Temporary fiscal solutions now won’t fix the economy later - East Valley Tribune: Opinion

Temporary fiscal solutions now won’t fix the economy later

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East Valley resident Tom Patterson (pattersontomc@cox.net) is a retired physician and former state senator.

Posted: Saturday, May 5, 2012 10:14 am | Updated: 12:06 pm, Mon May 7, 2012.

Here we go again. In 2010, desperate Americans returned control of the U.S. House back to Republicans hoping that they would do the heavy lifting necessary to avoid our looming fiscal meltdown.

The Rs got the message. They promised to be courageous and steadfast and for a while they were. But now, with another election looming, they are losing their nerve.

In a sane world, legislators of all stripes would be grasping for ways to cut spending. But Speaker John Boehner recently whimpered, “there is no fight” over proposals to beef up the federal student loan program. Sounding like a schoolboy pleading for mercy from a bully, he went on, “why do people insist that we have to have a political fight on something where there is no fight.”

Obama and the Democrats have been cleverly seeding the field with land mines for the Republicans, insisting on votes whenever economically sound principles conflict with political popularity. The media never calls them out for this transparently cynical ploy. Instead they serve as a Greek chorus, affirming that we now have the proof that heartless Republicans hate women, wage earners, students and just about everyone else.

It started in late 2011 with the push to extend the “temporary” payroll tax cuts. Since these constitute the funding source for Social Security and Medicare, both of which are in deep trouble financially, it didn’t make a whole lot of sense. But Obama insisted that reverting to the prescribed rates would be a “tax increase” and the media bought it.

Republicans tried to push back, pointing out that it wasn’t really a tax increase but a tax shift. After all, not one dime of spending reform had been passed, meaning that all program benefits would still be paid for eventually, just not by current wage earners. Workers of the future, who won’t vote in 2012, will pick up the tab instead.

Payroll tax cuts won’t provide much economic stimulus either. Partly because they’re temporary, they don’t produce nearly the same economic growth that personal or corporate income tax cuts would. Republicans tried to argue that one too. But in the end, they believed they were getting bowled over and in danger of losing ownership of the tax-cut issue, so they gave in. The geniuses who spent a couple of trillion dollars on failed economic stimulus schemes won again.

So now the pressure is on to provide more taxpayer subsidy for student loans. But why, other than for political reasons, should this be on the table? After all, the student loan program grew from $64 billion to $269 billion annually in the last decade. Total federal subsidies for higher education soared $100 billion over the same time frame. Not coincidentally, college costs have skyrocketed. Meanwhile, we’ve produced a glut of graduates in many non-technical fields. Up to one third of recent graduates are unable to find work or are working in jobs not requiring a college education.

But no matter. President Obama barnstorms college campuses, proclaiming “We can’t make higher education a luxury. It’s an economic imperative. Every American should be able to afford it.” Blah, blah, blah.

So did the Republicans make a principled challenge to the assumption that college education is yet another benefit Americans are entitled to from government? They did not. They only want to discuss how to “pay for it.”

Here again they got hammered. They proposed taking $6 billion from the Preventative Health Fund, thus inciting charges that they are still waging the “war on women.” Never mind that only a quarter of one percent of the fund is targeted to women and that Democrats have already raided it to finance their own priorities.

Republicans are panicked about losing the moocher vote. That’s understandable when half of all Americans pay no income tax and a newfound sense of entitlement is taking hold. But they’ve probably lost the takers vs. makers battle already.

They’re better off making the case for fiscal responsibility and growth-oriented reforms. If they keep giving in to demagoguery, we’re in big trouble. Some things are worth fighting for.

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