Saturday, October 31, 2020

Deficit Reduction and Tax Breaks: Rhetoric and Priorities

Actions speak louder than words. A tree is known by its fruit. Where your treasure is, therein lies your heart. These three sayings each have at their root a value on integrity or authenticity that cuts through purported assertions designed to manipulate or otherwise mislead. Integrity here is consistency between word and deed. When members of Congress have cried that the sky was falling under the weight of the annual deficits and the accumulated debt of the U.S. Government, a person might ask by looking at the actual votes on legislation whether the representatives really considered the fiscal imbalances as so dire. If someone exclaims that her house is about to explode but does not act accordingly, such as in running out of the house rather than finishing dinner, it is reasonable to doubt that the person really believes that a blast is imminent. In protecting tax breaks even amid a deficit of over $1 trillion in 2011, members of Congress belied their own warnings concerning the American governmental debt crisis. The American people as a whole let their representatives get away with the Janus-like stances, and this in turn eventually allowed the U.S. Government debt to exceed $20 trillion. 
Generally speaking, a crisis truly acknowledged does not admit the luxury of granting the status quo a continuance. In other words, if the elected officials really did view the trajectory of deficits as unsustainable in 2011, then continuing the tax breaks would have been off the table. In prioritizing protecting constituent interests by tax breaks and by insisting that deficit-reduction is only to be accomplished by spending cuts, a member of Congress is actually saying that the deficit/debt problem is not really a crisis. 
So when the U.S. Senate Republican leader, Mitch McConnell said in 2011 that he was open to ending tax breaks for special interests yet without including those of his constituents, he undermined his insistence that the deficit must be significantly reduced.  He argued that the tax break that he had secured in 2008 for the owners of thoroughbred racehorses was essential for the protection of jobs in Kentucky. Of course, the financial interests of racehorse owners were not necessarily in line with—or reduce to—the protection of jobs. In political diction, the interests of capital hide behind those of labor even while going after those interests in private so as to maximize profit. That is to say, subterfuge may be the name of the game in the public square. The same can be said of Senator John Kerry, Democrat of Massachusetts, who claimed to want to eliminate tax breaks except for a proposal for a tax cut for small breweries, such as Samuel Adams in Boston. The deficits must not be such a big problem if the U.S. could afford additional tax cuts. At the time, mega-wealthy “operations like oil refineries, Hollywood productions and hedge funds have all profited” by tax breaks.[1] Tax breaks for industries in general added up to an estimated $123 billion a year—hardly chicken feed.
The “disconnect between the lawmakers’ words and deeds" reflected the hurdles that Congress and the White House faced as they looked to cut at least $1.2 trillion from the government's debt.[2] Talk of cutting tax breaks to raise money and reduce the debt had become a mantra in Washington, but it threatened sacred ground; "such breaks are a favorite tool among both Republicans and Democrats to reward supporters and economic interests in their home states.”[3] Given Fed chief Ben Bernanke's remarks on October 4, 2011 before the Joint Economic Committee of Congress that even reducing the debt by $1.2 trillion would not be enough, talk of protecting favorite tax breaks undercuts any claim that the public debt is a dire problem. To be sure, obviating another recession was also on Congressional minds. However, even as he was urging Congress to act in order to avoid a double-dip recession, Bernanke said of deficit-reduction efforts, "More will be needed to achieve fiscal sustainability."[4] That is to say, the U.S. Government could lose even its AA rating. Risking this by protecting local interests is short-sighted; it is like a biker accelerating down a hill while looking only a few feet ahead. We might save a few deck chairs for weary passengers, but what about that iceberg ahead? Is anybody even looking?
I contend that we, the electorate, ought to accord claims of crisis as valid only if sacred ground is given up. “Whether any of [the tax breaks] are scrubbed from the books may ultimately prove how serious Congress is about reducing the debt.”[5] It is the price of admission, as it were, to having a legislator’s claim of a serious problem being recognized as authentic rather than as possibly just hyperbolic, attention-getting rhetoric.
Without a verifiable indication of some actual give on a sacred cow, a legislator should be told, “prove it!” regarding his or her claim on the necessity to reduce the deficit. If no such sacrifice is proffered and made, then the politician ought to be ignored as if he or she were crying wolf. Otherwise, we enable two-faced Janus behavior that undermines public confidence in the government and misleads us into being too confident that the serious problems are being solved. The American electorates as well as the media companies are perhaps too accustomed to letting our elected legislators off the hook by taking their words at face value as if they were self-validating. In the case of the U.S. Government’s continuing deficits and accumulated debt, the United States can ill-afford other priorities (even in terms of presumed GNP and job increases) coexisting antithetically with the baleful platitudes of crisis if the imbalances truly are unsustainable and a danger to the American union and its republics. That is to say, given the magnitude of the problem, the members of Congress should be held closer to account in terms of deeds matching words. Priorities, the making of which is part of the job of a legislator, should match the rhetoric in front of the cameras.


1. Ron Nixon and Eric Lichtblau, “In Debt Talks, All Tax Breaks Are Not Alike,” New York Times, October 3, 2011. 
2. Ibid.
3. Ibid.
4. Jon Hilsenrath and Luca Di Leo, "Bernanke Issues Warning, Urges Action on Economy," Wall Street Journal, October 5, 2011. 
5. Nixon and Lichtblau.