December 15, 2012
Rep. Capuano (D-MA) vs. the PublicBy Peter Wilson
Michael Capuano, former Mayor of Somerville, MA and Democrat Congressman for a "majority-minority" district that includes Cambridge and most of Boston, addressed the fiscal cliff in his e-update this week, in which he announces: "I believe in compromise." Compromise in fiscal negotiations usually refers to a so-called moderate, bipartisan approach that attacks the deficit problem from both sides by raising taxes and cutting spending. I don't see anything moderate about raising taxes to enable a spending binge, but Rep. Capuano doesn't even pretend to follow this faux moderate path of compromise; he opposes every spending cut on the table.
Capuano beginsby setting out his "basic beliefs":
I believe in paying your bills. If you want something, you should pay for it. This applies to birthday gifts, home improvement projects, and government programs... I believe the problems we face are serious and must be addressed reasonably soon. We should find a way to pay our bills and not burden our grandchildren because we could not make difficult decisions.
Amen, congressman. Our fiscal problems are indeed serious. Every year of his presidency Obama has spent over a trillion dollars more than the federal government collected in revenue, adding $4.8 trillion to the national debt for the four budget years from 2010 to 2013 (OMB figures). And Obama's $4.8 trillion is just the beginning; the White House assumes an unrealistic 17.5% jump in tax receipts for 2013 to record levels. The national debt currently stands at $16.3 trillion and the debt clock is ticking higher every second. If we survive the Mayan end of times, we face bankruptcy and financial ruin.Not to be alarmist, but seriously, folks, the end is nigh.
President Clinton's last budget for fiscal year 2001 was $1.9 trillion. Obama's 2013 budget request (rejected 414-0 in the House and 99-0 in the Senate) is $3.8 trillion. Exactly double. $1.9 trillion is around $2.5 trillion in current dollars, which means the federal budget has increased 52% in the last dozen years.
On the revenue side during this period, federal tax receipts kept pace with inflation, growing from $1.9 trillion in 2001 (when the OMB recorded a small surplus). After the Bush tax cuts in 2001 and 2003, receipts grew steadily to a peak of $2.5 trillion in both 2007 and 2008. So much for the liberal narrative that these tax cuts slashed revenue. Receipts then dropped during the recession to $2.1 trillion in both 2009 and 2010. A combination of economic growth and fiddling with the tax code might bring us back to 2008 revenue levels, but it's simply not realistic to imagine we can close a trillion-dollar plus gap without taking on the spending side of the equation.
As Speaker John Boehner rightly commented, "Washington has a spending problem, not a revenue problem."
Given this situation, what are the "difficult decisions" that Rep. Capuano proposes? He writes:
● "I don't see any reason to include Social Security in these discussions."
● "I believe we can address most of our Medicare and Medicaid concerns without cutting benefits to current or future beneficiaries."
● "The President's recent proposal includes $400 billion in cuts to these [health care] programs ...[but] I fear that the specific cuts outlined would cause serious damage to our national and state health care system and require significant job reductions in Massachusetts. I fear that such cuts would impose indirect, yet serious cuts to beneficiaries."
Health care cuts affect both Capuano's constituents on Medicaid in Mattapan, Roxbury, and Dorchester and the federally funded biotech researchers in Cambridge, so it's understandable that he's not on board with Obama's "cuts" -- even though it's unlikely that the president's vague promises to cut spending will ever be realized.
Capuano the great compromiser dismisses the Ryan Budget and the "proposal recently offered by Speaker Boehner" out of hand, accusing them of "essentially abolishing Medicare as we know it."
Capuano continues his bullet points with a list for his constituents on the other side of the tracks:
● He opposes a uniform nationwide cap of the mortgage deduction at $400,000, pointing out correctly that "a $400,000 home in Nebraska is a mansion; in Greater Boston, it is solidly middle-class." After all, those people in million dollar homes in Cambridge and Boston's Back Bay voted for him.
● Capuano opposes punitive tax treatment for owners of vacation homes, writing, "We must be mindful of proposals related to the tax treatment of vacation property and ensure that they do not have serious impacts on these important regional economies." Must not upset voters with second homes on Cape Cod or in the Berkshires.
● Finally, Rep. Capuano opposes the elimination of the charitable deduction. Capuano represents wealthy people who like to start private foundations and socialize on the boards of directors of charitable institutions.
I happen to agree with these last three positions. Ending the charitable deduction would be especially harmful, leading to expansion of government services replacing private charities. But in response to the fiscal cliff, Capuano asks no one to sacrifice. In his words: "my primary consideration will be what I believe is in the best interests of my constituents." In a way, he's right; a congressman's job is to bring home the federal pork. But without leadership that rises above parochial interests, who watches out for the long-term interests of the nation? Certainly not President Obama, who has made a career out of pandering to special interest groups.
Capuano's only suggestion that addresses our deficit problem is this vague statement: "I do believe that those of us who have been more fortunate should contribute a little more for the betterment of the greater society." This language is delicate, in deference to his wealthy constituents, in contrast to the aggressive class warfare attacks from Obama against fat cat bankers and "the rich."
We can debate the effects of raising taxes on the "more fortunate," but this is a straw man argument. According to the Congressional Budget Office, the president's plan to raise taxes on "the rich" will raise $82.3 billion annually, enough to run the federal government for less than nine days. It can't come close to fixing the problem.
Capuano mouths inspiring words about not burdening his grandchildren, but he's a bigger spender than the biggest spending president in history. Nothing in his letter offers any solutions to ourspending crisis. Sadly, he's typical of too many of the congresscritters running the country.
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