Gulag Bound
By: “Senator Bob” Smith
Accuracy In Media

The battles were epic in nature. It seemed at times as if the Capitol building itself rocked on its very foundation. It was President Ronald Reagan vs. Speaker Tip O’Neill. It was tax and spending cuts versus the big spenders.

I was proud in the mid-1980s to be “in the trenches” with Reagan in those fights to control taxes and spending. I joined Congressman Bob Walker of Pennsylvania, Bill Dannemeyer of California, and other conservatives, as we fought the taxers and spenders. The liberals spent with reckless abandon. Their left-wing media cohorts never even whimpered an objection. Those of us who tried to cut spending were called right-wing extremists. TV commercials by our opponents and editorials from the left labeled us as heartless and irresponsible people, who wanted to cut social security, throw the sick and needy out on the street and deny an education to every poor kid in America. We the people lost the fight again.

President George H.W. Bush took up the torch in the late 80s with his “Read my lips, no new taxes” pledge, which he promptly broke and we lost again. There was a brief respite under President Clinton with the so-called “peace dividend.” But spending and debt continued to rise steadily under the leadership of Presidents George W. Bush and Barack Obama and big spenders in Congress of both political parties. The ways of Washington would not change. Spend, spend, spend was the law of the land. Leaders and parties did not matter and the debt continued to climb. Despite repeated warnings from the likes of Reagan, conservative commentators and responsible business leaders and economists, the storm clouds of economic Armageddon were ignored. The people lost again.

Then in 2010 something interesting and unique happened. A bunch of Tea Party candidates won House and Senate seats across the country. They refused to play the “Washington game” and were willing to put their re-elections on hold for the good of the country. Once seated, they challenged the establishment and insisted on real cuts in spending. They believed that a 14 trillion dollar (and climbing) debt was going to bankrupt our nation and challenged the big spending liberals and the leaders of the Republican Party to get serious in getting a handle on the deficit and the debt. They refused to allow the debt ceiling extension until they got “real cuts” in spending. They were called ignorant, amateurs and children. They were even reportedly called terrorists by the Vice-President of the United States. They were accused by the mainstream media of bringing the United States to the “brink of disaster” by holding up the debt extension.

It is interesting that in the shallow minds of the liberal media, liberals who stick to their positions are labeled principled leaders, but those in the Tea Party who “gave it their all” to change the mindset in Washington are “radical right-wingers.” President Obama constantly singled them out as irresponsible and unwilling to negotiate. The new members tried mightily. Their intentions were honorable and heroic, but they did not have the numbers to succeed. The Tea Party members made the debate interesting and lively, they kept the focus on the debt and deficit. They were not outclassed, but they were outgunned. In the end, the big spenders won again.

Down through the years of debt and spending increases, every single deal always cut next to nothing in the current fiscal year and cut a ton in the so called “out years.” Believe me, I know, because I was there to witness it all. The problem was that when we got to the “out years,” Congress changed the spending priorities again by pushing back the targets. If that “darn old can” had not just appeared in the road and those congressmen and senators had not lined up to kick it, we might have gotten a handle on the debt! Unfortunately, in the current fiscal crisis, once again Congress has “kicked the can down the road.” To suggest that we have “cut” spending with this deal is a joke.

Let’s take a closer look at those devilish details.

1. In the beginning of this debate President Obama wanted an increase in the debt ceiling and increased taxes on the “wealthiest taxpayers in America.” He did not even ask for spending cuts. After all the dust had settled, the President got an increase in the debt ceiling somewhere between 2.1 and 2.4 trillion dollars which carries him through the 2012 elections. He might even get his tax increases as well, depending on the results of the newly created committee’s conclusions and subsequent congressional votes. Contrary to what has been stated, tax increases are not off the table under the terms of the agreement.

2. Despite all of the rhetoric and hoopla, the only actual GUARANTEES of spending cuts in this bill are $7 billion this year and $10 billion over two years. To put this is in a very pathetic perspective, bear in mind that the U.S government is now spending $11 billion per day! But, wait a minute, doesn’t the agreement call for a reduction in spending of $920 billion in discretionary spending in the first tranche and another $1.5 trillion by either sequestration or the Joint Select Committee by the end of 2011?

The answer to that question is “yes, it does.” But in Washington the politicians have come up with something called “baseline budgeting.” You project an increase over current spending and then you reduce the amount of the increase and call it a cut. I fought my colleagues on this for 18 years to no avail. So, if Congress does make these reductions of $920 billion and $1.5 trillion respectively, it will mean a reduction off the baseline increase, but it is still an overall increase in government spending! Confused? That is exactly what the politicians and media want you to be. According to CBO (Congressional Budget Office) numbers, with this deal in place, the national debt will INCREASE to approximately $25 trillion by 2021. Since the current debt is nearly $15 trillion, does that sound like a decrease in spending to you?

