What a Decent Budget Would Look Like
Imagining a Congress that was neither cruel nor irresponsible
OK, I was wrong. I thought House Republicans would pass their surpassingly cruel, utterly irresponsible budget in the dead of night, hoping nobody would notice. And they tried! Debate began at 1 A.M., and if you think that bizarre timing reflected real urgency, I have some $Melania coins you might want to buy.
But as it turned out, a combination of procedural delays by Democrats and the need to buy a few hardline votes by making the bill even more vicious meant that the sun had risen by the time the evil deed was done. Alas, daylight didn’t stop the process.
The House has now passed what must surely be the worst piece of legislation in modern U.S. history. Millions of Americans are about to see crucial government support snatched away. A significant number will die prematurely due to lack of adequate medical care or nutrition. Yet all this suffering won’t come close to offsetting the giant hole in the budget created by huge tax cuts for the rich. Long-term interest rates have already soared as America loses the last vestiges of its former reputation for fiscal responsibility.
In the days to come we’ll see detailed analyses of just how much damage this Budget of Abominations will do. I’ll read these analyses as they come in and do my best to summarize the horrors for readers who won’t want to plow through spreadsheets. There will also be attempts to understand why politicians supposedly elected to serve their constituents are doing such terrible things. I have some ideas of my own on that score and will do my best to synthesize what acute observers have to say.
To be honest, however, I don’t have the heart to do all that right away; I need a few days of mourning first. So what I thought I’d do today is talk about what might be happening now if the party controlling Congress and the White House consisted of decent people — not saints, but at least people who genuinely cared about the welfare of their constituents and the future of the nation.
One option, of course, would have been for Congress to do nothing. That, itself, would have been a big improvement on what actually went down.
But Congress could and should do more. You don’t have to be a deficit fetishist, a fiscal scold — which I definitely am not — to realize that even before the Budget of Abominations America was on an unsustainable fiscal path. So what will it take to get back to a tolerable fiscal position?
It’s a cliché to say that doing this will require making hard choices, that ordinary Americans will have to make sacrifices. And maybe that’s true. What strikes me about where we are now, however, is that we could vastly improve our fiscal position with a series of easy choices — actions that would mainly spare the middle class and only hurt people most Americans probably believe deserve to feel a bit of pain. So here are four things we could and should be doing.
First, get Americans — mainly wealthy Americans — to pay the taxes they owe. The net tax gap — taxes Americans are legally obliged to pay but don’t — is simply huge, on the order of $600 billion a year. We can never get all of that money back, but giving the IRS enough resources to crack down on wealthy tax cheats would be both fiscally and morally responsible, since letting people get away with cheating on their taxes rewards bad behavior and makes law-abiding taxpayers look and feel like chumps.
Republicans are, of course, doing the opposite: They’re starving the IRS of resources and trying to make tax evasion great again. Why, it’s almost as if cheats and grifters are their sort of people.
Second, crack down on Medicare Advantage overpayments. Currently, much of Medicare is run through insurance companies whose payments from the government are based on the health status of their clients — the sicker the people they cover, and hence the higher their likely medical bills, the more the insurance companies receive. Unfortunately, insurers game the system, finding ways to make their clients look less healthy than they really are, and thereby get overpaid.
We’re talking a lot of money here. A Center for American Progress estimate found that
Medicare is at risk of overpaying [Medicare Advantage] plans between $1.3 trillion and $2 trillion over the next decade
It’s astonishing that these overpayments never became a target of Elon Musk’s DOGE — or it would be astonishing if you believed anything Musk has said about DOGE’s real aims.
Third, go after corporate tax avoidance. Much of this involves multinational firms using strategies that are shady and dishonest but legal to make profits actually earned in the United States disappear and reappear in low-tax nations like Ireland.
In 2017 Gabriel Zucman estimated that such maneuvers were costing the U.S. Treasury around $70 billion annually. The number is probably bigger now. There are several strategies that could limit these losses; ideally, major economies would cooperate to crack down both on corporate misbehavior and the nations that enable it.
Finally, we should just get rid of Donald Trump’s 2017 tax cut. That tax cut wasn’t a response to any economic needs, and there’s not a shred of evidence that it did the economy any good. All it did was transfer a lot of money to corporations and the wealthy. Let’s end those giveaways.
Would doing all these things be enough to put America on a sustainable fiscal path? Honestly, I don’t know. But they would make a good start toward putting our fiscal house in order. And none of them would involve the “hard choices” fiscal scolds tell us we need to make.
So why don’t we start with the easy stuff and see how far it gets us? I know, the usual suspects will come up with all kinds of reasons we can’t do obvious things to save money and increase revenue without hurting ordinary Americans. But politicians who aren’t even willing to do these things have no business lecturing anyone about fiscal responsibility.
MUSICAL CODA
I never want to read one more op-ed or hear one more TV pundit telling Democrats they need to "be the party of the working class." Republicans just passed a tax bill that hammers the working class and gives the nation's wealth to the already wealthy. Not one Democrat voted for it. Republicans spent an entire election cycle claiming to be the party of the working class but look at what they do, not what they say.
I used to think "late-stage capitalism" was just a buzzword, but I've come around to it. The vultures are circling. The rats are devouring the sinking ship.