The idea of Democrats’ talking about “fiscal sanity” is a bit hard to swallow, but for now we will take Barnett at his word. Let us examine his words:
When President Clinton left office, the non-partisan Congressional Budget Office projected a $5 trillion surplus over the next decade.
Thank you, Republican Congress.
However, with Republicans in control of the White House and both houses of Congress, the federal government ran up a $6 trillion deficit.
Uh, no. The debt was $6T. If you don’t know the difference, you don’t belong in Congress.
Now, Barnett is not running against George Bush. He is running for Congress. So let us look at the deficits while Congress was under Democrat control, and when it was under Republican control. Democrats were in control of the House from 1955 to 1995, so we’ll start with the 1956 deficit and go to the 1996 deficit. Republicans then had control of the House from 1995 to 2007, so they are responsible for FY1996 through FY2008. The Democrats have been in control since then. In the FY1956-1996 timeframe, the federal deficit averaged 2.17% of GDP. When the Republicans controlled the House, the deficit averaged 0.81% of GDP — less than half what is was when Democrats were writing the budget. Since the Democrats retook control of the House — FY2008-2010 — the budget deficit has averaged 7.91% of GDP. Only during the WWI and WWII eras were the deficits higher.
Two tax cuts, two unfunded wars and one unfunded healthcare benefit (Medicare Part D) destroyed fiscal responsibility in Washington. Now we are in the deepest recession in 75 years. Frank Wolf crafted the budgets that created those record-breaking deficits.
Mr. Barnett again shows his ignorance of the facts. (I will concede that he may be lying.) We were attacked in 2001, and by the end of 2001 we had soldiers in Afghanistan. In 2003, we were at war in Iraq. The budget deficits for FY2002 and FY2003 were 1.48% of GDP and 3.39% of GDP. We peaked at 3.48% in FY2004, and dropped all the way to 1.14% of GDP in FY2007 — the last year the Republicans were writing the budget. So how can Republican policies be responsible for the deficit, when the deficit was coming down until the Democrats took over?
This year the federal government will take in $2.2 trillion and spend $3.6 trillion. This temporary deficit spending is necessary but not sustainable. A Democratic Congress and White House worked together before to balance the federal budget. We can do it again.
When did that happen? The last balanced budget was in 2001, when Republicans controlled Congress.
I am absolutely committed to balancing the federal budget. It is immoral to pass debt of this magnitude to our children. How we fund government and what we expect from government must change. As a first step, stop squeezing middle class taxpayers.
Are we squeezing the middle class? In 2001, before the Bush tax cuts, the middle quintile was paying a total federal tax rate of 15.3%. In 2007, that dropped to 14.3%, according to the CBO. That’s a 6.5% decrease. Meanwhile, the total federal tax rate for the top quintile dropped 6.0%.
Start taxing the wealthy at the same rate as the middle class. Under the Alternative Minimum Tax, couples making more than $433,000 a year pay a lower marginal tax rate than couples making $150,000.
The marginal top rate under the AMT is 28%. That are starts at $175,000 for married couples filing jointly. Below that, the rate is 25%. Here again, Barnett is either wrong or lying.
The super-wealthy not only pay a lower percentage in income tax; they also pay a smaller percentage in capital gains tax. No wonder we have a federal deficit.
The long-term Capital Gains tax under the AMT is 25% at all income levels. Under the normal tax code, that rate tops out at 15%. Is Barnett lying again, or wrong again?
As a second step, we must cut discretionary spending. Because the Defense Department spends half of all discretionary spending, it has to be part of the solution. America spends about as much as the rest of the world combined on defense. As we complete our two wars, we must reshape our defenses within affordable budgets.
All defense spending, including both Afghanistan and Iraq, is less than our total deficit. If we were to completely eliminate the DoD and dismantle our military, we would still not have a balanced budget. As I mentioned before, the deficit has not seen these levels except during WWI and WWII. Then, the culprit was military spending, and everyone knew it would come down when the war was over. But discretionary spending is not the problem now. Entitlements are.
These two steps are easier said than done. They will generate armies of lobbyists in response. The same fear tactics and half-truths used in the healthcare debate will reappear. However, decisions of this magnitude are what Members of Congress sign up to do. Voters deserve to know exactly what their Congressman will support. We must regain fiscal sanity in Washington.
If you want to regain fiscal sanity, we must first confront fiscal reality. Bartlett fails to do that.