In a budget context, balance has a well understood meaning. A balanced budget is one in which total spending equals total revenues.
President Obama and his team have been working hard to redefine balance in the context of the current budget negotiations. In an attempt to gain rhetorical leverage and frame the negotiations, Team Obama is trying to impute two new apparently objective but absurd definitions to the word balance.
First, the President tells us we need a “balanced approach” to deficit reduction that involves “shared sacrifice” and which requires that there be “no sacred cows.” Yet the President also insists that taxes not be raised on anyone who is not rich. His balanced approach to deficit reduction includes deficit-increasing spending hikes for infrastructure, clean energy, scientific research, and education, as well as a deficit-increasing payroll tax cut. His language suggests that pain must be distributed widely, while his policy positions in the negotiations dictate the opposite.
Yes, he is reportedly considering deficit-reducing policy changes that he would rather not, including some as yet unknown changes to entitlement spending. But that by itself doesn’t override the exclusion from shared sacrifice of significant components of government spending and tax collections, nor the deficit-increasing policies he proposes in other areas.
I’m not actually debating his policy preferences here, just pointing out that they are inconsistent with any intellectually honest definition of “balance” that means “broad-based shared sacrifice.” If he included all government spending and all taxable income in the negotiations, that would be balanced by this definition. Instead, he and his team are using balanced to mean “meets the President’s policy preferences” while trying to fool you into thinking they mean something fair and equitable.
Second, Team Obama talks about the need for “balance between spending cuts and tax increases.” But numeric ratios of spending cuts to tax increases are absurd, for three reasons.
- As I explained yesterday, how you measure a spending cut depends on how you define the starting point for that measurement. If you begin by assuming no change in troop presence in Afghanistan and Iraq for the next 10 years, then you can claim credit for a roughly $1 trillion spending cut merely by implementing policies that have already been decided. This allows Team Obama to inflate their “spending cut” numbers in their ratio calculations, just as it allows them to make the entire deficit reduction package look bigger.
- Eliminating a tax deduction is a tax increase. In many cases it can be good tax policy, but it’s still a tax increase and needs to be included on that side of the ledger. Team Obama relabels this as “cutting spending