3. As if all of the above was not bad enough, this “Debt Ceiling Compromise” creates a Joint Select Committee to do the work that Congress was elected to do. The leaders in Congress will appoint a 12 member committee, with 6 Democrats and 6 Republicans from House and Senate, to find the $1.5 billion in “cuts” (which are really the decreases in the increases under baseline budgeting). If the committee cannot agree, then 50 percent of the “cuts” will come from defense, while entitlements are left basically alone. In other words no entitlement reform again. After 50 years of presidents and Congresses not resolving the debt crisis, including the well touted, but utter failure of Gramm-Rudman, Congress stumbles up to the line and appoints a committee of its own members to deal with the crisis? Really? Politics wins and the people lose one more time.

4. None of this smoke and mirrors fooled Standard & Poor’s. For the first time in American history the bond rating of the U.S. government has been downgraded from AAA to AA+. In announcing their decision, Standard & Poor’s said that this agreement “falls short of what is needed to stabilize the nation’s long term finances.” Even worse, the United States is now rated with such nations as Taiwan and Slovenia, all because Congress was “sidetracked” by the debate over the debt ceiling and threat of default, instead of concentrating on true entitlement reform, spending cuts, tax cuts and other tax reforms and deregulation to create job growth.

5. There was a great amount of fanfare because part of the “deal” was to get a vote on a Balanced Budget Amendment to the U.S. Constitution. I have long supported this amendment and wish that it could pass. The truth is that, with the current makeup of the House and Senate, it cannot pass. The vote and debate will be good for morale, but unfortunately, this will have to come to fruition when the American people finally decide that to get it, more supporters will have to be elected.

6. In conclusion it is very easy to “Monday morning quarterback” but what should we have done, you ask? Here are several suggestions from one who spent 18 years on the Hill fighting the growth of this debt, while being marginalized by the liberal media and many opponents and colleagues as “out of the mainstream” for advocating fiscal responsibility.

There is nothing wrong with advocating increased revenues to help us move toward a balanced budget and eventually pay down the debt. However, this should NOT be done by increasing taxes on anyone who currently pays them. We currently have a 9.1 % unemployment rate in this country. We need to put people back to work. When they work, they pay taxes. When they pay taxes, it helps the federal government move closer to a balanced budget, as long as the government does not spend more than it receives. Simply put; reducing unemployment, increases revenues. This means more workers in the pool paying taxes, but not more taxes on those who are paying now.

Contrary to the mindless theories of President Obama and the liberals in Congress and the media, the government cannot impose, nor is it responsible for, market conditions. Government has, however, established and assumed responsibility for an artificial set of rules, called taxes and regulations, under which the game is played. The more burdensome and unstable the rules, the more counterproductive they are to job growth. Granting a brief tax holiday or passing a law that may sunset in a year or two, depending upon congressional whim, merely causes uncertainty in the investor or job creator. Under these conditions, why should anyone be surprised that there is a lack of investment for job creation currently in America. This is one of the reasons for the decision to downgrade our bond ratings by Standard and Poor’s. To compound matters, President Obama made things worse with so called “stimulus” money which was falsely sold as something that would create jobs by taking more money from the current wage earners and increasing our debt and the interest on it.

In reality we all know that decades of bad fiscal policies on the part of the United States, which have created a $14 trillion debt, cannot be instantly reversed to create a balanced budget and a surplus. However, we missed a golden opportunity to turn the corner with this latest deal.

The President wanted the debt ceiling increase. We should have extracted real cuts and real reforms to give it to him. On the growth side, just for starters, we should have offered and passed a plan to eliminate capital gains, permanently eliminate inheritance taxes, eliminate taxes on interest and dividends, reduce corporate taxes and regulations on companies willing to manufacture products and to create jobs here in America and encourage companies that are sheltering hundreds of billions offshore, to bring it back under a tax amnesty on the condition that it be invested into new technologies and other ways to create jobs. We should also have put a plan in place to reduce restrictions on oil and gas drilling and exploration in America to reduce dependence on foreign countries for our fuel. At the rate and direction in which we’re headed, we could easily become a third-rate economic power before we know it, jeopardizing our standard of living.

On the spending side we should have immediately insisted on the following: Lay out a plan to balance the budget in five years or less by freezing all discretionary spending. Period. No exceptions. Keep the freeze on until the budget is balanced and longer if we can. There is ample waste in the federal government with excess and unconstitutional programs to easily do this, if we have the political will. Then direct the Budget and Finance Committees of the Congress to reform entitlements once and for all. Make them report back with specific recommendations by the end of the year. Plenty of research has already been done on this. It is time to exercise the political will to do it. Remember we cannot get to a balanced budget by just cutting discretionary spending, with nearly 80 percent of the budget in entitlement spending. Then we should pass the Balanced Budget Amendment as part of the deal. It will ensure that future congresses will not put us in this mess again.

The Tea Party has, at a minimum, changed the debate. They have been attacked and harassed by the media and the leftist politicians. They must stand firm. They are our last hope. The media and the left have cast their lot with those who would bankrupt our nation rather than face the problem now. The Tea Party must increase its numbers, renegotiate this deal and do it right. If they fail, I shudder to think of what is in store for my children and grandchildren.

Former Senator Bob Smith (R-NH), known as “Senator Bob,” is a Special Contributor to Accuracy in Media. His columns and commentaries on media and politics are available on the AIM website at www.aim.org. He can be contacted at [email protected].