Congressional gridlock could be good
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Kai Ryssdal: Consumer confidence was up last month. That’s the economic statistic of this Tuesday. People are apparently less worried about keeping their jobs and more optimistic about the economy than they have been.
The one catch is that the survey period was only through Nov. 15th — that is, before the budget-cutting super committee revealed itself to be less than all that super.
But what if I told you that there’s a way to cut the deficit by as much as $7 trillion over the next 10 years? That’s way more than the $1.2 trillion the super committee was supposed to cut. And the best part? Congress wouldn’t have to do much at all. Anything, really.
From Washington, Marketplace’s David Gura reports.
David Gura: If Congress doesn’t do anything — something it’s gotten pretty good at — a handful of cuts and credits would expire. That includes the Bush-era tax cuts.
Jim Kessler co-founded the think tank Third Way.
Jim Kessler: When they expire — and they expire Dec. 31st, 2012 — they revert to the previous tax code. And bingo, we’re back in the Bill Clinton era.
Of higher taxes across the board. James Horney is with the Center on Budget and Policy Priorities. He says, if those tax cuts expire, the deficit goes down by more than $3 trillion. More people would pay the Alternative Minimum Tax.
James Horney: That would save about an additional $700 billion over the next 10 years.
Medicare would pay doctors less and corporations would lose tax breaks. That’s another couple trillion. And automatic spending cuts, worth $1.2 trillion, would take effect in 2013. Basically, Congress could slash the deficit by closing up shop and going home.
Horney: In fact, we’d be in pretty good shape at least for the next decade or so.
Jim Kessler says this is a quick fix to an accounting problem, but it’s not the smartest way to tackle the deficit because it would be indiscriminate.
Kessler: That isn’t really making public policy, when suddenly everything expires and you go back to a previous era where, you know, the Internet barely existed and the world was a very different place.
Kessler says he hopes these expiration dates will focus lawmakers’ minds. But if not, take solace: Our fiscal situation would be better than it is today.
In Washington, I’m David Gura for Marketplace.