Why The Super Committee Failed : An Open Response to My Representative, Jeb Hensarling

Howdy, Jeb, hope you get this.   I’m going to address this to you, personally.  The main reference point for those following along at home is this article in the Wall Street Journal, penned by Jeb Hensarling, entitled ” Why The Super Committee Failed”.

First off, Jeb, a bit of background.  I’ve been watching you folks mangle the finances of the United States for a good long while now.    Now, to be sure, you weren’t in Congress when they first passed the tax cuts in 2001, but you were there and voted for the tax cuts in 2003.  If you don’t recall, you called that bill the “Jobs and Growth Tax Relief Reconciliation Act of 2003”.  Over the next 5 years, it would create zero net jobs.

Unfortunately for most Americans, just because *you* call a bill something, it doesn’t mean it does that.   I’ve noticed this disturbing trend for a while now, and wanted to call your attention to it.  You seem to think if you just call a law something, that is what it will do.   It did not in this case, and I was wondering if you even knew that.  In your article, you don’t mention how you tried the same thing before and it didn’t work.

For those that don’t remember, this was the collection of  tax cuts that both lowered rates (mainly on the wealthy) and *specifically* allowed banks and hedge funds to avoid paying taxes through “qualified dividends”.

 In addition, taxes on “qualified dividends” were reduced to the capital gains levels. “Qualified dividends” includes most income from foreign corporations, real estate investment trusts, and credit union and bank “dividends” that are nominally interest.

Yes, Jeb, you are one of the who voted *for* creating these exact same huge tax loopholes.

But enough about the past, surely you can remember what you did and don’t need me to remind you that we already tried it your way, and it failed miserably.

In your article, you use the sub-head, to avoid taking any responsibility for anything.

Democrats were unwilling to agree to anything less than $1 trillion in tax hikes, and unwilling to offer meaningful reforms for health-care entitlement spending.

Ok, maybe you don’t understand this, but your were on a “DEFICIT CUTTING COMMITTEE” and, indeed, bringing in more taxes CUTS DEFICITS.   I feel almost silly having to point this out to you, but, in fact, all throughout history governments have used taxes to pay for the debts those same governments create and endorse.  When you voted to cut taxes in 2003, it raised huge deficits.  You claimed then we would naturally “grow our way out” of it.   It didn’t work like that (it can’t…we’ll get to this in a minute).   That’s *why we have this committee*.  And now you seem to be attacking the very idea of using taxes to pay for government debts.

You also complain that “[Democrats were] unwilling to offer meaningful reforms for health-care spending”.   But you already knew this was going to happen.  Your House of Representatives passed the “Ryan Plan” with absolutely no support from anyone but Republicans.   Why did you think you could force it through this committee when it had absolutely no support outside of it?

We’ll get back to that later, let’s move on a little bit further into your piece.

All now know that the Joint Select Committee on Deficit Reduction has failed to reach an agreement. While there will still be $1.2 trillion of spending cuts as guaranteed under the Budget Control Act, we regrettably missed a historic opportunity to lift the burden of debt and help spur economic growth and job creation. Americans deserve an explanation.

I want an explanation on why you don’t understand that if you cut taxes at one point, you have to raise them back at another point, or cut services to pay for them.    And I’m not just an American here (although I am that), I’m also one of your constituents.   You are supposed to be representing me, and instead it appears you don’t understand how basic math works.

I want someone who understands math representing me.

President Obama summed up our debt crisis best when he told Republican members of the House in January 2010 that “The major driver of our long-term liabilities . . . is Medicare and Medicaid and our health-care spending.”

This is a curious technique.  You here have focused solely and completely on only one side of the balance sheet, “our long-term liabilities.”   As you may not be aware, we also have significant “long-term assets”, although again you don’t seem to be aware that these exists or how to tap into them.

 A few months later, however, Mr. Obama and his party’s leaders in Congress added trillions of dollars in new health-care spending to the government’s balance sheet.

And again, this is a lie of omission.  You correctly note that the Affordable Patient Care Act adds to the spending side of the government’s balance sheet.  You neglect to note, once again, that there exists *another side* to the balance sheet, called “revenue”, and the APACA brings in more of that than it spends.  This is why the Congressional Budget Office, CBO, indicated that it would actually cost more to repeal, as you already attempted to do.

CBO and JCT estimate that, on balance, the direct spending and revenue effects of enacting H.R. 2 would cause a net increase in federal budget deficits of $210 billion over the 2012-2021 period. By comparison, last March CBO and JCT estimated that enacting PPACA and the health-related provisions of the Reconciliation Act would reduce federal deficits by $124 billion over the 2010-2019 period.

Perhaps this is why I have such a hard time believing you, Jeb.  The CBO is calling you a liar, or at least very uninformed about the legislation you  are voting for.

Republicans offered to negotiate a plan on the other two health-care entitlements—Medicare and Medicaid—based upon the reforms included in the budget the House passed earlier this year.

The Medicare reforms would make no changes for those in or near retirement. Beginning in 2022, beneficiaries would be guaranteed a choice of Medicare-approved private health coverage options and guaranteed a premium-support payment to help pay for the plan they choose.

This is the “Ryan Plan”.  Look, Jeb, I can see why you don’t call it that, because Republicans have realized that when people know what it is, they do not like it. So, Jeb, the Republicans on the committee tried to force an end-run around Congress to end Medicaid, privatize Medicare, and cut taxes.   Unsurprisingly, this failed miserably…and it’s their fault.

