The White House misleadingly suggests that the Republicans’ plan to pay for a payroll tax cut would result in “forcing cuts to things like education and medical research.” The bill passed by House Republicans mentions no such cuts. And while the bill may or may not require cuts to discretionary spending, there’s no reason those cuts would have to come from popular programs like education or medical research.
The White House’s nearly six-minute “white board” video, released on Dec. 14, features Brian Deese, deputy director of the National Economic Council, explaining payroll taxes and the Obama administration’s push to reduce them again next year. In the video, Deese makes a pitch for Obama’s plan to pay for the reduction with a tax on millionaires.
A majority of Republicans also supports a payroll tax cut, but there’s a difference of opinion about how to pay for it. The Republican bill proposes to pay for the payroll tax cut in a number of ways, including by increasing Medicare premiums for senior citizens with incomes greater than $80,000 instead of the current rate of $85,000, increasing fees charged by Fannie Mae and Freddie Mac to some lenders, reducing unemployment benefits, and freezing federal pay for another year.
In the video, Deese criticizes the Republicans’ plan to pay for the tax cut:
Deese, Dec. 14: Others, while they put forward legislation to extend these tax benefits, they’ve proposed ways of paying for it that would actually set back the middle class families and the same economic objectives we’re trying to achieve, by forcing cuts to things like education, medical research and also using this to fight a bunch of old political battles and ideological battles, everything from environmental issues to relitigating health care.
Republicans certainly stuffed their bill with a slew of hotly contested wish-list items (such as requiring Obama to issue a permit for the controversial Keystone XL oil pipeline within 60 days). But there’s nothing in the Republican bill that makes any mention of cuts to education or medical research.
So how do Democrats arrive at the idea that it would force cuts to things like education and medical research? They point to a score of the Republican bill by the nonpartisan Congressional Budget Office, which said the bill calls for a reduction of the discretionary spending cap of about $26 billion over the next 10 years.
White House spokeswoman Amy Brundage emailed us this statement: “The Republican bill would break the bipartisan deal achieved in the Budget Control Act and add new discretionary budget cuts on top of the nearly $1 trillion in reductions negotiated under that deal — and that would inevitably mean cuts to investments in areas like education and clean energy.”
It would be equally true to say the bill will require cuts in programs like aid to Pakistan or space exploration or any other discretionary federal spending.
The crux of the disagreement is over the Republicans’ plan to lower the discretionary spending cap in an amount equal to the 10-year savings from freezing federal pay, a move, they said, to ensure that the savings would not be spent elsewhere. White House officials told us instituting a pay freeze, or cut, to the federal workforce was already one of the steps being considered to pay for aggressive savings targets in the debt ceiling agreement. Republicans countered that this was only conveniently raised after the Republicans unveiled their bill and its plan to freeze federal pay.
Let’s say that using the federal pay freeze to help pay for the payroll tax cut means one less arrow in the administration’s quiver when it comes to reducing the budget, and that it will require the White House to find another $26 billion worth of nondefense discretionary cuts elsewhere over the next 10 years. That’s a small fraction of the overall nondefense discretionary budget, and there are any number of places that could be cut besides education and medical research.
This is a classic example of a political tactic some call the Washington Monument Syndrome, where a politician facing budget cuts will select examples of visible, popular services and warn that those would be the first ones cut.
That was what the Washington Post once dubbed the tactic pursued by the late George B. Harzog, director of the National Parks Service in 1969, when he ordered the Washington Monument (and all other national parks) to be closed two days a week after the Nixon administration cut the Parks Service’s budget. Congress later restored the money after a public outcry.
In this case, it’s education and medical research.
– Robert Farley