Among those calling for a mix of cuts and revenue are onetime standard-bearers of Republican economic philosophy like Martin Feldstein, an adviser to President Ronald Reagan, and Henry M. Paulson Jr., Treasury secretary to President George W. Bush, underscoring the deepening divide between party establishment figures and the Tea Party-inspired Republicans in Congress and running for the White House.
“I think the U.S. has every chance of having a good year next year, but the politicians are doing their damnedest to prevent it from happening — the Republicans are — and the Democrats to my eternal bafflement have not stood their ground,” Ian C. Shepherdson, chief United States economist for High Frequency Economics, a research firm, said in an interview.
As for the longer term, Ethan Harris, co-head of global economics research at Bank of America, wrote this week that “Given the scale of the debt problem, a credible plan requires both revenue enhancement measures and entitlement reform. Washington’s recent debt deal did not include either.”
Incumbent GOP leadership is steadfastly resisting this pressure from those who actually understand the economics of governing. The article continues:
. . . Representative Eric Cantor, the House majority leader, was defensive about Republicans’ antitax absolutism in a memo to his colleagues on Monday.
“Over the next several months, there will be tremendous pressure on Congress to prove that S.& P.’s analysis of the inability of the political parties to bridge our differences is wrong. In short, there will be pressure to compromise on tax increases,” Mr. Cantor wrote.
But, he added, “We were not elected to raise taxes or take more money out of the pockets of hardworking families and business people.”
The Republican presidential hopefuls are no different. All eight of them “raised their hands when asked who would reject a long-term debt reduction package that had $10 in spending cuts for every $1 in revenue increases.” What possibly can be wrong with these people?