After weeks of intense and bitter negotiation, the so-called “Supercommittee,” the special Congressional Committee charged by President Obama to find a bipartisan plan for reducing the budget deficit, has failed to reach a compromise. Last week Democratic members of the committee were hopeful that one Republican would agree to support a tentative bipartisan package that includes agreements on tax rates, spending cuts, and changes to entitlement programs such as Social Security and Medicare.
Democrats blame Republicans for refusing to compromise on either tax rates or tax increases, while Republicans blames Democrats for not proposing serious cuts that bring federal spending into line with their ideological vision of smaller government. Democrats claim that Speaker of the House Jim Boehner (R-OH) killed the hard efforts of the panel on Thursday by offering legislation to increase new revenue by $3 billion in new revenue, which would be devastating to entitlement programs millions of Americans rely on.
Both parties are stuck on the question of tax reform because Democrats rightly believe that the wealthy have benefited too much from the climate of deregulation and corporate malfeasance, and as a result should pay their fair share in a system they exploit and profit from. Republicans are sticking to their long-time (and patently false) position that taxes frustrate economic growth and spur entitlement spending. In short, Democrats believe in the Grand Compromise between democracy and capitalism first initiated by President Franklin Roosevelt’s New Deal, while Republicans believe in every man (literally) for himself.
The failure of the committee to reach a compromise agreement is troubling for the anemic economy, and signals that the bipartisan rhetoric of both Democrats and Republicans cannot be trusted. Yet the elephant in the room is that Republicans care little about a healthy, functioning government and want to substitute private decision-making for democratic procedure. Economists of all political persuasions are in agreement on this point: there can be no serious deficit-cutting proposal that does not both cut entitlement spending and raises taxes. The gap is too large and growing larger daily, so President Obama must find a way to tap into the political energy unleashed by the Occupy Wall Street movement, and demand that Republicans give up their fantasy of a tax-free world. It’s high time everyone paid their fair share, including Republicans and their rich and powerful benefactors.