Tag Archives: tax equity and fiscal responsibility act of 1982

Brummett:”Political dysfunction” caused by Fox News?

Washington Could Learn a Lot from a Drug Addict

Fox News is the number one by far because it does not take the liberal bias that everyone is sick of. However, liberals just can’t stand that Fox News has risen to the top.

John Brummett in his article Who to blame? Here’s the answer, August 1,  2011, Arkansas News Bureau observed:

People will try to tell you that all politicians are equally to blame for this political dysfunction by which our nation has flirted with downgraded credit, debt default and global economic turmoil.

They merely will be providing insulation for those really mostly to blame.

So let us peel away such insulation. Let us lay it out in order of blame:

1. Tea party extremists in the Congress, who are penny wise and pound foolish

2. Mainstream Republicans in the Congress, because they could have fallen in behind Speaker John Boehner’s twice-aborted adult discussions with President Obama. Instead they cowered and tucked tail as soon as the kook caucus on the right fringe invoked the specter of primary opposition from the strident extreme.

3. All of us in the great American apolitical center, “independents” who go one way in one election and the other in the next.

4. Fox News, because it exacerbates the above.

Why no blame for Democrats? I ran out of space. The strident leftists, moveon.org and the talking heads on MSNBC, would surely be coming up shortly.

I think that Brummett is looking at the wrong issue. The problem is overspending by Congress and we should be addressing that. I do think we have “political dysfunction” but I believe it is because the liberals in Congress are addicted to spending like a drug addict is addicted to his drugs. I think that his point number 3 is very good, but point number 4 is dead wrong. Fox News is doing everything they can to expose the liberals’ addiction to overspending which is the root of our problem.

In the clip above Reagan promises to cut the size of government, but look what Congress did to him a few years later.

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President Reagan got his tax-rate cuts through Congress later that year (1981).  But because they were being phased in gradually, the economic pain they were designed to alleviate lingered well into 1982. High deficits persisted, and he faced enormous pressure to raise taxes.

The president had no interest in increasing taxes, but he agreed to consider some kind of compromise with Congress. His representatives began meeting with members of House Speaker Tip O’Neill’s team to find some way to hammer out a deficit-reduction pact. So began what, in our opinion, became the “Debacle of 1982.”

From the outset, the basic idea of the GOP participants was to trade some kind of concessions on the tax front for a Democratic agreement on spending cutbacks. The negotiators knew that Ronald Reagan would be hard to sell on any tax hikes. So they included a ploy they felt might overcome his resistance: a large reduction in federal spending in return for a modest rise in business (but not individual) taxes.

The ratio in the final deal — the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) — was $3 in spending cuts for every $1 in tax increases. It sounded persuasive at the time. Believing it to be the only way to get spending under control, most of the president’s colleagues signed on. He disliked the tax hikes, of course, but he agreed to it as well.

The cuts never came

You don’t have to be a Washington veteran to predict what happened next. The tax increases were promptly enacted — Congress had no problem accepting that part of the deal — but the promised budget cuts never materialized. After the tax bill passed, some legislators of both parties even claimed that there had been no real commitment to the 3-to-1 ratio.

In fact, spending for fiscal year 1983 was some $48 billion higher than the budget targets, and no progress was made in lowering the deficit. Even tax receipts for that year went down — a lingering effect of the recession, which the additional business taxes did nothing to redress.

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Washington Could Learn a Lot from a Drug Addict because they are both addicted. A drug addict is addicted to his drugs and Washington is addicted to spending.