who aren’t rich.
Budget rules forced Republicans to place expiration dates on a lot of the cuts in their 2017 bill. But they are determined to resurrect them all, and it’s not hard to guess who would benefit most. Households in the top 1% by income—lucky ones with over $800,000 a year rolling in—would on average get a tax cut in 2026 alone of more than $25,000. Middle class families would on average get about $3 a day. And all that tax cutting would balloon the deficit by $3.5 trillion.
But the real problem is spending, remember? That’s why Republicans recently unveiled as part of the shutdown negotiations a temporary spending plan that if extended for a full year would, among other impacts: deny Head Start to over 100,000 little kids from poor families; end Meals on Wheels for 60,000 homebound seniors; force over two million women and their young children onto a waiting list for the WIC nutrition program; and cut 40,000 teachers and other employees from schools that serve millions of low-income students.
The only way to end the cycle is to attack its fundamental fallacy: the rich and corporations are not paying too much in taxes, they are paying too little. And it’s that revenue shortfall that’s principally responsible for our growing debt. But unless Democrats begin to make fairer taxes on the rich and corporations as central to their political program as cutting taxes for those same folks is to the Republican agenda, we’re destined to suffer through these kinds of budget crises again and again. Lather, rinse, repeat.