WASHINGTON, Sept. 20 – Conservative House Republicans plan to recommend on Wednesday more than $500 billion in savings over 10 years to compensate for the costs of Hurricane Katrina as lawmakers continue to struggle to develop a consensus on the fiscal approach to the disaster.
Kevin Drum reads the fine print:
Well, they’ve identified $100 billion so far. Only $400 billion to go! Aside from the fact that I’m delighted to see Republicans screaming at each other over this, the whole spectacle is kind of sad. Could we save $500 billion over ten years? Of course we could. That’s $50 billion a year, about 2% of the entire federal budget. On the other hand, it also shows how ridiculous this whole exercise is. $50 billion in cuts would reduce federal spending from 19.8% of GDP to 19.4% of GDP. Yippee.
Even if all of these conservative proposals pass, we would still be very far from a path that would put us on a path where Federal debt would start falling as a percent of GDP. Kevin has a few more suggestions to add to the list including “raise taxes”.
But let’s not kid ourselves – even if we raised taxes along the lines suggested by John Kerry last year, we would still have a growing debt to GDP ratio. Didn’t Howard Dean say something about repealing all of Bush’s tax cuts and reducing government spending?