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The GOP’s ‘magic asterisk’: Tale of a fiscal con job


If you’re like me, your eyes glaze over when talk turns to the U.S. budget. So, when the GOP’s House and Senate budgets hit the newsstands last week, I just moved on. Then I got bonked on the head by Paul Krugman’s op-ed in Friday’s New York Times. “We’re looking at an enormous, destructive con job,” he warns, adding that the deceits in the two resolutions “break new ground.”

Now, Krugman didn’t win a Nobel Prize in economics by making things up. I believe his warning. I just didn’t understand it. So I decided to educate myself.

I started at the beginning, relearning that budget resolutions are just that—resolutions. They aren’t bills, so they cannot enact spending or tax law. Instead, a resolution is a blueprint that sets limits on how much each congressional committee can spend over the course of the year and how they plan to increase revenue. The limits are then enforced against individual appropriations, entitlement bills, and tax bills.

What’s wrong in the 2016 House and Senate resolutions is they lack any specifics. Instead, each contains two “trillion-dollar magic asterisks”—one on spending and one on revenue—that Republicans claim produce “mysterious savings and untold new revenue.” Moreover, says Krugman, the magic asterisks are actually understatements and, if implemented, “would leave the federal government several trillion dollars deeper in debt than claimed, and that’s just in the first decade.”

In other words, what both the House and Senate budgets do is severely cut benefits that affect the poor and working class and transfer income to the rich, who will get huge tax cuts. Crushing deficits, according to Republicans, just don’t matter if the wealthy take everything.

“You might be tempted to shrug this off, or you might say that this is what all politicians do. But it isn’t. The modern GOP’s raw fiscal dishonesty is something new in American politics.

“Does this mean that all those politicians declaiming about the evils of budget deficits and their determination to end the scourge of debt were never sincere? Yes, it does.”

Some of the spending reductions are specified. There would be—

  • Savage cuts in food stamps
  • Savage cuts in Medicaid—over and above reversing the recent expansion
  • An end to Obamacare’s health insurance subsidies—including an end to the taxes that pay for those subsidies, which amounts to $1 trillion of revenue
  • A trillion dollars in further cuts to mandatory spending, which would have to come out of Medicare or Social Security.

Meanwhile both budgets call for the repeal of the Affordable Care Act.

“The simplest way to understand these budgets,” says Krugman, “is to suppose they are intended to do what they actually would do: make the rich richer and ordinary families poorer.” Obviously, people wouldn’t support such policies if they understood what’s really going on. And that’s precisely why the budgets include the magic asterisks—to pull the wool over everybody’s eyes.

This “fiscal fraudulence” almost worked with me. I hope it won’t work with you.

LindaK View All

A lifelong communicator, I'm pretty sure I came out of the womb talking. But with no siblings to chat and play with, I learned to express myself in writing. My subsequent birth as a politics junkie came while I watched my father, a career Marine, sob uncontrollably over Kennedy's assassination. Intuitively, I knew the world would never be the same, and I should pay attention. So I did.

Now, some 50 years later, I find myself dumbfounded by the trajectory of American politics and the prevalence of ignorance, bigotry, hate, and violence. I started Two Cents of Sense, hoping to help change that trajectory and to promote progressives' conversation, knowledge sharing, and actions.


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