Why is passing healthcare reform so difficult? One big reason is that Democrats are trying to pay for a broad-based new entitlement without enacting a broad-based new tax.
As the joke goes, the only real difference between Republicans and Democrats is that the Rs don’t want to raise taxes on anybody and the Ds want to clip only the top 2 percent.
But some Democrats have finally found a cause worth taxing the middle class for: the war in Afghanistan. A group of powerful House committee chairmen are pushing a graduated income surtax. (A Senate effort would tax only the wealthy.)
The twin goals, backers say, are fiscal probity and transparency, especially now that it looks like President Barack Obama will be sending up to $34 billion worth of new troops to Afghanistan.
As Barney Frank, House Financial Services chairman, puts it: ‘It’s important for people to understand how these wars are adding to our deficits.’
Nonsense. The same lawmakers supporting the war surtax also support a healthcare reform plan that is structured to hide long-term costs. No accounting trick is spared. Taxes are front loaded. Some spending is back loaded, while other spending is shunted to a separate bill.
No, the goal of the surtax is to drain public support for a war many Democrats think should be downgraded. And no doubt if this legislative effort proves successful, it would be tempting to eventually make the temporary surtax permanent.
Indeed, the whole effort could be laying the groundwork for a broad value-added tax that many centrist and liberal economists think necessary to shrink America’s long-term budget gap.
But why not take this opportunity to help pay for the war through spending cuts?
It’s inside-the-Beltway wisdom that Congress won’t cut spending. But eventually spending will need trimming to deal with the long-term budget deficit without resorting to currency devaluation or inflation or huge tax increases.
So let’s start now. The war in Afghanistan currently costs some $43 billion a year. As the Heritage Foundation rightly notes, “that sum is dwarfed by the $72 billion in improper payments (i.e. over-payments, payments made for services and goods never received, benefits and tax credits paid to people who didn’t qualify) that the Government Accounting Office said the federal government made last year.” Then there’s $92 billion in corporate welfare and $123 billion in programs that simply aren’t really showing any positive impact, according to government auditors.
Time for Congress to prove the common wisdom wrong and do the unexpected: Cut spending.