Now on to something else you don’t seem to understand, how job creation works.

The Congressional Budget Office, the Medicare trustees, and the Government Accountability Office have each repeatedly said that our health-care entitlements are unsustainable. Committee Democrats offered modest adjustments to these programs, but they were far from sufficient to meet the challenge. And even their modest changes were made contingent upon a minimum of $1 trillion in higher taxes—a move sure to stifle job creation during the worst economy in recent memory.

Jeb, really…you passed a “Jobs Cuts Creates Jobs” bill back in 2003.   It didn’t create any net jobs.   And now you are claiming, again in the face of history, that raising taxes can’t ever work to stabilize an economy, and can’t be a harbinger of job growth as a result of that stabilization.

And again, need I remind you, Jeb…you were on a “deficit cutting committee”.  Raising taxes cuts deficits.   Or…does that last sentence not make sense to you?   I understand you have taken a pledge to a lobbyist group to never raise taxes in return for election support, but does that lobbyist money really change your perception of reality so completely?

Here’s why I ask that.   You claimed, at certain points in the debate, to be open to raising revenues…[from an older interview]

[Jeb] continued: “We put a half a trillion dollars of revenues on the table. Some of that fees. But 250 [billion] of it is what most people call static tax revenue. But that is in the context, Candy, of bringing down marginal rates — fundamental tax reform to make the tax code fairer, simpler, more competitive to create jobs.”

“But it’s something Democrats have rejected, as you know, it’s not enough, that it’s just a token amount,” Crowley noted.

“Well, first, Candy, I hope I’m never in Washington to where I consider $250 billion the American people’s money to be a token.” Hensarling explained. “Republicans, we want more revenues, we just want to raise it by growing the economy.”

But now I get to see what it was you called “new revenues”. [from this latest article]

Republicans were willing to agree to additional tax revenue, but only in the context of fundamental pro-growth tax reform that would broaden the base, lower rates, and maintain current levels of progressivity. This is the approach to tax reform used by recent bipartisan deficit reduction efforts such as the Bowles-Simpson fiscal commission and the Rivlin-Domenici plan.

Does everyone understand what Jeb is saying here?   Jeb, I’ve shown rather conclusively that the math doesn’t work like this, even in theory.   I’ve also shown, again using real world numbers, how this “tax cuts pay for themselves” thing simply DOES NOT WORK.   It didn’t work over the last decade, while you were on the inside.   That you are so close to this, and still cannot see it, makes me seriously question your perception of reality, or your honestly in conveying it to your constituents.  Or perhaps you are simply being paid too much not to see it.

Finally, Jeb, we see that a bit part of the problem was that you didn’t understand the problem.

Unfortunately, the committee’s challenge was made more difficult by President Obama. Since the committee was formed, he has demanded more stimulus spending [1] and issued a veto threat against any proposed committee solution to the spending problem [2] that was not coupled with a massive tax increase.

1] This is a reference to the President’s jobs bill.  Part of which already passed.  Stop complaining about things you support and called for in this same article only because someone else does them, Jeb, it makes you look petty.

2]  You were on a deficit cutting committee.  The deficit is the difference between revenue and spending.  That you focused only on spending and refused to entertain realistic notions of how government revenue is raised (hint: natural growth from “stimulative” low rates can’t work…see: math), makes it obvious why you failed so hard…you simply do not understand the totality of the actual problem.

Finally, your responsibility avoiding conclusion…

Ultimately, the committee did not succeed because we could not bridge the gap between two dramatically competing visions of the role government should play in a free society, the proper purpose and design of the social safety net, and the fundamentals of job creation and economic growth.

I think it’s that last one where you personally failed so hard, Jeb.  You don’t understand seem to understand how basic math works, and build your policy positions of those misconceptions.   You haven’t read your history, and instead just repeat the same tired talking points.    You don’t understand that we tried the exact same thing you are advocating now, and it led to economic collapse.

At the very least, you could take some modicum of responsibility for you own failure.  At the very least.

UPDATE: Finale….I didn’t realize I missed your second-to-last paragraph.   This is probably a better reason why the committee failed…you thought, all along,  you could simply undo the results of that failure by playing the fear card again.

A great opportunity has been missed, but America’s fate will not be sealed by the failure of a temporary congressional committee. Spending cuts will begin anyway in 2013, but in a manner many of us, including our secretary of defense, believe could fundamentally harm our national security. I am committed to ensuring that full deficit reduction is realized, but Congress must work to achieve these savings in a more sensible manner that does not make us less safe.

Jeb…this is completely untruthful.  The entire impetus for your committee was to avoid these cuts by making a deal.  Now you’ve refused to make a deal, and want to go back on the cuts that were supposed to encourage you to make a deal.   Now you call those same cuts a threat to national security…but they weren’t enough of a threat while you were  on the committee to raise taxes to pay for the tax cuts, and wars we’ve had going on the last decade?

This is just so….two-faced, Jeb.  It’s no wonder you have such low approval, one has to be a complete fool to take what you say at face value.   You always thought you could wiggle out of the “trigger” on the committee, which is why you took a hard line, refused to compromise, and failed so completely.   At least your whole plan is clear now.    As a voter, that’s important to me.    Hopefully my follow Texans, and residents of the 5th district, feel the same in 2012.

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