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To hear Republicans tell it, federal policymakers have no choice but to reduce the deficit and move the budget closer to balance. It is the dubious idea at the heart of the GOP’s latest debt ceiling crisis: Republicans take fiscal concerns so seriously that they’re prepared to threaten Americans with deliberate harm in order to achieve their goals through extortion.
House Speaker Kevin McCarthy went so far this week as to argue that the national debt is “the greatest threat to our future.”
As a substantive matter, that’s plainly ridiculous, though it was against this backdrop that President Joe Biden seemed eager to engage on this point during his State of the Union address. At times, the Democrat effectively positioned himself as the official who actually has credibility on deficit reduction — and he invited Republicans to join him, rather than the other way around. From his remarks:
“In the last two years, my administration has cut the deficit by more than $1.7 trillion — the largest deficit reduction in American history. Under the previous administration, the American deficit went up four years in a row. Because [of] those record deficits, no president added more to the national debt in any four years than my predecessor. Nearly 25 percent of the entire national debt that took over 200 years to accumulate was added by just one administration alone: the last one.”
Republicans were not pleased with the observations, though they had the benefit of being accurate. Biden added soon after:
“Let’s sit down together and discuss out mutual plans together. Let’s do that. I can tell you the plan I’m going to show you is going to cut the deficit by another $2 trillion — and I won’t cut a single bit of Medicare or Social Security. ... We’ll pay for it the way we talked about, by making sure that the wealthy and big corporations pay their fair share.”
It’s easy to forget that tax hikes on the wealthy are among the most popular ideas in the United States. With this in mind, the Democrat told Congress last night, “We have to reward work, not just wealth. Pass my proposal for the billionaire minimum tax. ... No billionaire should be paying a lower tax rate than a schoolteacher or a firefighter.”
He added, "I propose we quadruple the tax on corporate stock buybacks and encourage long-term investments. They’ll still make considerable profit."
The point isn’t that Biden was proposing tax policies that are likely to pass anytime soon. Rather, the point was to frame the fiscal debate in a constructive way: Biden, unlike his Republican predecessor, has already seen the deficit shrink considerably since he took office, and he has a plan to go further, relying not on punishing working families, but on popular measures that would require the wealthy and big corporations to pay their fair share.
This stands in sharp contrast to the GOP’s deficit reduction plan, which (a) will be far more regressive and unpopular; and (b) still doesn’t exist, despite Republican leaders launching a debt-ceiling crisis over their ostensible concerns about the subject.
Biden, in other words, was effectively calling the GOP’s bluff: They want to talk about deficit reduction? Great. The White House thinks it has the better plan.