Subject: Ezra Klein
From: "Eric Schwerin" <[email-masked]>
To: "Hunter Biden" <[email-masked]>
Date: Wed, 11 May 2011 09:19:51 -0400

John Boehner's new line on the deficit negotiations is that raising taxes -- by which he appears to also mean closing tax expenditures -- "is off the table. But everything else is on the table." This is a bit like telling your doctor, who's worried that you've gained weight and are out-of-shape, that exercise is off the table, but everything else is on the table. Well, it's nice that you're prepared to diet, but you need to exercise, too. Otherwise, you're not going to get where you need to go.
And without revenue, we're not going to get where we need to go -- at least if you think where we need to go is towards a balanced budget. Over the past 10 years, the Bush tax cuts have increased the deficit by about $1.3 trillion. They're the single largest policy contributor to our recent deficits. Due to the growth of the economy and the creep of the alternative minimum tax, they'll cost the Treasury closer to $4 trillion over the next 10 years. They're the single largest policy contributor to our projected deficits.
Extending the Bush tax cuts over the next 10 years, which Boehner favors, will increase the deficit by twice as much as the $2 trillion in spending cuts he's calling for will reduce the deficit. Conversely, adding the revenue increases in the Simpson-Bowles plan to his spending cuts would bring the deficit reduction to more $3 trillion. But Boehner isn't using the debt-ceiling vote to reduce the debt. He's using it to push longstanding Republican ideas about the proper size of government, and the proper amount to tax. This has been clear for awhile, of course, Remember CutGo? But it's worth being straightforward about it. Boehner's plan doesn't get our finances back in shape. He wants us to spend less, but he also wants us to cut taxes by more. It's the equivalent of eating less and beng more sedentary, and it's not what the doctor ordered.

Eric D. Schwerin
Rosemont Seneca Partners, LLC
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