The abandonment of PAYGO, the defeat of the energy bill and the subsequent promise to strip new taxes, the omnibus spending bill rethink - all these are setting up a strong example of how the farm bill may turn out.
Little reform, big costs, and the deficit be damned.
Seriously, while the Bush administration and Republicans are adamant about tax increases of any sort, they have shown zero enthusiasm for spending cuts. I think the Laffer curve hope of increased government revenues from cutting taxes is their basis for a deficit solution.
Yet the absence of proof for supply-side theory has not dimmed Republicans’ devotion to it. Last month, President Bush told Fox News that his tax cuts had “yielded more tax revenues, which allows us to shrink the deficit.” Dick Cheney insists that “sensible tax cuts increase economic growth and add to the federal treasury.” Every major Republican Presidential candidate—including John McCain, who actually voted against Bush’s 2001 tax bill—is on the record as saying that tax cuts pay for themselves. And, just last week, a New York Sun editorial published a list of what “the Republican Party stands for.” First on the list? “Reductions in top marginal tax rates . . . lead to greater government revenues in the long run.” [More of a great article]Unfortunately, those tax cuts are now being viewed as less than the miracle fund-raisers they first seemed. At the same time, the cuts saved the bad news for down the road, when the tax cutters would be long gone fishing. Those deadlines are looming, such as the estate tax.
Oddly enough, it must be said that the bill for our fiscal impropriety has been artfully avoided for decades. Maybe we (and I'm talking Boomers here) can slide out the door before the check arrives.
So, why worry about the farm bill? Nobody (outside a few marginal players) cares about who's paying as long as we get ours.
So let me go out on a limb here and predict: the compromise with the White House will be (effectively) another waiver of PAYGO and larger deficit.